Eurobench.com

voda 20 juli 2012 16:33

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BHPB iron ore production update

BHP Billiton’s commitment to invest throughout the economic cycle delivered a twelfth consecutive annual production record in iron ore. Western Australia Iron Ore shipments rose to a record annualised rate of 179 million tonnes in the June 2012 quarter (100 per cent basis).

Consistently strong operating performance, the ramp up of Ore Handling Plant 3 at Yandi, dual tracking of the company’s rail infrastructure and additional ship loading capacity at Port Hedland contributed to the record result. WAIO production in the 2013 financial year is forecast to increase by approximately five per cent from the 2012 financial year.

Samarco’s (Brazil) three pellet plants continued to operate at capacity during the period.

Source -SRI

voda 20 juli 2012 16:33

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BHP Billiton exploration and development report for the year ended Jun 30 2012

This report covers the Group’s exploration and development activities for the June 2012 quarter. Unless otherwise stated, BHP Billiton’s interest in the projects referred to in this report is 100% and references to project schedules are based on calendar years.

BHP Billiton’s proven strategy to invest in large, long life, low cost, expandable, upstream assets, diversified by commodity, geography and market ensures we are well positioned to maintain strong momentum and returns in our major businesses, despite significant volatility in the external environment.

In the 2012 financial year, six major projects delivered first production while a total investment commitment of USD 7.5 billion (BHP Billiton share) enabled another eight major projects to move into execution. In addition,

USD 2.7 billion (BHP Billiton share) of pre-commitment funding was approved to further progress a series of development options.

The six projects to deliver first production included: Western Australia Iron Ore (WAIO) Rapid Growth Project 5 (iron ore); Antamina Expansion and Escondida Ore Access (both copper); Worsley Efficiency & Growth (alumina);

North West Shelf CWLH Life Extension (oil) and the RX1 Project (energy coal). The Antamina Expansion, Escondida Ore Access and RX1 projects will not be reported in future Exploration and Development Reports.

The eight projects that moved into execution span the ferrous, non-ferrous and energy product groups and included: WAIO Orebody 24 (iron ore); Caval Ridge and Appin Area 9 (both metallurgical coal); Escondida Organic Growth Project 1 and Escondida Oxide Leach Area Project (both copper); North West Shelf Greater Western Flank-A (LNG); Cerrejon P40 Project and the Newcastle Third Port Project Stage 3 (both energy coal).

During the June 2012 quarter, BHP Billiton announced approval of the Illawarra Coal Appin Area 9 project and precommitment funding of US$708 million (BHP Billiton share) for the Mad Dog Phase 2 project in the deepwater Gulf of Mexico (oil and gas).

BHP Billiton’s Onshore US drilling and development expenditure totalled USD 3.3 billion in the 2012 financial year.

Petroleum projects

1. Macedon (Australia) 71.43% Gas
Share approved capex (US$m) - 1,050
Initial production target date - CY13
Production capacity (100%) - 200 million cubic feet gas per day.
Quarterly progress - On schedule and budget. The overall project is 71% complete.

2. Bass Strait Kipper (Australia) 32.5% - 50% Gas/Gas Liquids
Share approved capex (US$m) - 900
Initial production target date- CY12(a)
Production capacity (100%) - 10,000 bpd condensate and processing capacity of 80 million cubic feet gas per day.
Quarterly progress - On revised schedule and budget. The overall project is 97% complete

3. Bass Strait Turrum (Australia) 50% Gas/Gas Liquids
Share approved capex (US$m) - 1,350
Initial production target date - CY13
Production capacity (100%) - 11,000 bpd condensate and processing capacity of 200 million cubic feet gas per day.
Quarterly progress - On revised schedule and budget. The overall project is 79% complete.

4. North West Shelf North Rankin B Gas Compression (Australia) 16.67% LNG
Share approved capex (US$m) - 850
Initial production target date - CY13
Production capacity (100%) - 2,500 million cubic feet gas per day
Quarterly progress - On budget. Steady state production remains on track for CY13. The overall project is 94% complete

5. North West Shelf Greater Western Flank-A (Australia) 16.67% LNG
Share approved capex (US$m) - 400
Initial production target date - CY16
Production capacity (100%) - To maintain LNG plant throughput from the North West Shelf operations.
Quarterly progress - On schedule and budget. The overall project is 15% complete.

Minerals projects

1. Antamina Expansion (Peru) 33.75% Copper
Share approved capex (US$m) - 435
Initial production target date - Q1 CY12
Production capacity (100%) - Increases ore processing capacity to 130,000 tpd.
Quarterly progress - First production was achieved in Q1 CY12. The overall project is 92% complete.

2. Escondida Ore Access (Chile) 57.5% Copper
Share approved capex (US$m) - 319
Initial production target date - Q2 CY12
Production capacity (100%) -The relocation of the in-pit crushing and conveyor infrastructure provides access to higher grade ore.
Quarterly progress - First production was achieved in Q2 CY12. The overall project is 95% complete

3. Escondida Organic Growth Project 1 (Chile) 57.5% Copper
Share approved capex (US$m) - 2,207
Initial production target date - H1 CY15
Production capacity (100%) - Replaces the Los Colorados concentrator with a new 152,000 tpd plant.
Quarterly progress - On schedule and budget. The overall project is 13% complete.

4. Escondida Oxide Leach Area Project (Chile) 57.5% Copper
Share approved capex (US$m) - 414
Initial production target date - H1 CY14
Production capacity (100%) - New dynamic leaching pad and mineral handling system. Maintains oxide leaching capacity.
Quarterly progress - On schedule and budget. The overall project is 8% complete.

5. EKATI Misery Open Pit Project (Canada) 80% Diamonds
Share approved capex (US$m) - 323
Initial production target date - CY15
Production capacity (100%) - Project consists of a pushback of the existing Misery open pit which was mined from 2001 to 2005.
Quarterly progress - On schedule and budget. The overall project is 26% complete.

Source -SRI

voda 20 juli 2012 16:34

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BHPB Energy coal production update

were higher than all comparable periods with annual and quarterly production records achieved at two of BHP Billiton’s export orientated operations, Cerrejon Coal (Colombia) and New South Wales Energy Coal (Australia). Longwall mining activity resumed at San Juan Coal (USA) during the June 2012 quarter.

The RX1 Project at New South Wales Energy Coal delivered first production during the June 2012 quarter, significantly ahead of schedule. This project capitalises on strong demand for high ash coal in our key growth markets.

Source -SRI

voda 31 juli 2012 15:14

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Rio Tinto acquires shares in Ivanhoe Mines

Rio Tinto acquired 133,571,192 common shares under Ivanhoe's rights offering at a total cost of USD 934,998,344 or USD 7.00 per share. The purchase represents approximately 51% of the common shares offered under the rights offering. The rights offering, which closed today, was fully subscribed.

Prior to the completion of the rights offering, Rio Tinto owned 377,397,658 common shares of Ivanhoe representing approximately 51% of the outstanding common shares. Upon the completion of the rights offering, Rio Tinto owned 510,968,850 common shares representing approximately 51% of the outstanding common shares.

Rio Tinto also owns 74,247,460 Series D Warrants of Ivanhoe after adjustment to give effect to the rights offering. If Rio Tinto were to fully exercise the Series D Warrants, Rio Tinto would acquire an additional 74,247,460 common shares. Following such issuance, Rio Tinto would own 585,216,310 common shares representing 54.4% of the outstanding common shares.

Rio Tinto has anti dilution rights that permit it to acquire additional securities of Ivanhoe so as to maintain its proportional equity interest in Ivanhoe. Rio Tinto also has the right, until 24 October 2012, to acquire additional Ivanhoe securities under its equity financing right of first offer.

The purpose of Rio Tinto acquiring additional shares under Ivanhoe's rights offering was to honour its contractual obligations to Ivanhoe and to provide additional funding to Ivanhoe to ensure the timely development of Ivanhoe's Oyu Tolgoi copper gold mine in Mongolia.

Rio Tinto has no present intention of acquiring additional securities of Ivanhoe. Depending upon its evaluation of the business, prospects and financial condition of Ivanhoe, the market for Ivanhoe's securities, general economic and tax conditions and other factors, Rio Tinto may acquire or sell some or all of the securities of Ivanhoe.

Source - Rio Tinto

voda 2 augustus 2012 17:01

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BHP Billiton announces Mega Olympic mine project shelved

Global miner BHP Billiton Limited has made public that its investment decision to proceed on the proposed AUD 30 billion mega expansion of the Olympic copper, gold and uranium mine project in South Australia will be delayed and discussed until 2014 affecting the thousand of potential jobs the project development has to offer.

Defying the moderate outlook for commodities in the current year, BHP Billiton confirmed last week that it has forged USD 3 million deal with Copper Range Limited for the transfer of the latter's existing and pending explorations in South Australia's Olympic Dam.

The Weekend Australian said that the expansion decision has been put on hold for two years. It had obtained from an unidentified consulting firm. These documents however were within the knowledge of BHP Billiton Limited insiders. But the global miner did commit that the USD 1.2 billion in already funded pre mine work will be completed which still attests of BHP Billiton Limited's desire to push through with the project pending favorable conditions. This allows the company to remove a substantial amount of waste from the mine in preparation for approval if conditions improve.

BHP Billiton spokeswoman said that "BHP Billiton Limited has outlined that capital is largely committed for FY 2012 and FY 2013 although expenditure associated with major projects in execution decreases substantially from FY 2014. The global miner was expected to have finalized a decision on the project by December of this year.

The deferral consequently delays any potential jobs the global miner had to offer with the project works on the mine. The world's largest open cut mine was expected to generate up to 6,000 new jobs during its 11 year construction phase with 4,000 more operational jobs along the way.

Mr Antonios Papaspiropoulos spokesman of BHP Billiton Limited said that "Investment decisions will be taken to the board in their own time and the relevant economic decisions taken accordingly.”

Spokeswoman said that the company is in the enviable position of having more investment options relative to our capacity to invest and the sequencing of our investment pipeline is currently being looked at in the context of our 5 year planning process. We will approve projects in a sequence that maximizes value, reduces risk and balances the consideration of short and long term returns.

She said that the investment decision deferral will likely affect the indenture agreement the global miner signed and entered into with the state government of South Australia, which covers among others royalty payments.

Mr Tom Koutsantonis South Australia's minister for mining had said recently that BHP Billiton loses the right to proceed with the mine's expansion if it fails to start work by the end of the year.

Mr Jay Weatherill South Australian Premier likewise confirmed receiving word from BHP Billiton that the latter has still yet to make a definite decision on the Olympic Dam expansion. We anticipate, as we have all along, that they'll make a decision before the end of the year.

Source - Au.ibtimes.com

voda 2 augustus 2012 17:02

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Employees at Rio Tinto Alcan Kitimat operations ratify new labor agreement

Employees at Rio Tinto Alcan's Kitimat aluminium smelter and Kemano hydroelectric plant in northwest British Columbia have ratified the labour agreement that was reached on July 24th 2012.

Mr Etienne Jacques COO Rio Tinto Alcan Primary Metal, North America said that "We are pleased that the employees voted in favour of the tentative agreement reached earlier this week. This is an important step, one that will allow us to pursue the transition between the current plant and the modernization project that is underway. This agreement meets our long term commitments to our employees, customers and community in British Columbia."

Source - Rio Tinto

voda 2 augustus 2012 17:04

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Downsizing deals - Rio Tinto to close Sydney office and cut jobs

Reuters reported that global mining giant Rio Tinto is cutting staff in Australia and closing its Sydney office as it battles falling commodity prices and threats to demand from Europe's debt crisis.

Some 30 support and services staff in Sydney and an undisclosed number of employees at the company's much larger operations in Melbourne would be cut.

Rio's Melbourne CBD office employs about 240 staff while another 200 work from the suburb of Bundoora. Most of the downsizing would occur in the Melbourne city office.

Mr David Peever of Rio Tinto said “We are undertaking a review of our support and services functions. There will be a reduction in the size of our Melbourne office and, yes, we do intend to close our Sydney office as well. It's just making sure we are building in resilience in our business to deal with what is essentially a difficult time. We are seeing downturns in commodity prices, European circumstances are hovering over us, and we need to make sure we are very measured in terms of our approach to cost control.”

Source - Reuters

voda 3 augustus 2012 15:42

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BHP schrijft $3,3 mrd af, CEO ziet af van bonus

MELBOURNE (Dow Jones)--BHP Billiton Ltd. (BHP) maakt vrijdag bekend in totaal $3,29 miljard af te schrijven op de Amerikaanse schaliegas- en Australische nikkelactiviteiten, waardoor chief executive Marius Kloppers afziet van zijn jaarlijkse bonus.

BHP wijt de afschrijving van $2,84 miljard op de vorig jaar overgenomen schalie-activiteiten in Fayetteville aan een terugval in de Amerikaanse aardgasprijzen en volgt daarmee BP plc (BP) en Encana Corp. (ECA) die in de afgelopen twee weken eveneens grote afschrijvingen bekendmaakten.

Daarnaast geeft het Anglo-Australische bedrijf aan ook van plan te zijn een last voor belastingen te nemen van $450 miljoen op de waarde van de Australische nikkelactiviteiten, waar een overvloed aan aanbod de marges onder druk heeft gezet. De resultaten van een onderzoek naar andere activa staat voor later deze maand op de agenda. Sommige analisten verwachten een mogelijke afschrijving op de waarde van BHP's aluminiumactiviteiten.

BHP geeft tegelijkertijd aan dat het bedrijf niets zal afschrijven op het vorig jaar augustus voor $12,1 miljard overgenomen Petrohawk Energy Corp, vanwege de mogelijkheid om olie uit schaliegesteente te winnen. De overname van Petrohawk is tot nu de grootste overname sinds Kloppers in 2007 het roer bij BHP overnam.

Mijnbouw- en energiefondsen zijn recent onder druk komen te staan door dalende grondstofprijzen en stijgende operationele kosten, waardoor een groot aantal bedrijven investeringsplannen heroverweegt en kijkt naar het schrappen van banen en verminderen van de kosten.

Door Robb M. Stewart , vertaald en bewerkt door Elco van Groningen; Dow Jones Nieuwsdienst; +31 20 571 52 00; elco.vangroningen@dowjones.com

[verwijderd] 5 augustus 2012 06:43

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$200bn resource projects in doubt as gloomy outlook hits plans

ALMOST $200 billion worth of planned resource investments are looking unlikely as surging costs driven by a high dollar and rising wages combine with a falling outlook to dash a second-stage investment boom.
Illustrating the gloomy outlook for new projects, miners surveyed for a report to be released today have given a bearish outlook and highlighted expected falls in development spending. And those previously surveyed have abandoned new investment plans.
The mining business outlook report, by management consultancy Newport Consulting, revealed only a quarter of 55 mining leaders surveyed planned to invest in major projects this year, down from 52 per cent last year.
Newport managing director David Hand said those still planning investment appeared to be referring only to previously approved spending.
"If commodity prices stay down, then the investment boom is over," he said.
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PS: en Ivanhoe gaat onder """" n ander nickname verder :)

Ivanhoe Mines Changes Name to Turquoise Hill Resources

August 2, 2012 - 05:24:22 PM
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 2, 2012) - Ivanhoe Mines today announced that the company's name change to Turquoise Hill Resources Ltd. (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) now has gone into effect. The new name was approved by shareholders at the company's annual meeting on June 28, 2012.

voda 6 augustus 2012 16:15

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Downsizing deals - Contractors jobs go as BHPP reins in costs

The Australian reported that engineering firms working on BHP Billiton's multi billion dollar expansion projects in the Pilbara have started sacking and redeploying staff as the world's biggest miner cuts spending after a review of its iron ore operations.

Executives in the Perth mining services industry confirmed that redundancies at firms including GHD, Fluor, Sinclair Knight Merz and Calibre Group were linked to BHP's decision to cut costs and defer its growth projects.

The dismissals, which have affected engineers, designers, draughtsmen and support staff, are seen as evidence that the resources boom has peaked, but sources said there was still plenty of work available for engineering firms.

The Weekend Australian has been told that GHD laid off about 35 contractors who had been working on BHP's Pilbara expansion projects, including accommodation and administration facilities, rail workshops and transport infrastructure. When GHD won the engineering, procurement and construction management contract in 2011, it said its team of 70 people would grow to 200 within 12 to 18 months.

A spokesman for Calibre Group said 50 staff who had been working on BHP's Pilbara projects had been made redundant and another 30 had been redeployed.

The wave of white collar redundancies comes after The Australian revealed BHP iron ore boss Mr Jimmy Wilson told staff the company is reviewing its Pilbara growth plans and is worried about substantial cost escalation and slumping commodity prices. There is mounting speculation that BHP is poised to delay the AUD 19 billion development of a new harbor at Port Hedland, which was to have underpinned a huge expansion of its Pilbara operations. The sackings in Perth came as BHP CEO Mr Marius Kloppers said he would give up his multi million dollar bonus after announcing the company had been forced to write down its US shale gas assets by USD 2.84 billion and its West Australian nickel business by USD 450 million.

Source - The Australian

voda 6 augustus 2012 16:15

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BHP Billiton takes USD 2.84 billion writedown on shale assest in US

BHP Billiton announced that it has completed its full year assessment of its United States shale assets.

Low US gas prices due to a short term over supply of gas have resulted in an impairment of USD 2.84 billion (before tax) against the carrying value of the Fayetteville shale gas assets acquired from Chesapeake Energy in February 2011.

BHP Billiton CEO Mr Marius Kloppers said “The Fayetteville charge reflects the fall in United States domestic gas prices and the company’s decision to adjust its development plans by shifting drilling from dry gas to the more liquids rich fields. While we have responded appropriately to the changed market conditions today’s impairment is clearly disappointing.”

Following a comprehensive review, BHP Billiton has concluded that the value of the more extensive onshore United States shale liquids and gas assets acquired through the acquisition of Petrohawk Energy Corporation in August 2011 is not affected. The development of these assets is expected to create substantial, long term shareholder value.

Mr Kloppers said: “Our decision to enter the North American shale hydrocarbon business about 18 months ago was taken after extensive deliberation and due diligence. Our work convinced us that this significant, low-carbon fuel source would play a meaningful role as the world makes its future energy choices. We are still of this view, particularly given the ongoing positive technological advancements in the shale industry.

He said "We believe that our dry gas assets are well positioned for the future given their competitive position on the industry cost curve. In the short term, the accelerated development of our liquids rich shales will continue to complement investment in our traditional project pipeline given the high rates of return on offer and the rapid payback on incremental investment.”

Source - BHPB

voda 6 augustus 2012 16:18

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BHP Billiton CEO Mr Kloppers to forgo bonus

Reuters reported that BHP Billiton said that CEO Mr Marius Kloppers will forgo his annual bonus after it was forced to write down the value of its US shale gas assets by USD 2.84 billion.

The head of BHP's petroleum division Mr Mike Yeager will also not be paid a bonus for the last financial year after the massive impairment charge on the assets only bought in 2011.

BHP chairman Mr Jac Nasser welcomed Mr Kloppers' and Mr Yeager's decision to forgo any bonus. He said “As a result of the writedown both Marius Kloppers and Mike Yeager have advised the remuneration committee that they do not wish to be considered for a bonus for the 2012 financial year. The remuneration committee and the board respect and agree with that decision.”

Source - Reuters

voda 6 augustus 2012 16:21

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BHP Billiton takes AUD 450 million writedown on nickel assets

BHP Billiton announced that it has completed its full year assessment of its Australian nickel assets.

As per Reuter report, BHP Billiton would take AUD 450 million writedown on Australian nickel operations after a plunge in commodities prices.

Nickel, priced universally in U.S. dollars, peaked at just under USD 29,500 per tonne in 2011 and prices have largely been on a downward slope since. The London Metal Exchange three month contract price stood at USD 15,350 a tonne on Friday.

Source - Reuters

voda 8 augustus 2012 16:05

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Rio Tinto voorziet piek Chinese staalvraag in 2030

AMSTERDAM (Dow Jones)--China's overgang naar een consumenten geleide economische groei zal naar verwachting resulteren in een groeiende vraag naar staal, die een piek zal bereiken in 2030, aangezien 's werelds grootste afnemer van vele grondstoffen zich afzet van een door investeringen aangevoerde groei, meldt de hoofdeconoom van mijnconcern Rio Tinto (RIO) woensdag.

Rio Tinto, de op e e n na grootste ijzererts producent naar productie na het Braziliaanse Vale SA (VALE), voorspelt dat de Chinese vraag naar staal zal pieken op circa 1 miljard metrieke ton ruwe staal in 2013. Dit terwijl er het afgelopen jaar circa 683 miljoen ton werd geproduceerd in China. Rio's visie is in grote lijnen een afspiegeling van de voorspellingen die gedaan zijn door BHP Billiton (BBL), de op twee na grootste ijzerertsproducent, die verwacht dat het Chinese staalgebruik een piek zal bereiken na 2025.

"We verwachten dat Chinese consumenten in de loop der tijd de drijvende kracht zullen zijn achter de Chinese economie. Deze transitie zal een meerjarig proces zijn en daarmee verwachten we dat China's vraag naar vele grondstoffen zal blijven toenemen in de komende jaren, voor de vraag een piek bereikt in de komende twintig jaar", stelt Vivek Tulpule in zijn vooruitzicht.

Tulpule voegt daaraan toe dat tussen nu en 2030, India en landen in Zuidoost-Azie naar verwachting steeds belangrijkere bronnen zullen worden in de vraag naar grondstoffen, waaronder staal.

Op de korte termijn verwacht Tulpule dat de grondstofprijzen volatiel zullen blijven, aangezien de schuldencrisis in de eurozone zijn tol eist op de vraag naar staal, en andere ontwikkelde landen kampen met hun hoge staatsschulden.

Door Alex MacDonald. Vertaald en bewerkt door Ellen Proper; Dow Jones Nieuwsdienst: +31-20-5715200; ellen.proper@dowjones.com

voda 8 augustus 2012 16:48

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Rio Tinto to invest USD160 million in Mozambique coal project

Mozambican daily newspaper Notícias, citing Mr Eric Finlayson MD of Rio Tinto Mozambique, reported that Rio Tinto Coal Mozambique plans this year to invest USD 160 million

On Monday, Rio Tinto Coal Mozambique opened a business centre in Tete to ensure that local suppliers can benefit from the increasing number of opportunities offered by the company. The centre will make it possible for local suppliers to present their products and services to Rio Tinto as well as to inform them about the company’s needs and register them as suppliers.

Source - macauhub.com.mo

voda 9 augustus 2012 16:17

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Coal to drop as steel output slows in BHPB setback - Report

Coal used to make steel is set to drop to the lowest price in two years, eroding earnings at BHP Billiton Limited and Rio Tinto Group, as European demand wanes and China shifts supply contracts to Mongolia from Australia.

According to seven analysts and industry officials in a Bloomberg survey, the contract price may drop 11% to USD 200 a tonne in the three months to December 31st 2012 from USD 225 a tonne this quarter. The spot price in China fell 24% to USD 179.50 as of August 2nd 2012, the lowest in 2011.

A deepening debt crisis in the euro zone has dragged down demand and prices of commodities, forcing the world's largest steelmaker ArcelorMittal to shutter or idle plants in the region. Slowing economic growth in China, the second biggest importer of metallurgical coal, has increased chances of output cuts at mills and further shrinkage in demand for the fuel.

Mr Tim Cahill, an analyst at J&E Davy Holdings Limited in Dublin, said that "Steel demand in Europe is very weak and consumption has slowed dramatically in recent months. It'll get worse in the second half as government spending slows and banks stop lending to home buyers. Unless the US, Europe, China pump in serious stimulus, global steel demand will remain subdued."

The EU produced 14.73 million tonnes of steel in June 2012, the lowest output for that month since 2009.

Possible higher supplies will also put pressure on prices after the BHP Billiton Mitsubishi Alliance, the world's biggest exporter of steelmaking coal, resumed operations last month at its Queensland mines, pruning the risk of shortages.

According to a March 22nd 2012 Goldman Sachs Australia Pty report, the venture supplies about 18% of global coking coal.

Mr Jim Truman, a coal market analyst at Hill & Associates in Morgantown, said that "If BHP Mitsubishi mines are successful in bringing on significant output quickly, prices will possibly decline below USD 200 a tonne. All steel companies will benefit and almost all coal miners will lose revenue."

According to the average of 20 analyst estimates compiled by Bloomberg, full year profit at BHP, slated to report earnings this month, may drop 24% to USD 17.9 billion. Credit Suisse AG analysts, revising down commodity price forecasts, cut their full year profit estimate for BHP by 7%.

According to the average of 11 estimates compiled by Bloomberg, analysts trimmed 2012 profit estimates for Rio on lower commodity prices and slowing growth. Rio is expected to today report first half net income of USD 5.04 billion.

Ms Kelly Quirke, a Melbourne based spokeswoman for BHP Billiton, declined to comment on falling coking coal prices, its impact on the company or plans to cut output, as did Ms Karen Halbert, a spokeswoman for Rio Tinto.

About 44% of Alpha Natural Resources Inc's revenue in 2011 and more than 10% of BHP's sales in the year ended June 30th 2011 came from coking coal. The fuel made up about 10% of Anglo American Plc's revenue in 2011.

Source - Bloomberg

voda 9 augustus 2012 16:18

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UGL snares USD 99 million BHP Billiton contract

DEVELOPMENT at BHP Billiton’s Jimblebar Mine continues with a USD 99.45 million contract awarded to UGL.

The mining services contractor will build and install equipment for the company’s ore stockpile, crushing, scalping and product screening. It will also install interconnecting conveyors.

It follows a USD 74.1 million contract that BHP awarded to Downer EDI last month to build power lines and substations at the mine.

Work on the development started in March last year as part of BHP’s almost USD 10 billion investment in its iron ore projects in WA.

Source - Herald Sun

voda 10 augustus 2012 16:49

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Aluminium the biggest burden on bottom line of Rio Tinto

Rio Tinto's underlying USD 5.2 billion profit for the June half was down from USD 7.8 billion a year earlier but ahead of estimates by about USD 300 million and its iron ore sector is still a superstar. Rio's vertically integrated aluminium division is the doppelganger even after big write downs it is USD 27 billion nightmare.

Weaker commodity prices cut USD 1.94 billion from Rio's earnings but the iron business is still supremely profitable. Iron ore revenue edged down from USD 13.7 billion a year ago to USD 12.4 billion, and net earnings fell from USD 5.95 billion to USD 4.75 billion but Rio's total sales fell by more, and iron ore's revenue share actually rose, from 43.5% to 44.6%. The division swamped Rio's other divisions for earnings, contributing almost 81% of the total.

Iron ore prices fell from around USD 170 a tonne to USD 134 a tonne during the year but Rio is still selling ore for about USD 80 a tonne more than it is spending to mine it from its Pilbara open cut in north western Australia primarily.

It produced 120 million tonnes of iron ore in the June half alone and aims to get to 353 million tonnes a year by 2015 and its plans are underpinned by the dual port and rail network it created 12 years ago with its USD 3.5 billion takeover of North Limited.

BHP Billiton has one port, at Port Hedland. It aims to boost production from about 155 million tonnes this year to 220 million tonnes by 2016, and to 240 million tonnes a year after it eliminates bottlenecks, but that is Port Hedland's current capacity limit and USD 20 billion plan to construct an outer harbor is under review, and likely to be deferred in response to softer demand and weaker prices.

Weaker prices were also behind a halving of the earnings of Rio's copper division to USD 731 million in the 6 months to June but the big hole in the result was the aluminium division that Rio bulked up 5 years ago with its USD 38 billion acquisition of Alcan. It earned a paltry USD 24 million down from USD 344 million a year earlier.

Aluminium is a chronic problem. Rio has sold assets and cut costs, has more assets up for sale and booked a USD8.9 billion write down on the business last February. Its crucial assumption when it bought Alcan that prices would rise over time has not been borne out as Chinese smelting capacity expands and even after the February write down it has almost USD 27 billion invested in a division that is earning next to nothing.

Source - SMH.com

voda 13 augustus 2012 16:26

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Rio Tinto seeks power deal revision

According to the Meridian Energy, Rio Tinto's Pacific Aluminium unit wants to vary the terms of its electricity supply contract for the aluminium smelter at Bluff.

Meridian said that discussions are ongoing and remain confidential. The terms of the power supply contract for the Bluff smelter were renegotiated in 2007 with the new 18 year agreement to begin in January next year.

The smelter, operated by New Zealand Aluminium Smelters, is Meridian's biggest single customer. In its H1 accounts, Meridian described the contract as a pricing agreement rather than a supply agreement".

The negotiations come as Rio Tinto looks to sell the Tiwai Point smelter along with 12 other aluminium producing assets in Australia.

Source - Nzherald.co.nz

voda 13 augustus 2012 16:29

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Too much iron ore in Rio Tinto's soul - Analysts

What should a mining company do when one commodity's price fall drives a 22% drop in its first half earnings?

Rio Tinto's answer is to keep plowing money into iron ore, the metal which now contributes 80% of its net profit. Rio is planning a major expansion of its iron ore operations in Australia, tying up most of its capital spending in the next three years. But with signs emerging of slowing Chinese steel demand, investors are entitled to wonder whether Rio has the right idea.

Deutsche Bank estimates that if iron ore prices stay high, Rio should keep generating a decent return on investment, thanks to its low cost operations. The miner is spending AUD 16.9 billion to increase output at its key Pilbara mines by 60% to 353 million tonnes per annum from 2015. Assuming iron ore prices, currently around AUD 115 per tonne, stay above AUD 80 after 2018, the Pilbara expansion could generate a 24.8% internal rate of return, well above Rio's 9% cost of capital.

The risk is that iron ore demand falls lower and more quickly than expected. Chinese steel production is key. Rio reckons it could rise towards 1 billion tonnes a year by 2020 as compared with around 700 million tonnes last year.

But China has arguably gone through its most rapid phase of investment growth, with steel consumption around 8% of GDP each year since 2004. Japan's consumption, for example, is now around 2% of GDP: Replicated in China, that could mean steel demand dropping to 480 tonnes per year in 2020, Citi estimates just five years after Rio's Pilbara expansion comes on stream.

Citi estimates that Rio's near term iron ore exposure is clear, too. Every 10% fall in its price causes its earnings to fall by AUD 1 billion, it estimates. Its free cash flow would be just 40% of its expected dividend in 2013 if prices fall to AUD 80 per tonne in 2013. With investors still wary of Rio after its misguided 2008 investment in Alcan, its stock trades at a 19% discount to its more diversified peers based on expected 2013 earnings.

Only with less iron in Rio's diet will that gap narrow.

Source - The Australian

AEX 947,06 0,00 0,00% 18 feb


Germany40^	22.878,00	+0,15%
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Gold spot	2.933,16	-0,07%
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ADYEN NV	0,00%

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