Archive | Rio Tinto

Aussie iron miners struggle to keep pace with Vale – by Peter Ker (Australian Financial Review – October 16, 2018)

https://www.afr.com/

Australian iron ore miners have struggled to keep pace with Brazilian miner Vale, with BHP and Fortescue expected to follow in Rio Tinto’s footsteps by reporting softer exports of the steelmaking ingredient in recent months.

Rio confirmed on Tuesday that maintenance disruptions and the death of an employee had contributed to weaker than expected iron ore exports in the three months to September 30, and data from Port Hedland suggests its tenants (BHP, Fortescue, Roy Hill, Mineral Resources and Atlas Iron) exported six per cent less iron ore in the period compared to the previous quarter.

BHP is scheduled to confirm its iron ore exports on Wednesday morning, with RBC predicting its Australian division shipped 72 million tonnes in the three months to September 30. Continue Reading →

Rio Tinto owes Sam Walsh $28m, the time has come to pay or explain why not – by Matthew Stevens (Australian Financial Review – October 15, 2018)

https://www.afr.com/

The final weeks of November will deliver Rio Tinto’s board the opportunity to right what looks, for all the world, like a reputation-scarring wrong forced on the man who did so much to recover the miner’s financial standing.

One of the most immediate and delicate of the legacy issues facing Rio Tinto’s relatively new chairman, Simon Thompson, is whether or not to pay former chief executive Sam Walsh.

Now, you might wonder why the current chairman has any level of influence over the remuneration of an executive who left the business before Thompson joined the board and a full 19 months before the suave Oxon assumed the mantle of long-time Rio chairman, Jan du Plessis? Continue Reading →

Rio Tinto pushes Grasberg deal closure into 2019 – by Peter Ker (Australian Financial Review – September 30, 2018)

https://www.afr.com/

Rio Tinto could be waiting up to nine months for the proceeds of its Grasberg copper divestment to flow through, despite clearing a significant hurdle on the transaction in recent days.

Indonesian state-owned company PT Indonesia Asahan Aluminium (Inalum) signed binding agreements with Rio and its partner Freeport McMoran to reshape the ownership structure of the mine, under a deal that will give Inalum majority ownership and Rio $US3.5 billion in cash proceeds.

But the “binding” deals were said to be conditional on further approvals, including from anti-trust regulators in several nations. Continue Reading →

Power plant delays fuel tensions over Rio’s giant Mongolia copper mine – by Barbara Lewis and Munkhchimeg Davaasharav (Reuters U.S. – September 13, 2018)

https://www.reuters.com/

LONDON/ULAANBAATAR (Reuters) – Nearly 10 years on from the launch of a giant copper and gold project in Mongolia, Rio Tinto is still looking to secure a domestic power source it needs for the mine under an agreement with the government.

Oyu Tolgoi, located in the South Gobi region near landlocked Mongolia’s southern border with China, is scheduled to complete a $5.3 billion underground expansion for first production by 2020, creating one of the world’s biggest copper suppliers.

The project, launched in 2009 and 34 percent-controlled by Mongolia, is set to transform the country’s tiny economy, and is also key for Rio as the biggest potential growth area for its copper business. But it has been beset by squabbles over cost overruns and claims of unpaid taxes. Continue Reading →

‘Let me buy Rio Tinto’: China’s brazen bid to buy our companies – by Peter Hartcher (Sydney Morning Post – September 11, 2018)

https://www.smh.com.au/

Within two days of being sworn in as the 38th Treasurer of Australia, Joe Hockey found himself in a traditional-style hut on the island of Bali. Chinese officials had been back and forth to the hut again and again to arrange to the last detail the meeting that Hockey was about to have with China’s finance minister.

But when Lou Jiwei entered, Hockey was utterly unprepared for his opening words. Lou shook the Australian’s hand, sat down, lit a cigarette without asking Hockey’s permission and said: “Why won’t you let me buy Rio Tinto?” the giant Anglo-Australian mining conglomerate.

It was Hockey’s first meeting with his Chinese counterpart, once ranked by Forbes magazine as the 30th most powerful person on earth. Recovering from his surprise, Hockey replied: “That’s fine – as long as you’ll let Qantas buy China Southern”, one of the Middle Kingdom’s big three airlines. Continue Reading →

NEWS RELEASE: Rio Tinto celebrates opening of new diamond pipe at Diavik (August 20, 2018)

http://www.riotinto.com/

YELLOWKNIFE, Aug. 20, 2018 /CNW Telbec/ – Rio Tinto today celebrated the opening of a fourth diamond pipe, known as A21, at the remote subarctic Diavik Diamond Mine in the Northwest Territories of Canada.

The new open pit pipe will provide an important source of incremental supply over the next four years to sustain production levels at the Rio Tinto operated mine.

The Honourable Wally Schumann, Minister of Industry, Tourism and Investment with the Government of the Northwest Territories was guest of honour at the celebration attended by Indigenous community representatives, joint venture partners and Rio Tinto employees. Continue Reading →

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 →