Archive | Rio Tinto

Rio Tinto considers float of Canadian iron ore business-sources – by Clara Denina (Reuter U.S. – August 9, 2018)

https://www.reuters.com/

LONDON (Reuters) – Rio Tinto, the world’s second largest listed mining company, is exploring a public listing of its Iron Ore Company of Canada business, banking and industry sources said, as it focuses on boosting revenue from its flagship Australian assets.

Iron ore, which accounts for most of Rio’s profit and is used in making steel, has provided healthy margins for years but the outlook is uncertain as major buyer China is expected increasingly to rely on recycling rather than importing raw material.

Following a commodity price crash in 2015, Rio put a string of assets on the block, mostly in coal, to decrease its debt load. In iron ore, its push to refocus has meant concentrating on Australia’s Pilbara region, where it has lower costs and higher grades. Continue Reading →

Miners Set to Spend $11 Billion in Search of the Next Jackpot – by David Stringer (Bloomberg News – August 7, 2018)

https://www.bloomberg.com/

Miners and investors are poring over satellite images, tracking drilling rigs and quizzing company executives for clues on whether the sector’s heavyweights are close to a new jackpot discovery.

As Rio Tinto Group searches Australia’s Great Sandy Desert for copper and Anglo American Plc scours a 19,000-square kilometer package of land in Brazil, they’re among the mining giants stoking excitement over potential reserves that’ll replenish project pipelines and overturn the industry’s lack of recent success in unearthing deposits.

It’s part of a broader global push across the industry that’s driving a revival in exploration spending on key metals, forecast to top $11 billion after hitting a low of about $9 billion in 2016, according to Melbourne-based MinEx Consulting Ltd. Continue Reading →

Why Shareholders Aren’t Loving Rio Tinto’s Cash Machine – by David Fickling (Bloomberg News – August 1, 2018)

https://www.bloomberg.com/

The big mining companies are thriving again, but they’re right to be cautious.

Poor little rich kids. After a brush with death when commodity prices slumped barely three years ago, the world’s miners are back in rude health. Net debt at the big five is now headed to its lowest levels since the peak of the previous mining boom in 2011, based on reported results and analyst estimates.

Free cash flow hasn’t quite scraped those heady heights yet, but it’s looking barely less robust than it was back then — and much more sustainable, too. While the measure dropped by 38 percent in Rio Tinto Group’s first-half results Wednesday, the change was attributable almost entirely to the timing of a $1.2 billion tax payment on the previous year’s earnings:

One obvious reason for the strength of cash flows is that, contrary to predictions including our own, the companies have so far resisted the temptation to fall off the capital-discipline wagon and splurge on building new mines and infrastructure. Continue Reading →

Rio’s $7 Billion Windfall Points to Mining’s Lesson Learned – by Thomas Biesheuvel, David Stringer and Martin Ritchie (Bloomberg News – August 1, 2018)

https://www.bloomberg.com/

Rio Tinto Group’s $7 billion pledge to shareholders is the latest sign the world’s biggest miners are resisting the temptation to backslide.

The mining industry has undergone a dramatic makeover since the end of the last commodity boom. Investors and management remain wary of pricey deals after much of the sector got burned by overpaying for assets and few among the largest producers see the need for major new supply growth.

Rio is generating massive amounts of cash even as cost pressures rise, and its low debt levels mean the No. 2 miner has financial capacity to move on acquisitions or projects. For now, it’s holding fire. Continue Reading →

COLUMN-BHP, Rio deals show lack of options beyond shareholder returns – by Clyde Russell (Reuters U.S. – July 31, 2018)

https://www.reuters.com/

LAUNCESTON, Australia, July 31 (Reuters) – Two recent deals by the world’s two biggest mining companies both looked positive for shareholders, but also underscore the challenges facing major commodity producers.

BHP Billiton last week agreed to sell its U.S. shale oil and gas assets for $10.5 billion, while Rio Tinto appears on track to exit its troubled investment in the giant Grasberg copper and gold mine in Indonesia for about $3.5 billion.

Both deals were generally well-received by investors, largely because they resolve long-running sores for the mining giants and will likely result in a return of the proceeds to shareholders. Continue Reading →

Rio Tinto posts jump in iron ore output, flags stronger 2018 (Reuters U.S. – July 16, 2018)

https://www.reuters.com/

MELBOURNE (Reuters) – Global miner Rio Tinto said on Tuesday that its second-quarter iron ore shipments from Australia rose 14 percent and indicated its annual production would be at the upper end of its guidance.

The miner said it expected iron ore shipments for the year to be at the upper end of its range of 330 million to 340 million tonnes, driven by productivity improvements and fewer weather-related disruptions compared with the same quarter last year.

It had said earlier it did not expect tensions over a global trade war to materially affect steel demand. Each of the four big iron ore miners are expected to log record production in the second quarter, given a ramp up in China’s steel demand in the quarter, Shipbroker Clarksons Platou Securities said. Continue Reading →

Indonesia mine nationalization shakes top copper producer – by Jun Suzuki (Nikkei Asian Review – July 18, 2018)

https://asia.nikkei.com/

JAKARTA — Indonesia’s nationalization of a major copper and gold mine formerly run by U.S. metals company Freeport-McMoRan is a win for Indonesian President Joko Widodo who has been calling for the reclamation of strategic resources. But the lack of agreement over future investments puts one of the world’s biggest sources of the red metal on shaky grounds.

According to the basic agreement reached on Thursday, Freeport and Anglo-Australian peer Rio Tinto will sell their shares in the local joint venture that runs the Grasberg mine to state-owned resources company Indonesia Asahan Aluminum, or Inalum.

Inalum will pay a combined $3.85 billion to the two companies to acquire all of Rio Tinto’s interest and lift its overall stake to 51%. Freeport will hold onto the remaining 49% stake in the operator of the mine in eastern Indonesia’s Papua province. A final deal is expected this year. Continue Reading →

Guinea’s mining minister says there will be Simandou deal, talks go on (Reuters U.K. – July 17, 2018)

https://uk.reuters.com/

LONDON, July 16 (Reuters) – Guinea is in constant talks with Rio Tinto and Chinalco to finalise a deal on the Simandou iron ore project, its mining minister said on Tuesday, adding he was confident an agreement would be reached.

Rio Tinto said in October 2016 said it had signed an outline agreement to sell its major stake in Simandou to Chinalco, a move many hoped would revive the long-stalled scheme.

Mines Minister Abdoulaye Magassouba said he was confident a deal would be achieved. He gave no indication of how much more time was needed, but said that as soon as the parties had agreed, the project would be relaunched. Continue Reading →

Rio Tinto, BHP, Vale tipped to report strongest ever quarterly iron ore exports – by Peter Ker (Australian Financial Review – July 15, 2018)

https://www.afr.com/

The world’s three biggest iron ore miners are expected to confirm the industry’s strongest ever quarterly export figures this week, helping to explain recent weakness in prices for the bulk commodity.

Big miners have exercised restraint in both supply and rhetoric in recent years in a bid to calm fears the iron ore market could be flooded with supply, but port statistics suggest the miners’ inexorable export growth reached new heights in the three months to June 30.

Brazilian miner Vale is expected to announce record quarterly production of 96.3 million tonnes when it kicks off reporting season early on Tuesday morning Australian time, and Rio Tinto is expected to report strong numbers of its own several hours later. Continue Reading →

When Rio Tinto Met China’s Iron Hand – by Kit Chellel, Franz Wild and David Stringer (Bloomberg News – July 13, 2018)

https://www.bloomberg.com/

In 2010, four employees of the mining giant were jailed and accused of stealing commercial secrets. Today, the company is more reliant on China than ever.

For eight years, Stern Hu rose every morning at 6 a.m. in Qingpu Prison near Shanghai. He and the dozen men who shared his cell would blearily pull on their blue-and-white-striped uniforms and line up in front of their bunks for the day’s first duty: greeting the guards. “Good morning, officer!” they’d shout. “Thank you for taking care of us, officer!”

Everyone in Brigade No. 8, the foreign prisoners unit, knew Hu. The quiet 61-year-old stood a head taller than the rest. Chinese-born, with an Australian passport and a shock of white hair, he’d been a star at Rio Tinto Group, one of the world’s largest mining companies, before being sent to prison in 2010 for stealing trade secrets and taking bribes. The Chinese government said his actions had cost the country’s steel industry as much as $100 billion.

To the members of Eight Brigade, Hu was also the guy who ran the library. After a breakfast of rice gruel with a spoonful of pickled vegetables, he’d take his post at a small desk next to some bookshelves at one end of the common room. Continue Reading →

Indonesia to pay $3.85 billion for majority stake in Freeport’s Grasberg copper mine – by Wilda Asmarini and Bernadette Christina Munthe (Reuters U.S. – July 11, 2018)

https://www.reuters.com/

JAKARTA (Reuters) – Indonesia on Thursday struck an agreement with Freeport-McMoRan Inc and Rio Tinto to buy a controlling stake in the world’s second-biggest copper mine via a series of transactions valued at $3.85 billion.

The heads of agreement establishes a structure for Indonesia, through its state-owned mining holding company PT Inalum, to gain control of the Grasberg mine located in the country’s eastern province of Papua. The deal should cap years of wrangling over the rights for the site as Jakarta seeks to gain greater control over its mineral wealth.

Last August, the two sides agreed to let Freeport (FCX.N) keep operating the mine possibly until 2041 while ceding control over its local unit, PT Freeport Indonesia. Continue Reading →

Rio and BHP to win from China’s blue-sky wars – by Matthew Stevens(Australian Financial Review – July 5, 2018)

https://www.afr.com/

China has moved to further embed pollution controls across a broader sweep of its industrial landscape in a move that reinforces the shared view of Australia’s biggest miners that price premiums being earned by quality iron ore and coal are now enrichingly structural.

A new three-year action plan announced on the official government website more than doubles the number of major cities targeted for pollution with the migration of the regime south beyond the provinces that surround Beijing to the Yangtze delta and Shanghai.

Confirmation of reforms that were first flagged towards the end of last winter’s successful blue-skies campaign acts as reinforcement of BHP’s planned changes to the Pilbara product mix and of Rio Tinto’s pursuit of mining capacity flexibility that will allow it to best respond to China’s increasingly seasonal raw-materials demand pull. Continue Reading →

Stern Hu release: Here’s why the former mining executive was convicted in China (Australian Broadcasting Corporation – July 4, 2018)

http://www.abc.net.au/

Australian citizen and former Rio Tinto executive Stern Hu has been released from jail after nine years in detention in China. It’s a long time since the former head of the mining company’s iron ore team in Shanghai was convicted, so here’s a refresher on the case.

When was Mr Hu arrested and convicted?

Mr Hu and three of his Chinese colleagues were arrested in 2009 during contentious iron-ore contract talks between top mining companies and the steel industry in China. The next year, they were convicted of accepting bribes totalling about $14 million and stealing trade secrets. Mr Hu was given a 10-year sentence, which was reduced for good behaviour.

What did we find out during the case? Continue Reading →

Jean-Sebastien Jacques is redesigning Rio Tinto for the new world order – by Matthew Stevens (Australian Financial Review – July 1, 2018)

https://www.afr.com/

Jean-Sebastien Jacques is a leader well-suited to the now routine tempests of the Trump era. If there is a theme consistent through the fluid narrative of his opening years as Rio Tinto chief executive it is that the practices of the past are now no guide to the needs of the present and future.

Jacques is not prepared to take anything for granted – free trade, social licence, the way we work, trust in sovereigns or the relationships between corporations and the social orders it inhabits.

Rio’s boss was at his free-speaking, free-thinking entertaining best before an audience gathered for that annual oddity, the Melbourne Mining Club’s London dinner. Jacques subsequently garnered headlines by once again warning that miners faced a return of double-digit inflation. Continue Reading →

Rio Tinto ready to splash out on copper – by Barbara Lewis and Clara Denina (Reuters U.S. – June 29, 2018)

https://www.reuters.com/

LONDON (Reuters) – Rio Tinto wants copper, and it’s ready to pay top-dollar. The global miner would be willing to fork out a large premium over market value to secure a prime asset as it tries to reduce its reliance on iron ore, company and banking sources told Reuters.

If it can’t land a big copper project, it is weighing the cumulative power of a series of more modest acquisitions to increase its exposure to a metal expected to be in high demand from the electric vehicle and renewable energy industries, the sources said.

The approach under CEO Jean-Sebastien Jacques marks a shift for Rio Tinto, known for its cautious strategy since it was badly burned in the commodity price crash earlier this decade after a series of damaging acquisitions. Continue Reading →