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voda 23 januari 2013 17:11

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BHP Billiton production report for half year ended Dec 2012

Highlights

1. The release of latent capacity at a number of our highest margin businesses and strong growth across our broader portfolio is expected to deliver a compound annual growth rate of 10% in copper equivalent terms over the two years to the end of the 2014 financial year.

2. Western Australia Iron Ore (WAIO) delivered a twelfth consecutive December half year production and sales record. First ore was received by the fifth car dumper, which is the last major piece of infrastructure required to increase WAIO port capacity to 220 million tonnes per annum (100% basis). WAIO production guidance remains unchanged with a 5% increase anticipated in the 2013 financial year.

3. Petroleum production of 121 million barrels of oil equivalent during the December 2012 half year underpins full year guidance, which remains unchanged at 240 million barrels of oil equivalent.

4. Copper in concentrate production at Escondida increased by 70% in the December 2012 half year when compared with the prior corresponding period. Total Escondida copper production is on track to increase by 20% in the 2013 financial year.

5. At the end of the December 2012 quarter, Queensland Coal production was approaching full supply chain capacity. The associated increase in productivity, broader economies of scale and the closure of high cost capacity is expected to deliver a substantial reduction in unit costs in the second half of the 2013 financial year.

Source - BHPB

voda 24 januari 2013 17:24

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BHPB iron ore production update

BHPB announced that Western Australia Iron Ore delivered a twelfth consecutive December half year production and sales record as the business continued to benefit from the Company’s decade long investment in supply chain capacity. Our Pilbara operations achieved another significant milestone during the December 2012 quarter with first ore received by the recently installed fifth car dumper at Finucane Island. This car dumper is the last major piece of infrastructure required to increase WAIO port capacity from the December 2012 quarter run rate of 188 million tonnes per annum to 220 million tonnes per annum.

The Jimblebar Mine Expansion, which is on schedule for first production in the March 2014 quarter, will broadly match mine and port capacity at this expanded rate, while the progressive debottlenecking of the supply chain is expected to underpin substantial low cost, longer term growth in our WAIO business.

The strong outlook for our WAIO business is underpinned by an anticipated five per cent increase in production in the 2013 financial year, for unchanged guidance of 183 million tonnes (100 per cent basis).

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

Source - BHPB

voda 24 januari 2013 17:27

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Union takes Rio to court for discrimination

Rio Tinto is facing a legal challenge over claims it discriminated between union and non union miners by giving workers on individual contracts up to USD 120,000 more in redundancy payments when it shut down a coal mine in central Queensland last year.

The dispute marks the latest installment in a long-running effort by Rio Tinto to curb the influence of unions across its workforce.

The Construction Forestry, Mining and Energy Union has accused the mining giant of discriminating between union and non union members as it was preparing to close the Blair Athol coal mine last November. In a statement of claim filed in the New South Wales Federal Court the CFMEU claims Rio Tinto breached four sections of the Fair Work act by discriminating against members of an industrial association.

The union is seeking penalties against the mining giant and compensation for 29 members made redundant when the Queensland coal mine closed. It also wants any penalties imposed on Rio to be paid to the CFMEU. The matter is due to be heard in March before Justice Geoffrey Flick.

Mr Alex Bukarica, the CFMEU’s national legal officer said that ‘‘Rio have attempted to penalise those workers that chose to remain on a collective agreement.’’.

He said that “Although redundancy payments were in accordance with the collective agreement, Rio Tinto discriminated against one group of employees.”

A spokesman for Rio Tinto said employees at Blair Athol chose to work under the collective agreement or on individual arrangements.

He said that “Employees who chose to be on the collective agreement benefited from a number of secure working conditions and benefits over many years. Redundancy payments were made in accordance with the employee’s conditions of employment, which Rio Tinto believes was fair.’’

Rio Tinto decided in 2005 to close the 30 year old Blair Athol coal mine because it was reaching the end of its planned life. Coal for the site was becoming more costly to mine just as global prices for thermal coal were falling. The site employed between 140 and 170 people.

Union members received redundancy entitlements based on their base salary plus a market allowance, the statement of claim said.

But employees on individual contracts received entitlements based on their actual remuneration which includes overtime rostering allowances and superannuation plus an extra 3 months salary. The difference in payout is believed to be between USD 40,000 and USD 120,000 depending on the salary and years of service.

Rio Tinto and the CFMEU have been fighting over wages and conditions at the Blair Athol mine for years and union members went on strike for 36 hours to protest the different redundancy payments shortly before the mine closed. The legal action started in late December 2012.

However the shutdown of the Blair Athol mine coincided with Rio Tinto’s Australian boss Mr David Peever calling for further reforms of Australia’s industrial relations laws to keep unions out of its workplace in a speech last November.

He said that ‘‘Direct engagement between companies and employees, flexibility and the need for improved productivity has to be at the heart of the system.”

‘‘Only then can productivity and innovation be liberated from the shop floor up and without the competing agenda of a third party constantly seeking to extend its reach into areas best left to management.’’

Source - The Age

voda 24 januari 2013 18:17

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BHPB Aluminium and Nickel production update

Alumina, Strong performance at Worsley contributed to record alumina production in the December 2012 quarter and half year. Worsley operated at 95% of design capacity during the December 2012 quarter following the successful ramp up of the Efficiency and Growth project.

Aluminium, Metal production increased by 10% from the September 2012 quarter as Hillside production returned to full technical capacity ahead of schedule.

Nickel, Nickel production declined by 6% from the September 2012 quarter as strong operating performance at Cerro Matoso was more than offset by planned maintenance at the Nickel West Kalgoorlie smelter and Kwinana refinery which was completed during the period.

From a broader perspective the strong Australian dollar and weak pricing environment continued to place pressure on the Group’s Australian alumina and nickel operations.

Source - BHPB

voda 24 januari 2013 18:18

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BHPB Diamonds and Specialty production update

BHP Billiton has agreed to sell its diamonds business, comprising its interests in the EKATI Diamond Mine and Diamonds Marketing operations to Harry Winston Diamond Mines Ltd for an aggregate cash consideration of USD 500 million.

The transactions are subject to regulatory approval and other customary conditions. Completion is expected in the first half of calendar year 2013.

Source - BHPB

voda 25 januari 2013 16:50

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BHPB updates on base metals

BHPB announced that its Copper in concentrate production at Escondida increased by 70% in the December 2012 half year when compared with the prior corresponding period. Production benefited from the transition to higher grade ore feed and the successful completion of large scale maintenance programs that have increased concentrator throughput. The average copper grade mined during the December 2012 quarter increased to 1.39%. Total Escondida copper production is on track to increase by 20% in the 2013 financial year.

Record production at Antamina over the 6 month period also contributed to the 14% increase in total copper production for the December 2012 half year while a 26 % reduction in copper production at Olympic Dam reflected the impact of a planned smelter outage in the period. The Olympic Dam smelter is expected to return to full capacity during the March 2013 quarter.

At December 31st 2012 the Group had 311,847 tonne of outstanding copper sales that were revalued at a weighted average price of USD 3.59 per pound. The final price of these sales will be determined over the remainder of the 2013 financial year. In addition, 278,547 tonne of copper sales from the 2012 financial year were subject to a finalization adjustment in the current period.

The finalization adjustment and provisional pricing impact as at December 2012 will increase earnings before interest and tax by USD 48 million for the period. Lead, silver, Lead and silver production was lower than all comparable periods and reflected lower head grades at Cannington. Zinc Production was broadly in line with all comparable periods.

Uranium, Higher recoveries associated with improved plant availability at Olympic Dam led to an 8% increase in production in the December 2012 half year when compared with the prior corresponding period.

Source - BHPB

voda 25 januari 2013 16:51

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BHP to write down nickel and aluminium units - Analysts

Analysts expect BHP Billiton Limited to write down the value of its Australian aluminium and nickel assets by some USD 4 billion in February in response to the continued strength of the Australian dollar and weak aluminium prices which have undermined hopes for a short term recovery.

The miner's Australian aluminium and nickel assets are expected to register losses of about USD 600 million during this financial year.

In delivering a solid Q1 production report which showed strength in its major units of iron ore, coking coal, copper and petroleum BHP said that although its least profitable nickel and aluminium businesses posted strong production results their outlook has not improved.

The company said that the strong Australian dollar and weak pricing environment continued to place pressure on the group's Australian alumina and nickel operations.

Any move to write down the value of the two businesses would come when BHP reports its H1 results in February.

The prospect of BHP slashing its book values has received renewed attention in the past week, since rival miner Rio Tinto announced USD 14 billion in writedowns and the departure of chief executive Mr Tom Albanese and strategy boss Doug Ritchie.

Mr Tim Schroeders Pengana Capital fund manager said that “The aluminium and alumina performance probably isn't going to prevent a possible writedown. I don't think those assets are making any money.”

Source - Business Spectator.com

voda 25 januari 2013 17:02

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BHPB and Rio battle heats up

The battle of the Pilbara giants intensified January 23rd 2013 with BHP Billiton announcing that like its major competitor Rio Tinto it had set another production record and its expansion plans were on track.

In its quarterly production report released BHP said that its export capacity at Port Hedland was ready to hit 220 million tonne a year after the successful installation of a 5th car dumper at the port. Its ability to ship at those rates still awaits mine expansions, however particularly the Jimblebar expansion due for completion next year.

BHP announced its results as new global Rio Tinto chief executive Mr Sam Walsh indicated he would keep his foot on costs at Rio, issuing his first email to staff calling for greater accountability and responsibility.

He said that "Unlocking greater value for our shareholders and other stakeholders will mean we need to start to do some things differently but not lose sight of what we do well. This is about creating greater accountability and responsibility, we must treat the company's money like it is our own and act like owners of our businesses not managers."

BHP iron ore boss Mr Jimmy Wilson is still to find out who his new counterpart at Rio will be but like his former rival Mr Walsh, Mr Wilson's division also beat expectations. Boosted by the new kit at Port Hedland, BHP's iron ore exports from the Pilbara hit 39.4 million tonne in the December quarter up 6.7% from the previous 3 month period. Although Rio saw its Pilbara exports fall 1.2% to 49.7 million tonne last quarter it set an annual production record.

BHP said its predictions for a 5% growth in exports for 2012 to 13 were unchanged. Shares in the mining giant gained 1.3%, or 48Â¢ on the quarterly results which were marginally ahead of analysts expectations in most of its commodity groups.
For the first half of the financial year BHP's oil and gas production rose 4% compared to the same period the previous year due to growth in the United States thermal coal output lifted 7% with coking coal in line with the same period in the prior year although it improved significantly QoQ as a number of issues at its Australian mines were resolved. First half copper production lifted by 14%.

When it reports financials next month analysts expect BHP to mirror Rio in writing down the value of some assets particularly nickel and aluminium. Also awaited is some insight into the first impact of cost cutting measures at both companies as the pair try to slash billions from their operating budgets.

Source - The West

voda 25 januari 2013 17:04

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BHPB rating lowered to neutral

Citigroup downgraded shares of BHP Billiton from a buy rating to a neutral rating in a report issued on Wednesday January 23rd 2013.

Citigroup’s analyst said that “DQ12 production was in line with our estimates with iron ore,petroleum better and coal,copper weaker. Production guidance for oil, iron ore and copper reaffirmed but our FY13+ estimates have been downgraded on lower coal & nickel prices, plus a higher AUD. After the rally in the share price we downgrade our recommendation to Neutral with an unchanged AUD 36 per share target.”

A number of other firms have also recently commented on BHP. Analysts at Dahlman Rose downgraded shares of BHP Billiton from a buy rating to a hold rating in a research note to investors on Tuesday January 15th. They now have a USD 20.00 price target on the stock. Separately analysts at Macquarie downgraded shares of BHP Billiton from an outperform rating to a neutral rating in a research note to investors on Friday January 11th. Finally, analysts at Bank of America downgraded shares of BHP Billiton from a neutral rating to an underperform rating in a research note to investors on Thursday January 10th 2013.

8 equities research analysts have rated the stock with a buy rating 3 have given an overweight rating, 5 have issued a hold rating, and 1 has given an underweight rating to the company. The stock has an average rating of overweight and a consensus price target of USD 84.40.

Source - www.jagsreport.com

voda 25 januari 2013 17:06

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BHPB manganese production update

Manganese ore
BHPB announced that record ore production in the December 2012 half year reflected a substantial improvement in plant availability at GEMCO (Australia).

Manganese alloy
Alloy volumes increased by 18% from the September 2012 quarter as TEMCO (Australia) production returned to full capacity following the temporary suspension of operations that occurred during the 2012 financial year.

The decline in alloy production in the December 2012 half year when compared with the prior corresponding period reflected the permanent closure of energy intensive silicomanganese production at Metalloys (South Africa) in January 2012.

Source - BHPB

voda 28 januari 2013 16:53

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Rio Tinto defends two tiered redundancies

Resources giant Rio Tinto's decision to give non union coal miners tens of thousands more in redundancy payouts could have wider industry repercussions if a union's legal challenge succeeds.

Operations at the Blair Athol open cut mine near Clermont in central Queensland finished in November 2012 following a 28 year production run that saw coal shipped to Japan.

But workers on individual contracts were given much more generous payouts than those on collective agreements.

The Construction Forestry Mining and Energy Union has filed a claim in the Federal Court's NSW registry arguing the differing levels of redundancy pay discriminate against union members and are in breach of the Fair Work Act.

The union's Sydney based national legal director Mr Alex Bukarica said that the case could have wider consequences if the CFMEU has a win.

He said that "It will test whether a company can apply its own policy in a discriminatory way. If we're successful it will have ramifications if other companies are adopting the same practices."

Rio Tinto has argued its redundancy payout system is fair.

The CFMEU said that when 70 full time production and engineering staff were made redundant last year non union employees were given a redundancy payout based on their entire salary including compulsory overtime and bonuses.

They were also given an extra three months' pay as part of their redundancy.

Conversely, unionized staff were given redundancy payments based on their base salary only.

Mr Bukarica said that "They have treated them less favourably because they have chosen to bargain collectively."

He said that “For a retrenched worker on an average AUD 120,000 base salary that could mean the difference between a union member walking away with AUD 80,000 and an individual contract employee leaving with more than AUD 150,000.”

Rio Tinto has defended its practice of having a 2 tiered redundancy scheme arguing union members on collective agreements had benefitted from secure working conditions.

A company spokesman said that "Employees at Blair Athol Mine were able to choose whether they worked under the collective agreement or on individual arrangements. "Redundancy payments were made in accordance with the employee's conditions of employment which Rio Tinto believes was fair."

Source - www.watoday.com

voda 29 januari 2013 16:21

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Anglo American stelt massale ontslagronde uit

Gepubliceerd op 29 jan 2013 om 10:38 | Views: 539

LONDEN (AFN/DPA) - De massale ontslagronde die medio januari werd aangekondigd bij de grootste platinaproducent ter wereld Amplats wordt opgeschoven. Dat maakte de mijnbouwer, onderdeel van Anglo American, dinsdag bekend. Er worden opnieuw 60 dagen ingelast om met de vakbonden en overheid te onderhandelen over de plannen om 14.000 werknemers te ontslaan.

De ontslagen, ongeveer een kwart van het totale aantal arbeidsplaatsen, waren noodzakelijk omdat onder meer stakingen het bedrijf grote verliezen hebben opgeleverd in 2012. Mijnwerkers staakten ruim 2 maanden lang, wat de winning van pure platina met 9500 kilo terugbracht. Dat negatieve gevolg van de werkonderbrekingen werd nog versterkt door de stijgende kosten voor de mijnbouwer.

Eerder op dinsdag kondigde Anglo American aan dat het een aantal fikse tegenvallers heeft moeten incasseren bij de ontwikkeling van een ijzerertsmijn in Brazilië. De Britse onderneming moest daarom in de boekhouding over het laatste kwartaal van 2012 een afwaardering van 4 miljard dollar (bijna 3 miljard euro) opnemen.

Het bedrijf heeft de ontwikkelingskosten voor het mijnbouwproject, dat in november 2012 werd aangekondigd, te laag ingeschat. Bovendien komt de productie veel later op gang dan gepland. De eerste verschepingen van ijzererts zijn nu pas eind 2014 voorzien, in plaats van eind 2013.

voda 30 januari 2013 17:25

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Anglo American confirms Minas-Rio CAPEX and records USD 4 billion impairment

Anglo American plc has completed the detailed cost and schedule review of its Minas Rio iron ore project in Brazil announced in November 2012.

The review included third party input and examined the outstanding capital expenditure requirements in light of current development progress and the disruptive challenges faced by the project. The review included a detailed re evaluation of all aspects of the outstanding schedule with a focus on maximising value and mitigating risk.

Following its November 2012 guidance and the completion of the review capital expenditure for the Minas Rio project is projected to increase to USD 8.8 billion if a centrally held risk contingency of USD 600 million is utilised in full. On the basis of the revised capital expenditure requirements and its assessment of the full potential of phase one of the project Anglo American will record an impairment charge of USD 4.0 billion at December 31st 2012 on a post tax basis. Despite the challenges the Minas Rio project has faced Anglo American is targeting first ore on ship by the end of 2014.

Ms Cynthia Carroll, Chief Executive of Anglo American said that "We are clearly disappointed that the diversity of challenges that our Minas Rio project has faced has contributed to a significant increase in capital expenditure leading to the impairment we have recorded. Despite the difficulties we continue to be confident of the medium and long term attractiveness and strategic positioning of Minas Rio and we remain committed to the project.”

She said that "Minas Rio is a world class iron ore project of rare magnitude and quality and represents one of the world's largest undeveloped resources. The published resource has increased more than fourfold since acquisition to 5.77 billion tonne and we believe that further resource potential exists through our ongoing exploration. The first phase of the project will begin its ramp up at the end of 2014 with operating costs expected to be highly competitive in the first quartile of the FOB cash cost curve averaging approximately USD 30 per tonne over the life of mine and generating significant free cashflow."

Anglo American announced in December 2012 that all three injunctions that had disrupted the project in 2012, contributing to the delay of FOOS to the end of 2014, had been lifted. Construction progress is on track with the revised construction schedule announced in July 2012.

The mine and beneficiation plant are on track 92% of the earthworks have been completed at the beneficiation plant the first of 2 grinding mills has been installed and the civil works for the secondary crusher are complete. At the 525 km slurry pipeline almost 50% of the pipeline has been laid with 76% of the land cleared for earthworks and pipe installation to take place. The filtration plant is on schedule for completion by June 2013. The port's 2 stackers and reclaimer have been erected and the shiploader installation is under way.

The primary drivers of the capital expenditure increase from the previous estimate in 2011 relate to:

The delivery of the project on the proposed schedule and to the revised budget is dependent upon a number of development milestones being achieved over the next 12 months and other factors including:

1. The schedule for the completion of the transmission line to the beneficiation plant and the development of the pipeline assumes that a number of residual land access constraints be resolved by the end of March 2013.

2. At the mine site pre-stripping activity needs to begin in April. Prior to that further work is required in order to address matters relating to caves in the mine area.

3. At the beneficiation plant the tailings dam needs to be completed by the end of May in order to be filled during the forthcoming rainy season.

4. Not encountering unexpected interventions such as injunctions relating to licences.

The project team continues to work towards satisfying the licence conditions and associated programmes in order to secure the necessary operating licences in 2014.

Source -Anglo American

voda 31 januari 2013 17:06

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Vale pledges to deliver growth after losing title to Rio Tinto

Bloomberg reported that Vale SA pledged to deliver on its growth projects after losing to Rio Tinto Group the title of the world’s second largest mining company and failing to boost production of the steelmaking ingredient.

Vale is confident it can deliver on its expansion plans and that will eventually be reflected in its share price, Chief Financial Officer Mr Luciano Siani said that investors January 29th at an event in Rio de Janeiro where the company is based. He said that “Doubts may still remain among investors about Vale’s capacity to fulfill its promises.”

Mr Siani said that “Why Rio Tinto has today a higher market value than Vale if its iron ore production is much lower? Because Rio Tinto has delivered iron ore growth and we haven’t. Vale has an incredible latent value and its management is absolutely committed to deliver and reveal that value.”

Vale the world’s largest iron ore producer in October was surpassed by London based Rio Tinto which is currently valued USD 5.6 billion more than its rival according to data compiled by Bloomberg. The Brazilian company is cutting investments seeking partners and writing off nickel and aluminum assets after shares slumped to the lowest in almost three years in September amid weaker demand from China and Europe.

Vale is targeting 306 million metric tonne of iron ore output this year down 1.9% from an expected 312 million tonne in 2012, it said December 3rd 2012. The company produced 322.6 million tonne in 2011. Rio Tinto boosted its iron ore production 4% to 253 million tonne last year it said January 15th 2013.

He said that ”From the moment that what we are showing here becomes reality we think there is potential for the future growth of Vale to be more evident on its share price.”

Vale Investor Relations Director Mr Roberto Castello Branco said that “Iron ore prices are supported by prospects of China growing as much as seven percent per year preventing a 2012 like slump. Vale is optimistic about prices as China steel stockpiles recover amid increasing spending on infrastructure and construction.”

Vale gained 1.2% to BRL 38.13 in Sao Paulo trading January 29th 2013 the biggest increase since January 2nd. The stock lost 8.4% in the past 12 months underperforming Rio Tinto’s 5.9% decline in London.

BHP Billiton Ltd is the world’s largest mining company.

Source - Bloomberg

voda 1 februari 2013 17:04

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BHPB updates on copper production

Copper - Production increased by 2% to 172,900 tonnes. Production from Los Bronces increased by 31% mainly due to the ramped up Los Bronces expansion project. The expansion contributed an additional 35,100 tonnes in the quarter and 177,100 tonnes for the full year. This was partially offset by lower ore grades.

Collahuasi’s production decreased by 36%, due to planned lower ore grades and lower mill throughput and recoveries. Ball Mill No. 3, which was shut down for repair in April 2012, was recommissioned in November 2012 and is operating at capacity.

As previously announced, a shareholder led team performed a detailed diagnostic review during the H2 of 2012 and a business improvement plan is being implemented. Early indications from the actions taken are positive and have resulted in a 17% increase in production compared to Q3 2012.

As at the end of 2012, Anglo American had 117,900 tonnes of copper provisionally priced at 359 c per lb. Provisional pricing of copper sales resulted in a positive operating profit adjustment of USD 47 million for 2012, versus a negative operating profit adjustment of USD 278 million in the prior year.

Source - BHPB

voda 3 februari 2013 16:18

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Cyclone Oswald hit alumina output - Rio Tinto

Rio Tinto was producing alumina in Australia's Queensland state at lower rates following heavy rains and flooding caused by ex tropical cyclone Oswald.

Rio said production was temporarily suspended at its Yarwun alumina refinery due to record rainfall around the Gladstone facility, one of the largest owned by the company's Alcan unit. Rio is in the process of expanding annual production capacity at Yarwun to 3.4 million tonnes of alumina by the end of September.

Rio also said the Queensland Alumina Limited refinery at Gladstone was operating at reduced rates following the storm. Rio owns 80% of the refinery with the remaining interest held by United Company Rusal PLC.

Source - Marketwatch.com

voda 5 februari 2013 16:44

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Rio Tinto gets nod for Nammuldi expansion

The world's second largest iron ore miner Rio Tinto's USD 3 billion expansion of a Pilbara mine has been approved by the State Government.

WA Premier Mr Colin Barnett said that “More than 1500 construction jobs would be created nearly tripling iron ore operations at the Nammuldi mine and building a new 130 megawatt power station at nearby Cape Lambert from where the ore will be shipped. There would be ongoing employment for more than 700 people.”

The expansion would see iron ore mined below the water table and production increased from eight to 23 million tonne a year. Surplus water extracted from the mine would be used for hay production providing stock feed.

The power station will provide extra power to meet port needs.

Rio has invested about USD 20 billion over the next 5 years to increase production in two stages from a current capacity of 230 million tonne a year to 290 million tonne in 2013 and to 360 million tonne by 2015.

According to the government iron ore production contributed USD 61 billion to the WA economy in 2011 to 12 including more than USD 3.8 billion in royalty payments to the state government. Rio shares were up 68 cents or 1.01% to USD 67.88.

Source - www thewest.com

voda 6 februari 2013 17:07

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BHP Billiton and Rio Tinto set to post big profit falls

The Australian reported that BHP Billiton and Rio Tinto are set to reveal that profits have slumped in their latest reporting periods, explaining why both the miners have made cost cutting their No 1 aim in 2013.

Rio leads the way on February 14 with its annual profit report. A 41% plunge from USD 15.5 billion in 2011 to USD 9.1 billion is the market's expectation.

BHP follows up with its interim profit report on February 20, with the market expecting 43% slump from USD 9.9 billion in the 2011 December half to USD 5.6 billion. While the profit reports cover different reporting periods, the scale of the profit retreats USD 6.4 billion for Rio and USD 4.3 billion for BHP explain their newfound focus on cost cutting and capital expenditure restraint.

Investor hopes for improved dividend payments have been dashed, as has any hope the Gillard government's mining tax will pull in any meaningful amount in the short term.

The slump in iron ore prices that began in September last year and has now partly reversed and the broad retreat in most other commodity prices from previous boom levels more than offset production gains made by the companies in their respective reporting periods.

JPMorgan estimates BHP will come in with USD 5.7 billion interim profit, slightly higher than the consensus. It expects BHP to detail operating cost cuts made in the December half but does not expect chief executive Mr Marius Kloppers to set a target on future cost reductions. An impairment charge on the loss making aluminium division is a possibility and there is likely to be only an incremental increase in the previous interim dividend of US55c a share.

The broker is slightly below consensus with its estimate that Rio's 2012 annual profit will be USD 9 billion. The February 14 profit briefing will be the first for the new chief executive Sam Walsh following the abrupt departure of former chief Tom Albanese after USD 3 billion writedown on Rio's Mozambique coal acquisition.

JPMorgan said that we don't expect Walsh to outline a major change in company direction. However, capital discipline will be front of mind following USD 35 billion of impairments over the past 6 years. The bulk of those impairments have been in the loss-making aluminium division which was enlarged with the Alcan acquisition in 2007 early in Mr Albanese's watch.

Rio said that it is planning to reduce operating costs by USD 5 billion over 2 years but has yet to elaborate. Like BHP, no new capital expenditure commitments or merger and acquisition activity is expected in 2013 from Rio.

JPMorgan said that following several years of pushing the growth message to investors and boasting about large capex budgets, BHP and Rio have moved to a more conservative stance.

The broker said that the message to the market is now about capital discipline, taking costs out and lowering gearing. We believe this is likely to lead to an ongoing improvement in investor sentiment towards the large miners, supporting a re rating of the sector throughout the year.

Source - The Australian

voda 7 februari 2013 16:44

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Rio Tinto Alcan gives 12 month notice to its power supplier

Courier Press reported that following the lead of Century Aluminum at Hawesville, Ky, the Rio Tinto Alcan aluminum smelter at Sebree, Ky has notified its electric suppliers it intends to shut down in 12 months.

Rio Tinto Alcan said that it uses 325 MW of electricity each day enough to power a city the size of New Orleans to produce 425 million pounds of aluminum annually.

Mr Henderson County Judge Executive Hugh McCormick said that “It would just have a devastating impact on Western Kentucky. The trickle down effect on how many jobs are created by Rio Tinto is unreal.”

The aluminum smelters in Sebree and Hawesville are the two biggest customers of Kenergy Corporation one of three rural electric cooperatives whose power is produced by Big Rivers Electric Corporation.

Mr Mr Greg Starheim president & CEO of Kenergy said the smelters account for probably 80% to 90% of the electricity it delivers. Providing a legal termination notice is very black and white. They have their senior executives saying they’re going to shut the plant.

Mr Andrew Melnykovych spokesman for the Kentucky Public Service Commission said that Big Rivers is also heavily dependent on the smelters; they consume 70% of the electricity it produces. This is something that is really unique to Big Rivers.

Big Rivers and Kenergy have a lot to lose but so do the approximately 112,000 other customers in the Big Rivers system, because they’ll be on the line for millions of dollars of fixed costs if the smelters shut down or begin buying their electricity on the open market.

To some extent, the notice filed Thursday is an outgrowth of the complicated USD 1.1 billion transaction commonly called the unwind that was finalized in 2009 after more than 6 years of negotiating. Under that agreement Big Rivers took back control of four power plants and got a large infusion of cash so that E ON US could get out from under a money losing lease agreement 16 years early.

The deal gave the smelters what were then below market electric prices, but it required them to provide a year’s notice if they decided to stop buying power from Big Rivers and Kenergy.

Mr Kenny Barkley spokesman of Rio Tinto Alcan said that Big Rivers is currently seeking a rate increase based on the possible loss of the Hawesville smelter as a customer. The Sebree smelter is currently paying about USD 50 per MW hour now and the proposed increase would jump that to USD 60.

Source - Courierpress.com

voda 7 februari 2013 16:45

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Rio extends gas deadline for Gove Alumina refinery

The Australian reported that mining giant Rio Tinto has extended its deadline for the Northern Territory government to find a supply of gas to power the company's loss making aluminium refinery in Arnhem Land, the NT's largest private enterprise.

Mr Terry Mills Chief Minister will now make a last minute dash to Europe in a bid to stop the miner closing the refinery on the Gove Peninsula with the loss of 1000 direct jobs.

Mr Mills continued to hold out against Rio's demands the government unconditionally give up almost half its remaining contracted gas supply from a field east of Darwin to power the mining giant's plant. He declared to do so could expose taxpayers to 75% utility price hikes in the future.

Mr Mills said that this government is doing all it can to secure the Northern Territory's electricity supply and find the additional gas needed to reach an agreement. An aggregated gas supply must be found. But I cannot and will not risk taking actions that result in upward pressure on Territory power prices.

Rio's refinery and bauxite mine at Gove, which supports the East Arnhem region and nearby town of Nhulunbuy is believed to be losing about USD 30 million per month. The company had issued an effective ultimatum that if the NT government did not agree to release about 10 years worth of gas supply by the end of last month the refinery would almost certainly close.

It is understood Rio's new chief executive Mr Sam Walsh has extended that deadline by about 10 days. Closure of the refinery is predicted to halve the size of Nhulunbuy, which is home to about 4000 people and the NT's fourth-largest settlement.

Mr Klaus Helms chairman of East Arnhem Regional Futures Alliance said that if that happened the region's economy would wither. There's no other business or industry in the whole region, so what's going to happen to those people?

Source - The Australian

AEX 946,61 +0,03 +0,00% 14 feb


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