Eurobench.com

voda 14 augustus 2012 16:40

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Rio Tinto Alcan offers easier licensing deals

Reuters reported that Rio Tinto Alcan has offered more flexible licensing terms for rivals to end an antitrust investigation and avert a possible fine.

The European Commission said that it had been investigating the issue following a 2008 merger which created Rio Tinto Alcan, a unit of Anglo Australian mining company Rio Tinto.

The EU antitrust watchdog said it was concerned Rio Tinto Alcan's practice of contractually tying the licences of its AP aluminium smelting technology to the purchase of aluminium smelter equipment supplied by a subsidiary may have breached EU rules. AP aluminium smelting technology reduces energy consumption in aluminium production.

The Commission said that to address these concerns, Rio Tinto Alcan offered to modify its AP technology transfer agreements so as to enable the licensees of the AP aluminium smelting technology to choose any supplier who’s PTAs meet certain technical specifications. A market test would show whether rivals and other interested parties feel the proposal is sufficient.

It said that if the market test confirms that the proposed commitments remedy the competition concerns, the Commission may make the commitments legally binding on Rio Tinto Alcan. The EU executive can fine companies up to 10% of their global turnover if they are found guilty of violating EU rules.

Source - Reuters

voda 17 augustus 2012 15:13

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Rio Tinto Oyu Tolgoi project 94pct complete

Rio Tinto PLC's RIO 4.43% massive Oyu Tolgoi copper and gold project in Mongolia is nearing completion and remains on track for commercial production next year with the cost for the Phase I of development expected to come in as expected at USD 6.2 billion.

The mining company's Turquoise Hill Resources Limited subsidiary said that additional diesel powered electrical generating capacity has been installed at the South Gobi Desert site to meet power needs during construction and electrical transmission lines running from neighboring China are in place but it is still waiting for a supply agreement to be signed between the two countries before power can be imported.

Canada's Turquoise Hill, formerly known as Ivanhoe Mines Limited in its Q2 earnings statement said the first phase of construction of the project was 94% complete at the end of July. Initial output of copper and gold concentrate is set to begin before the end of this year and commercial production is expected in the H1 of 2013.

Transmission lines in both Mongolia and China have been tested with full power loads and are ready for commissioning and the venture is pushing on with arrangements to ensure power from China is available in the second half of the year. Commercial discussions on a power deal between the countries continue. If negotiations aren't successful a dedicated power plant would be required which would set back the start of commercial output.

Rio Tinto is managing the development of Oyu Tolgoi and owns a 51% stake in Turquoise Hill, which in turn holds a 66% stake in the project to the Mongolian government's 34% interest. Oyu Tolgoi, Mongolian words that in English mean turquoise hill is one of the world's largest undeveloped copper and gold assets with a measured and indicated resource estimated at 41 billion pounds of copper and 21 million ounces of the precious metal.

Turquoise Hill said that it swung to a net loss of USD 285.9 million in the three months through June from a profit of about USD 0.6 million a year earlier including USD 168.7 million in financing costs, USD 8.7 million in foreign exchange losses plus other expenses. Revenue for the period fell to USD 28.2 million from USD 47.3 million.

Source - Market Watch.com

voda 17 augustus 2012 15:19

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Downsizing deals - BHP warns of job cuts at coal mines in Australia

Reuters reported that BHP Billiton has warned that jobs could go at its Australian coal mines as the company faces a deteriorating market, the latest sign of global miners scaling back operations due to slowing industrial activity in China.

BHP, responding to a question about reports of job losses at its coal mines, said in an emailed statement “Against a backdrop of increasing costs and falling commodity prices, we continue to focus on reducing our overheads and operating costs. We don't intend to provide any detail about specific adjustments, but clearly there may be some impact on jobs in some areas.”

In a 50-50 partnership with Japan's Mitsubishi, BHP operates a half-dozen coal mines in Queensland's Bowen Basin, yielding mostly metallurgical coal used in steel making. At peak output, they can supply up to a fifth of the world's traded coal. BHP employs about 10,000 at its Queensland coal mines run with Mitsubishi, including 3,500 unionised staff already engaged in an 18th month dispute over conditions and job protection.

The prospect of job cuts raises doubts about the strength of Australia's mining boom, which has hinged on China importing hundreds of millions of tonnes of iron ore, coal, copper and other minerals year-in and year-out for most of the past decade.

Source - Reuters

voda 27 augustus 2012 16:43

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Rio Tinto upbeat on copper amid end of boom fears

Reuters reported that the positive long term outlook for copper remains intact. Debate over whether the decade long bull run in commodities has ended has ramped up in recent days as China heads for the slowest pace of annual growth in more than a decade, driving down the prices of copper, iron ore and other raw materials.

Rio's larger rival, BHP Billiton earlier shelved tens of billions of dollars in expansion plans due to soaring development costs, a high Australian dollar and an uncertain outlook, prompting Australia's resources minister to say the boom was over.

Mr Andrew Harding head of Rio Tinto said that "The long term copper outlook remains positive. At Rio's 55,000 tonnes per year Northparkes copper mine in western New South Wales. Global growth in supply of copper is still challenged. People are still struggling to meet their production targets."

Mr Harding said that while Chinese copper demand faced a slowdown, the longer term was brighter and he had no doubt Beijing's efforts to stimulate the Chinese economy would succeed. There is no doubt we are going to see an interruption in the near term but I've got complete confidence the long term is still completely intact. The reality is we have long term increasing demand driven by the people in China and by a lesser degree but ultimately more importantly, by India."

Rio is forecasting production of 580,000 tonnes of mined copper and 300,000 tonnes of refined copper in 2012. Global demand for copper is expected to outstrip supply this year, despite China's slowing economic growth due to mine disruptions and a lack of new major copper projects.

According to analysts, BHP's decision to shelve the USD 20 billion expansion of its Olympic Dam project, the fourth largest known copper deposit in the world, will also tighten global supply from late 2013. The project in South Australia would have accounted for around 4% of global copper needs at its expanded peak.

Mr Harding declined to comment directly on the impact of BHP's decision, but acknowledged that it would affect prices if the market had been factoring in the lift in production. No one can really predict what the price is going to be.

BHP postponed the expansion following a fall off in benchmark international copper prices this year since reaching a peak of about USD 8,760 per tonne in February. Prices have rallied in recent days, though remain well of their best this year. The benchmark three month contract at the London Metal Exchange stood at USD 7,620 per tonne.

Source - Reuters

voda 27 augustus 2012 16:44

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BHP Billiton costs up but Escondida projects Andean exploration advance

Global resources giant BHP Billiton's company wide controllable cash costs rose an average 6% in the 2012 financial year ended June 30, reducing underlying Ebit by USD 2 billion.

Mr Graham Kerr CFO of BHP Billiton said that the company's base metals business showed the third highest FY 2012 cash cost escalation after metallurgical coal and aluminum.

Base metals saw a USD 841 million impact on Ebit on general cost pressure such as from labor and inputs, combined with labor disruptions and lower ore grades at the 57.5% controlled Escondida copper mine in Chile. The mine also suffered from wet weather during the period.

Mr Kerr said that the company is looking to get a handle on controllable costs by getting the base metals Escondida in particular and metallurgical coal units back to their steady state and fully recovered from recent challenges.

All BHP Billiton's major organic growth projects underway worth USD 22.8 billion in approved capital are due to see first output by 2015 and will continue despite the company's review of its capital expenditure program and the suspension of the massive Olympic Dam expansion in Australia.

Mr Marius Kloppers CEO of BHP Billiton said that "Our committed capital expenditure program continues, largely on low risk high return brownfield projects that will by and large deliver production by the end of the 2015 calendar year."

Mr Kloppers said that the company has suspended its US$30bn expansion at the Olympic Dam copper and uranium mine and plans to apply new technologies to rework the project economics, but is not expecting to approve the expansion during FY2013. BHP Billiton is also unlikely to approve any additional projects over the next 12 months.

He said that "I would be very surprised if there were a very material investment that could be triggered in the next 12 months, even if conditions are very benign or we get a surge to the upside."

The Escondida mine is on its way to a 50% copper production increase to 1.3 million tonne per year in the 2015 fiscal year. The USD 319 million Ore Access project which involved relocating certain infrastructure to access higher grades was completed in June underpinning a targeted 20% production increase in FY2013.

Next in line is the Laguna Seca debottlenecking project which will add 15,000 tonne per day of throughput capacity, followed by the USD 3.8 billion Organic Growth Project 1 which involves adding a new concentrator and will add another 32,000 tonne per day in the H1 of the 2015 calendar year, taking throughput capacity 277,000 tonne per day on 100% basis.

Meanwhile, BHP Billiton has budgeted USD 1.5 billion for exploration this fiscal year, compared to USD 2.1 billion last year. Some USD 750 million will go to conventional oil exploration, while US$750mn will pay for minerals exploration.

Mr Kloppers said that "Approximately USD 200 million is on pure Greenfield exploration activity and almost all of that is going into copper exploration and almost all of that is going into the Andean region."

Source - Business News Americas

voda 27 augustus 2012 16:45

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BHPB commodities outlook

Prices for many of BHP Billiton’s products declined during the 2012 financial year as global economic growth slowed and concerns surrounding the economic outlook increased. The impact was compounded by improved supply for some commodities.

In the short term, we expect volatility in commodity markets to persist as temporary weakness in the manufacturing and construction sectors across all key markets is expected to weigh on market sentiment. However, in the medium term we expect supportive economic policy and a broad growth bias, particularly in China, to lead to measured improvement in the external environment beginning in the first half of the 2013 financial year.

Growth in fixed asset investment in China over this timeframe is expected to support demand for the steel making raw materials and iron ore prices specifically. In the longer-term, however, the strong financial returns that are being generated by the low-cost iron ore producers will continue to encourage investment in brownfield capacity. The development of this low-cost supply should, in our view, lead to a flattening of the cost curve and the gradual mean reversion of prices, consistent with the backwardated nature of the iron ore forward curve.

The long-term dynamics for copper are particularly positive. Structural operating and capital cost pressure associated with rising strip ratios and declining ore grades suggests that a relatively steep copper cost curve should be maintained. Furthermore, the need to attract substantial new capacity into the market every year, if supply is to keep pace with demand, should provide long-term support for the copper price.

Geopolitical concerns and macroeconomic sentiment continued to influence the energy complex and crude oil pricing in particular. In the United States, the combination of an unusually warm winter and strong supply growth had a detrimental impact on the Henry Hub natural gas price in the second half of the 2012 financial year. This rapid decline in price resulted in a very significant switch from coal to gas fired electricity generation while on the supply side, there was a marked decrease in the level of drilling activity in the dry gas basins. As the market continues to rebalance, we believe that the Henry Hub gas price will adjust to reflect the economics of incremental investment which should, in our view, support higher prices in the longer-term.

In summary, the global macroeconomic environment is expected to stabilise before improving in the first half of the 2013 financial year. This recovery will provide support for commodity demand and pricing in the short to medium term. For specific commodities, the industry will find it difficult to develop new supply quickly enough to satisfy the expected increase in demand. This is particularly the case for industries where barriers to entry are high (eg potash) or where the global resource endowment is in decline (eg copper). We believe that our strategy of being a low cost, upstream, diversified natural resources company will provide more opportunities to create long-term shareholder value as commodity demand patterns evolve with economic development.

Source - BHPB

voda 27 augustus 2012 16:45

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BHPB investing in high return growth

With 20 major projects currently in execution with a combined budget of USD 22.8 billion, BHP Billiton is largely committed for the 2013 financial year. No major project approvals are expected over this timeframe. The majority of the Group’s high quality projects in execution are scheduled to deliver first production before the end of the 2015 financial year. These low risk, largely brownfield projects will underpin the strong near-term momentum that has been established in our major businesses and create substantial value for our shareholders.

BHP Billiton has an unrivalled portfolio of development options beyond those projects in execution and a significant number of these are embedded within our existing footprint. As our current expenditure commitments decline, future capital will be allocated to those options that maximise shareholder value, while also considering the balance between short and long-term returns.

Our proven strategy delivers sector leading shareholder returns. The Group’s long stated priorities for capital management remain unchanged: firstly, to invest in high return growth opportunities throughout the economic cycle; secondly, to maintain a solid A credit rating and to grow our progressive dividend; and finally, to return excess capital to shareholders.

The disciplined application of these priorities within the framework of our strategy has not only facilitated strong growth in the business but has also enabled the Company to return USD 53.8 billion to shareholders in the form of dividends and share buy-backs over the last 10 years.

The total dividend declared for the 2012 financial year increased by 11 per cent to 112 US cents per share. The increase in the final dividend to 57 US cents per share takes the compound annual growth rate of our progressive dividend to 26 per cent over that same 10 year period.

Source - BHPB

voda 28 augustus 2012 17:27

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BHPB to hike output and spending despite slump in profit

AFP reported that mining giant BHP Billiton has aimed to increase production and hike spending despite a 35% slump in yearly profit, citing attractive opportunities despite cooling in key market China.

The world's biggest miner also reiterated its commitment to the huge Olympic Dam copper and uranium project, delayed last week after it declared its first profit drop in three years, saying it would one day be a very major mine.

BHP chief Mr Marius Kloppers said the firm hoped to spend AUD 22 billion on projects in 2012, up from AUD 20 billion in 2011, playing down the decision to scrap the Olympic Dam expansion in favor of a cheaper option.

Mr Kloppers said that "The combination of high exchange rate, high cost and high energy costs which we've got in Australia at the moment is a pretty unique set of circumstances. If you can get any of those variables to change plus we can make some technological breakthroughs then we still think this is a wonderful ore body which is going to be a very major mine in due course. I would not be satisfied entirely if we didn't manage to grow volumes by about 10% or so over each of the next two years."

Declaring a drop in annual profit to AUD 15.42 billion amid plunging commodity prices, BHP warned last week there would be no major project approvals over the next 12 months and the viability of more costly parts of its business was under review.

But Mr Kloppers said that in reality what we are talking about is just slowing the rate of capex growth going forward, as he hailed China’s prospects after Australia's resources minister declared the commodities boom over.

Source - Agence France Presse

voda 28 augustus 2012 17:29

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BHPB looks at wider horizons as iron ore fades - CEO

Commodity divisions such as potash, petroleum and copper appear set to benefit from BHP Billiton's fading love affair with iron ore.

While BHP plans to continue expanding its exports of iron ore, CEO Mr Marius Kloppers indicated that other divisions were becoming more attractive places to send the investment dollar. He said that ''We have a broad direction, in that we would like potash, oil and gas and copper to achieve more prominence in the portfolio.'

In a thinly veiled swipe at rivals such as Rio Tinto, which collects close to 80% of its profits from iron ore, Brazilian company Vale and Fortescue Metals Group, Mr Kloppers said BHP did not want to be an iron ore only company.

He said that "We want to be a diversified company. On balance, that means that we do not want to plough every single cent that iron ore generates, and more, back into iron ore at the moment. We would like to put some of it into oil and gas; we would like to put some of it into copper and we would like to put some of it into potash."

While iron ore has been the darling of this first phase in Chinese urbanization, BHP believes the next phase will see Chinese consumers demand Western standards of energy and food security.

Mr Kloppers said that "By our estimation, food will be a material issue for the world over the next decades and potash is our way to play into supplying the world with food."

Source - Brisbane Times

voda 28 augustus 2012 17:30

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Rio Tinto stands by plans to expand Pilbara iron - Mr Albanese

Mining industry leaders warned that Chinese demand for iron ore may remain flat for at least another six months, but they dismissed suggestions that the resources boom had ended.

As the spot price of iron ore fell to USD 104 a tonne, its lowest level since 2009, Rio Tinto CEO Mr Tom Albanese told a resources conference that the miner was pushing ahead with plans to expand its Pilbara iron ore production to 353 million tonnes, and said he expected a pick up in Chinese demand by early 2013.

However, Mr Albanese said that "We definitely see a soft demand period."

His comments were backed by Fortescue Metals Group chairman Mr Andrew Forrest, who said demand for Australia's most valuable export commodity was being weakened by the leadership transition occurring within China's Communist Party, but that iron ore prices would rebound as Beijing enacted measures to stimulate the economy.

Mr Forrest said that he believed the Chinese economy would pick up in the last quarter of 2012 or first quarter of 2013.

Earlier, Fortescue CEO Mr Nev Power told a result briefing he expected the iron ore price to return to the range between USD 120 and USD 150 in the short to medium term.

Mr Power also rejected claims by Resources Minister Mr Martin Ferguson that the mining boom had ended, saying the recent fall in commodity prices from record highs was expected and the boom wasn't over by any show of imagination.

Chevron Australia MD Mr Roy Kryzwosinski told the conference that Australia's LNG sector was at a crossroads due to cost increases, poor productivity and problems with industrial relations.

Mr Kryzwosinski said Australia had about AUD 180 billion of committed LNG projects and another AUD 100 billion worth of projects that could be enabled with strong policy that promoted investment.

He warned that if this did not occur, investment would start to dry up.

Source - The Australian

voda 29 augustus 2012 16:53

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BHP Billiton to sell Yeelirrie uranium project to Cameco

RTT News reported that BHP Billiton Limited has agreed to sell its Yeelirrie uranium project in Western Australia to Canada based uranium producer Cameco Corporation for USD 430 million.

The transaction is expected to close by the end of 2012 subject to approval from the government of Western Australia and the Australian Foreign Investment Review Board.

Yeelirrie, one of Australia's largest undeveloped uranium deposits, is located 630 kilometers north east of Perth in the Northern Goldfields region of Western Australia. The project is also located about 750 kilometers south of Cameco's Kintyre exploration project. Uranium was discovered at the Yeelirrie site in 1972 by Western Mining Corporation which was acquired by BHP Billiton in 2005.

Mr Dean Dalla Valle president of BHP Billiton Uranium said that "Cameco is one of the world's largest publicly listed uranium producers and is highly respected in the industry. We believe they are well placed to carry this project forward in a responsible manner."

Cameco said that upon closing of the deal, it will be required to pay stamp tax duty of about USD 22 million to the government of Western Australia. In late November 2011, Cameco backed out of its hostile CAD 625 million takeover bid for smaller peer Hathor Exploration Limited paving the way for Rio Tinto plc to proceed with its planned takeover of Hathor for CAD 654 million.

BHP Billiton said that it has scrapped USD 30 billion expansion plan of Australia's largest uranium deposit Olympic Dam, citing current market conditions including subdued commodity prices and higher capital costs. As a result of the decision it will incur impairment and other charges of USD 346 million before tax in the 2012 financial year.

Source - Reuters

voda 29 augustus 2012 16:57

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BHPB and FMG allocated additional berths at Port Hedland

AAP reported that BHP Billiton and Fortescue Metals Group have been allocated additional berths at Port Hedland to ship iron ore.

The decision by the Port Hedland Port Authority comes a week after BHP shelved its AUD 18.2 billion Port Hedland outer harbor expansion project in Western Australia.

WA Transport Minister Mr Troy Buswell confirmed BHP would now be able to develop two extra berths and Fortescue would be able to develop one additional berth to export iron ore.

He also confirmed North West Infrastructure members Atlas Iron and Brockman Resources would be able to develop two berths that had been flagged earlier.

Mr Buswell said the arrangements did not involve a change in the export capacity allocations for any port user but that it was a step towards realizing the port's target throughput capacity of 495 million tonnes per annum.

BHP Billiton president of Iron Ore Mr Jimmy Wilson said preliminary studies showed the potential to ship substantially more than the company's 240 million tonnes per annum from the inner harbor.

Fortescue CEO Mr Nev Power said the decision would lead to the more efficient use of the inner harbor capacity by providing the port authority with greater flexibility to improve the movement of ships.

Source - AAP

voda 3 september 2012 16:49

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BHPB update for iron ore production

BHP Billiton’s commitment to invest throughout the economic cycle delivered a twelfth consecutive annual production record in iron ore. WAIO 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. Samarco’s (Brazil) three pellet plants continued to operate at capacity during the period.

Underlying EBIT for the 2012 financial year increased by USD 873 million to a record USD 14.2 billion. Outstanding financial performance was underpinned by record production at WAIO which increased Underlying EBIT by USD 2.4 billion. This was partially offset by a seven per cent and five per cent decline in fines and lump prices, respectively, which reduced Underlying EBIT by USD 1.3 billion, net of price-linked costs. While the acquisition of the HWE Mining subsidiaries in September 2012 eliminated third party contractor margin, one-off integration costs and an increase in exploration expense more than offset the cost savings achieved in the period.

WAIO production is forecast to increase by approximately five per cent in the 2013 financial year. Commissioning of the WAIO Port Hedland Inner Harbour Expansion project remains on schedule for the second half of the 2012 calendar year and is expected to increase our inner harbour capacity to 220 million tonnes per annum (100 per cent basis). Subsequent debottlenecking opportunities that will enable us to maximise our capacity in the inner harbour continue to be assessed.

Source - BHPB

voda 3 september 2012 16:50

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Monadelphous wins AUD 75 million contract from BHPB

Perth engineering firm Monadelphous Group has won a AUD 75 million construction contract at BHP Billiton's Jimblebar iron ore mine.

Monadelphous said that the contract involved structural, mechanical and piping works at the mine, which is near Newman.

Mr Rob Velletri MD in a statement said that "We are pleased to have been selected as a contractor and we look forward to delivering results at Jimblebar for this valued customer.”

Work on the project is scheduled to commence in September.

Source - The West

voda 4 september 2012 16:37

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Rio shares hit 3 year low on iron ore prices

Mining giant Rio Tinto Ltd's stock has fallen to a three year low as the iron ore price continues to decline on the back of China's slowing economy.

Rio's stock had lost 3.78% USD 48.63 against a benchmark index fall of 0.93% after the iron ore price on The Steel Index hit a fresh two and a half year low at USD 90.30 per tonne.

The Australian Financial Review said Steel mills were continuing to purchase only as much as they need to maintain minimal blast furnace production from nearby stockpiles.

Falling commodity prices have sparked renewed concerns that Australia’s terms of trade could actually stop growing in the remainder of 2012, putting pressure on budget forecasts and the expected tax take.

Macquarie analyst Graeme Train said the price could fall as low as USD 80 a tonne if Chinese steel mills continued to reduce their stock and steel demand and pricing remained weak.

Source - Business Spectator

voda 11 september 2012 16:59

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BHPB BMA to cease production at Gregory open cut operation

BHP Billiton Mitsubishi Alliance announced that it would cease production at its Gregory open cut mine, which is part of the Gregory Crinum complex near Emerald from October 10th 2012.

The decision follows a continuing operational review of the Gregory Crinum operations, which determined that the Gregory open cut mine production was no longer profitable in the current economic environment of falling prices, high costs and a strong Australian dollar.

Mr Stephen Dumble president of BMA Asset said that production costs for the open cut Gregory mine currently exceed the revenue from product sales, and therefore the only option available to the company was to cease production.

He added that "The Crinum underground mine will continue to operate along with the Gregory Coal Handling Preparation Plant. The remaining operations will be made more competitive by the removal of the high cost Gregory production. We understand that this decision will have an impact on our employees, their families and the Emerald community. We will work closely with our workforce and look for opportunities to redeploy affected employees to other BMA operations. We will also work with community stakeholders throughout the process."

The continuing operational review will identify additional measures to further reduce operating costs, making remaining underground production more profitable.

BMA will also continue to review its remaining portfolio of assets to ensure that each operation can be cost competitive and profitable across the price cycle.

Source - BHP Billiton Mitsubishi Alliance

voda 11 september 2012 16:59

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BHPB sees rebound in iron ore prices - JPMorgan

JPMorgan Chase, citing a meeting with the biggest mining company's executives, said that BHP Billiton expected iron ore prices to recover as high cost producers in China stop production.

JPMorgan analysts including Mr Lyndon Fagan, citing comments made by BHP CEO Mr Marius Kloppers at a meeting with analysts in Sydney, wrote in a report that as much as 140 million tonnes of annual Chinese capacity is unprofitable at current iron ore prices.

Mr Fagan said that steel mills might start placing purchase orders as they begin to restock iron ore over the next eight to 12 weeks.

Chinese Premier Mr Wen Jiabao is overseeing a USD 23 billion investment in new mills to stimulate vehicle making and housing to reignite growth that fell in the second quarter to the slowest in three years.

According to the median of seven analysts estimates, the spot price of iron ore may gain as much as 67% to average USD 145 a tonne in the fourth quarter.

Iron ore for immediate delivery to the Chinese port of Tianjin has dropped 52% over the past year to a three year low of USD 86.90 a tonne.

Mr Neville Power CEO of Australia's third largest iron ore producer Fortescue Metals Group said a week ago that the price might rebound to USD 120 a tonne later this year.

JPMorgan said that coking coal prices might not gain as producers respond more swiftly than BHP had anticipated. The coking coal market will continue to expand until 2025 or 2030 before it stagnates.

Source - Bloomberg

voda 11 september 2012 17:01

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BHP Billiton and Xstrata coal job cuts typical - CFMEU

The CFMEU has attacked BHP Billiton and Xstrata for plans to sack 900 staff, saying workers were paying for management's mistakes.

Construction, Forestry, Mining and Energy Union general secretary (mining) Mr Andrew Vickers said that neither of the mining giants had consulted workers or the union before announcing their plans on Monday.

He said that companies had been conned into thinking Chinese double-digit economic growth would go on indefinitely and expanded the coal industry too rapidly.

He told AAP that “This is an absolutely typical reaction from coal mining companies, when either the price cycle or demand cycle comes off the boil.”

“They sack our people, our members. Get rid of jobs that's their answer to every problem. These blokes are paid millions of dollars each year to make these big decisions, they make them and we clean up the mess and they leave at the end of it.”

Nearly 300 coal miners have lost their jobs after BHP Billiton announced it would stop production at its Queensland Gregory open-cut mine.

Xstrata Coal will cut 600 jobs in response to falling coal prices and the high Australian dollar.

Source - www.skynews.com.au

voda 11 september 2012 17:04

0

Rio Tinto completes acquisition of Richards Bay Minerals

Rio Tinto has doubled its holding in Richards Bay Minerals following the completion of its acquisition of BHP Billiton's entire interests. The purchase price paid by Rio Tinto on completion was USD 1.7 billion.

The acquisition price was USD 1.9 billion before contractual adjustments for cash payments made by RBM to BHP Billiton since the effective transaction date of 1 February 2012. This price includes USD 0.6 billion for BHP Billiton's 37% equity interest in RBM, USD 1.0 billion for a 50% interest in outstanding RBM shareholder financing arrangements, and USD 0.3 billion for a royalty stream.

The acquisition was triggered on February 1st 2012 by BHP Billiton exercising a put option agreed with Rio Tinto as part of RBM's restructuring in 2009. The price was determined through a previously agreed expert valuation process.

Mr Alan Davies Rio Tinto Diamonds & Minerals Chief executive said that "Doubling our stake in this tier one asset further strengthens Rio Tinto's titanium dioxide portfolio at a time when the long-term outlook remains robust. Demand for feedstocks is expected to grow strongly, needing the equivalent of a new operation the size of RBM to be built every two and a half years."

RBM is a South African mineral sands mining and processing operation located in Kwa-Zulu Natal. It is one of the world's lowest cost producers and has mineral resources to support 20 years of production. Rio Tinto manages the RBM business and markets all of its products.

Source - Rio Tinto

voda 11 september 2012 17:05

0

BHPB to cut Mn ore price for October shipments to China

According to a source in China, BHP Billiton indicated a price cut of USD 0.15 per mtu for its manganese ores shipped to China during October 2012.

The monthly price of the ores sold by BHP Billiton was raised 3 months in a row, i.e. for the shipments to China during May, June and July 2012, followed by rolled overs for August and September 2012. The price cut this time is probably intended for ore sales expansion, even if only a little, in China where the ferroalloy market situation has been long stagnated.

The new prices, for the shipments in October, are Gemco grade (Lumps, Mn: 46%): USD 5.20 per mtu, Metallurgical fines (Mn: 48%): USD 4.75 per mtu and South African low grade (Mn: 38% - 40%): USD 4.70 per mtu.

Already, a South African company, UMK (United Manganese of Kalahari) and CML (Consolidated Minerals Limited, an Australian company) both raised their ore prices earlier in August 2012, for shipments during October 2012, i.e. a cut by USD 0.15 per mtu by UMK and by USD 0.05 per mtu by CML, followed by this cut of BHP Billiton.

The quayside stocks of the ore at major ports in China are said to have declined to 2.388 million tons as of August 31st 2012 in a declining trend since early July at 2.70 million tonnes and 2.60 million tonnes mid August 2012. The sharp drop of the stocks is thought to be the result of importers' hold off in the continued ferroalloy market slump.

Source - TEX Report Limited

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