Rio Tinto – Page 39 – Republic of Mining

BHP, Rio warn strong Australian dollar will lead to more job losses – by Amanda Saunders (Sydney Morning Herald – May 26, 2014)

May 30, 2014

http://www.smh.com.au/

Mining giants BHP Billiton and Rio Tinto have warned the combination of high costs, high taxes and the strong Australian dollar has put a “vice-like grip” on the $60 billion coal industry that will force further mine closures and job losses this year.

About 12,000 jobs have been cut from the sector over the past two years amid a string of mine closures and delays to projects by companies ¬including BHP, Rio, Glencore, Vale and Peabody Energy.

BHP global coal president Dean Dalla Valle said there would be “difficult times ahead in a period of such oversupply”, particularly given many operators are not making money at ¬current depressed prices.

“You will see the industry adjust itself, shake itself out. You are going to see more exits from the market.” While both miners remain confident in the long-term outlook, they predict a brutal period ahead for the industry as prices remain under intense pressure.

The contract price of premium hard-coking coal has fallen to $US120 a tonne in the June quarter from $US330 a tonne in 2011, while thermal coal prices have dropped to $US74 a tonne on the spot market from $US125 in mid-2011.

Jacynthe Côté exiting as head of Rio Tinto’s aluminum unit – by Bertrand Marotte (Globe and Mail – May 28, 2014)

May 29, 2014

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

MONTREAL — Jacynthe Côté, Rio Tinto Ltd.’s head of aluminum operations, is stepping down. The Anglo-Australian global mining giant said on Tuesday that Ms. Côté is leaving Montreal-based Rio Tinto Alcan “for personal reasons to pursue other interests.”

She is being replaced by BP PLC veteran Alfredo Barrios, 48, the executive director and executive vice-president (downstream) at joint venture TNK-BP, one of Russia’s largest vertically integrated oil and gas companies. Ms. Côté was promoted to the job in 2009, two years after her predecessor – Richard Evans – presided over the huge $38-billion takeover of Alcan Inc. by Rio Tinto.

“Jacynthe has long been a key member of Rio Tinto’s leadership team and has enjoyed a successful career with Rio Tinto and Alcan spanning more than 25 years,” said Rio Tinto chief executive Sam Walsh.

“The ongoing improvement in the performance of the Aluminium business is testimony to her commitment to the business throughout her career.” Under Ms. Côté’s watch, aluminum prices fell dramatically, forcing significant cost-cutting measures and job cuts at head office and elsewhere.

Côté’s exit leaves Rio Tinto at crossroads – by Sophie Cousineau (Globe and Mail – May 28, 2014)

May 28, 2014

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

It is a bittersweet end to Jacynthe Côté’s distinguished 26-year career at Rio Tinto Alcan.

The Laval University-trained chemist who rose through the ranks at Alcan became head of Rio Tinto’s aluminium business in January, 2009, just as the financial crisis was ripping through the world economy. No other woman had accomplished such a feat in the company’s 112-year history.

On the day she was appointed, though, she announced the closing of the Beauharnois, Que., smelter she once directed, and that pretty much set the tone for her five-year term. As aluminium prices fell and Rio Tinto suffered from an acute case of buyer’s remorse over its $38.1-billion (U.S.) acquisition of Alcan – in cash no less – Ms. Côté closed smelters, laid off employees and turned every rock she set her eyes on to cut the producer’s costs.

Last year, the unit’s underlying earnings, at $557-million, were 10 times higher than in 2012. Now that the worst of the mining downturn appears behind Rio Tinto, Ms. Côté is leaving the company’s aluminium unit to “pursue other interests.” However, her replacement by BP veteran Alfredo Barrios as chief executive comes at a time when Alcan’s future within Rio Tinto is clouded.

Rio, Guinea Agree on Terms for $20 Billion Iron-Ore Mine – by Jesse Riseborough (Bloomberg News – May 27, 2014)

May 27, 2014

http://www.businessweek.com/

Rio Tinto Group (RIO), the world’s second-biggest mining company, agreed financial terms with the government of Guinea for a potential $20 billion iron-ore mine, port and rail project that may start by the end of this decade.

The accord will underpin talks with new investors for the rail and port component of developing the Simandou resource, Rio and its project partners Aluminum Corp. of China Ltd., International Finance Corp. and the government of Guinea said yesterday in a joint statement. The parties gave no commitment on when production will start.

Simandou is the world’s largest untapped iron-ore resource and Rio has estimated the mine could produce 100 million tons of the steelmaking ingredient a year. The project could double the West African nation’s current gross domestic product and add 45,000 jobs in the country, according to the statement.

The accord doesn’t commit Rio to building the project and analysts have said a legal dispute over the ownership of adjacent ground at Simandou could delay first production into the next decade. The agreement signed yesterday covers two of four mining permits for an ore-rich area in the southeast of Guinea.

Aluminium’s day dawns as iron ore dims – by Matt Chambers (The Australian – May 12, 2014)

May 12, 2014

http://www.theaustralian.com.au/business

Tinto’s much-maligned aluminium business could be a surprise saving grace for the miner as iron ore prices soften, with the company’s cost-cutting drive set to produce strong cashflows and boost the chance of big returns to shareholders.

The turnaround in aluminium, which Deutsche Bank is forecasting will contribute $US2 billion ($2.1bn) of annual free cashflow to Rio by 2017, comes as chief executive Sam Walsh predicts an end to the Chinese overcapacity that has hobbled the industry in recent years.

While there is no hope of recovering the $US25bn of value wiped from the aluminium unit’s book value since Rio paid $US40bn in cash for Alcan just before the global financial crisis, some investors are positioning themselves for a rebound.

“We have shareholders on our portfolio because they believe our aluminium business is going to be very prospective,” Mr Walsh told the company’s annual meeting in Melbourne last week. “That’s their call, but it is an indication that people expect there will be improvement in the business.”

Deutsche Bank analysts also sense a change.

Rio Tinto Indicates Possible End to Austerity – by Rhiannon Hoyle (Wall Street Journal – May 8, 2014)

May 9, 2014

http://online.wsj.com/home-page

Mining Company’s Management Plans to Weigh Growth Options Next Year

MELBOURNE, Australia—Rio Tinto PLC hinted it might soon be ready to call an end to austerity, with its top management planning to weigh future growth options in 2015 after two years of aggressive spending cuts.

Suggesting the worst of its cutbacks may be in the past, Sam Walsh, the Anglo-Australian company’s chief executive, said his team would prepare new investment proposals to be put to the board next year, in a sign the company might be preparing to change direction.

The world’s No. 2 iron-ore producer has been one of the most aggressive cost cutters among major mining companies, slashing spending and selling unwanted assets after commodity prices took a tumble and investors began to demand greater capital discipline following years of heavy investment.

Mr. Walsh said the focus in 2014 would remain on paying down debt and strengthening the balance sheet. “That brings us to next year, and brings us to options we are providing the board in relation to how the future cash flow (will) be used,” he told a press briefing Thursday, following the company’s Australian annual general meeting.

Driverless mine trucks heading for east coast – by Matt Chambers (The Australian – May 5, 2014)

May 5, 2014

http://www.theaustralian.com.au/business

DRIVERLESS mining trucks that are becoming more common in iron ore mines in Western Australia’s Pilbara region are expected to appear in NSW and Queensland in the next 12 months under plans being hatched by BHP Billiton.

The autonomous trucks, which cut costs by reducing the need to house, feed and employ four drivers, would be trialled at BHP coalmines, BHP coal president Dean Dalla Valle said.

BHP has followed the lead of rival Rio Tinto in introducing the robot trucks into the big iron ore mines in the Pilbara, but after coalmine trials in New Mexico, it is taking the lead in bringing them to the east coast, something Rio has not yet proposed to do.

“We’re looking at two opportunities in coal to do the same thing, in Queensland and NSW,” Mr Dalla Valle told The Australian. “There’s no doubt it will happen, and I’d like to think that within 12 months we will be running trials.”

BHP last month indicated its late-mover status in automated equipment was not a reluctance to employ the technology. It said it was extending a robot truck trial at its Jimblebar iron ore mine to the nearby Wheelara mine.

China’s need for steel will sustain ore miners: Rio – by Andrew Burrell (The Australian – May 2, 2014)

May 2, 2014

http://www.theaustralian.com.au/business

RIO Tinto iron ore boss Andrew Harding says iron ore prices will remain strong for at least another 10 to 15 years, declaring he pays no attention to short-term fluctuations in the price of the key export commodity.

Speaking at the In the Zone conference at the University of Western Australia, a bullish Mr Harding said the most important indicator for iron ore was the rate of urbanisation in China, which buys 60 per cent of the world’s seaborne iron ore.

With the iron ore price slipping to $US105.40 ($113.53) yesterday — a 20-month low — and prompting a sharp fall in iron ore miners’ shares, some analysts have forecast a return to prices well below $US100 in coming months as increased supply hits the market and Chinese economic growth slows.

That would hit the profits of Rio and its Pilbara iron ore rivals BHP Billiton and Fortescue Metals Group. It would also eat into the coffers of the cash-strapped federal and West Australian governments.

The three big iron ore miners have pulled back on their future expansion plans, preferring to preserve cash and boost productivity rather than commit to multi-billion-dollar greenfields projects.

Rio Tinto sues Israeli billionaire Beny Steinmetz – by Ian Cobain (The Guardian – May 1, 2014)

May 2, 2014

http://www.theguardian.com/uk

Anglo-Australian mining company alleges that BSG Resources and Brazilian mining corporation Vale were guilty of taking their mining rights

The Anglo-Australian mining company Rio Tinto is suing Israeli billionaire Beny Steinmetz, accusing him of stealing one of the world’s largest untapped iron ore reserves with a scheme that breached US laws against organised crime.

In the latest twist in the legal saga surrounding the ore reserves in Guinea, Rio Tinto has brought a claim in New York alleging that Steinmetz, his company BSG Resources (BSGR), and the Brazilian mining corporation Vale were guilty of “the theft of Rio Tinto’s valuable mining rights … through a scheme in violation of the Racketeer Influence and Corrupt Organisations Act”.

The move comes three weeks after the government of Guinea announced it would strip Guernsey-registered BSGR of the concession because the company had obtained them through corruption.

The concession was taken from Rio Tinto in 2008 and subsequently handed to BSGR, with the company saying it had secured the deal through a $165m (£98.5m) investment in the exploration of the area. BSGR then sold 51% of its prize to Vale for $2.5bn.

No surprise mining taxes [Australia] please: Rio head – by Kim Christian (Sydney Morning Herald – May 1, 2014)

May 1, 2014

http://www.smh.com.au/

Rio Tinto’s head of iron ore Andrew Harding has warned Australia should not squander its reputation as a stable place to do business.

As the iron ore-focused miner began legal action in the US against its Brazilian rival Vale, Mr Harding urged the Australian government not to introduce surprising tax changes which could deter foreign investment.

“It really does startle an organisation,” Mr Harding told a business lunch in Perth. “Australia’s not the only place you can mine iron ore. “There’s an awful lot of high grade iron ore sitting in Africa, and for a whole lot of instability reasons it hasn’t been mined to date.”

His comments come as Rio Tinto filed a lawsuit in the US District Court against Brazilian miner Vale and an Israeli company over the rights to develop the massive Simandou iron ore deposit in Guinea in west Africa.

Rio alleges billionaire Beny Steinmetz and his company BSG Resources bribed officials and conspired with Vale to steal mining rights to the multi-billion tonne Simandou deposit but it has not specified the amount of damages it is seeking. Mr Harding said a period of volatile industrial relations and iron ore supply disruptions in Australia several decades ago had opened the door for Brazil to build the biggest iron ore business in the world.

War of Titans: Rio Tinto suing Vale over iron ore rights in Guinea – by Cecilia Jamasmie (Mining.com – April 30, 2014)

April 30, 2014

http://www.mining.com/

In a new and unexpected twist in the battle to control Guinea’s rich Simandou iron ore deposits, the companies once operating in the area have began a series of billion-worth lawsuits, with iron ore miner No.2 Rio Tinto (LON, ASX:RIO), suing the world’s largest producer Brazil’s Vale (NYSE:VALE).

The first one to shoot was Vale, which filed Monday an action against his former partner in Guinea BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz’s empire, before the London Court of International Arbitration, Swiss newspaper Le Temps reports (in French).

One of the paper’s sources said Vale is seeking a minimum compensation of US$1.1 billion, due to losses suffered because BSGR’s actions in Guinea. Last week, The West African nation concluded that BSG Resources obtained the Simandou and Zogota concessions through corrupt practices and decided to revoke all mining rights for both companies.

Vale had a 51% stake in the project, which acquire from BSGR in 2010 in a $2.5bn deal.The company however only paid $500 to Steinmetz’s firm, suspending all instalments left as soon as it learned of the accusations against its partner.

Guinea’s President Alpha Conde said Wednesday it was clear the Rio de Janeiro-based firm did nothing wrong, adding the mining giant is free to reapply to acquire rights to one of the largest untapped iron ore deposits in the world.

Rio Tinto’s stance on Kakadu cleanup alarms Indigenous owners – by James Norman (The Guardian – April 24, 2014)

April 24, 2014

http://www.theguardian.com/uk

Giant says rehabilitation of uranium mine – site of a radioactive spill last year – is a matter for its Australian subsidiary

It’s a long way from central London to Kakadu national park in Australia’s Northern Territory. When Rio Tinto’s chief executive, Sam Walsh, addressed shareholders at the company’s annual general meeting last week, there was a strong sense of the distance.

Walsh refused to offer any guarantees that the mining giant would help its Australian subsidiary company Energy Resources of Australia (ERA) clean up the site of its Ranger uranium mine within the park.

“This is a public Australian company and clearly that is an issue for them,” Walsh said. When pressed on the point he added: “We are clearly shareholders, but it is a matter for all shareholders and a matter for the ERA board.” The Ranger mine was in the news in December last year when a leach tank containing 1.4m litres of acidic radioactive slurry leaked.

Walsh’s words were alarming for Mirarr traditional owners who live in the park and are no strangers to negotiating with mining companies. They are anxious about ERA’s commitment to the rehabilitation of the site.

Rio Tinto heavily blamed by protesters over 41 mine worker deaths – by Rupert Neate (The Guardian – April 15, 2014)

April 16, 2014

http://www.theguardian.com/uk

Global trade union IndustriAll accuses Anglo-Australian firm of ‘very wide breaches of fundamental rights’ in failure

Protesters and unions from around the world heavily criticise mining company Rio Tinto on Tuesday over alleged lapses in safety leading to the deaths of 41 people and a string of claimed environmental abuses.

Global trade union IndustriAll, which represents 50 million industrial workers across the world, accused Rio of “very wide breaches of fundamental rights” and said the Anglo-Australian mining company could have done more to prevent the 41 deaths last year.

Kemal Özkan, assistant general secretary of IndustriAll, said the deaths of 33 gold miners when a tunnel collapsed at a Rio joint venture mine in Indonesia last May could have been avoided.

He claimed that the Indonesian human rights commission found that the operators of the Grasberg mine, owned with US company Freeport, “had the ability to prevent this from happening but didn’t”. “The lack of effort jeopardised the lives of others. The gravity of this case is serious,” he quoted Indonesian human rights commissioner Natalius Pigai as saying in a report into the incident.

UPDATE 2-BHP and Australian rivals raise iron ore targets as competition grows – by James Regan (Reuters India – April 16, 2014)

April 16, 2014

http://in.reuters.com/

SYDNEY, April 16 (Reuters) – Australian miners are racing ahead with plans to expand iron ore production to capture more of the Chinese market for the steelmaking ingredient, amid strong competition from the world’s biggest supplier Vale of Brazil.

Efforts to beat already ambitious output targets comes as a crackdown in China on using commodities as collateral to raise cash risks unleashing iron ore sales from tens of millions of tonnes sitting in Chinese port warehouses, pressuring prices.

Fortescue Metals Group Ltd, which is raising production 57 percent this year, says its needs iron ore prices to stay between $110-$120 a tonne for the next 12-18 months in order to pay off a targeted $2.5 billion in debt.

The Australian Bureau of Resources and Energy Economics forecast an average price of $110 a tonne this year but only $103 a tonne in 2015. By 2016, Citigroup sees the price falling to $80.

Iron ore was quoted at $117.10 .IO62-CNI=SI on Wednesday. BHP, the world’s biggest diversified mining company, on Wednesday lifted full-year iron ore production guidance by 5 million tonnes to 217 million as it pushes ahead with new mine work in Australia.

Despite Slowdown in China, Rio Tinto Stays Committed to Mining Plans – by Stanley Reed (New York Times – April 3, 2014)

April 3, 2014

http://www.nytimes.com/

LONDON — Rio Tinto, one of the world’s largest mining companies, has big plans for pulling even more iron ore from the earth.

It is spending billions of dollars to expand its existing operations in the Pilbara region of Western Australia, where driverless trucks the size of three-story buildings haul iron ore out of 15 mines. The trouble is, the buildup comes just as Rio Tinto’s single biggest customer, China, is losing economic steam and global demand for raw materials like iron ore and copper has been cooling.

On a single day in early March, the spot market price of iron ore — the main ingredient in steel — fell by more than 8 percent, and it is down 12 percent for the year. The price of copper, another essential raw material for industry, has recently hovered near four-year lows.

Though mining executives tend to take the long view of their markets, where price cycles are part of the game, some analysts say that this time the industry may be staring at a deeper set of problems from which miners like Rio Tinto could have trouble extracting themselves. Even as China’s decades-old appetite for steel may be abating, there is a potential iron-ore glut coming because so many mining companies increased production to chase prices that for years were alluringly high.

The stock fell by 13 percent from mid-February to mid-March and since then has regained only about half that ground, even as broader indexes have been on the rise.