Mon, Mar. 30, 10:27 AM
- Rio Tinto (RIO +0.4%) CEO Sam Walsh says the company's earlier proposal to Mongolia's government to restart the long-delayed Oyu Tolgoi copper mine was its "best and final offer."
- Rio submitted the proposals to resolve outstanding issues such as a $127M tax claim that already has been cut to $30M as well as the approval of a $4B project financing package to pay for construction of phase two, which will extend the mine underground.
- Walsh also says financing for the second phase of the project will have to be renegotiated, especially in light of volatile copper prices; he does not state a specific timeframe for when phase two could begin operations, saying Rio would first have to finalize negotiations with the government and also remobilize its workforce.
- Rio's Turquoise Hill Resources (NYSE:TRQ) owns 66% of the $6.5B Oyu Tolgoi, with the Mongolian government holding the rest.
Thu, Mar. 26, 3:34 PM
- Rio Tinto (RIO -1.2%) CEO Sam Walsh rejects as “hare brained” a request by a rival miner for the industry to stop the slide in iron ore prices by collectively capping output.
- Mining execs say any attempt to agree a cap on production would leave companies exposed to lawsuits and fines for anti-competitive pricing in multiple jurisdictions, as well as complaints and potential litigation from customers.
- The arguments show the extent to which miners have been hurt by the drop in prices, although the largest producers such as BHP, Vale (NYSE:VALE) and Rio, continue to insist they can withstand the slump.
- Andrew Forrest, CEO of Fortescue Metals (OTCPK:FSUMF) - the world's no. 4 iron ore supplier which earlier this month pulled out of a proposed debt refinancing because of unfavorable market conditions - suggested this week that a production cap by the big iron ore miners would help prices.
Wed, Mar. 25, 8:58 AM
- Turquoise Hill Resources (NYSE:TRQ) +5.5% premarket after reporting in-line Q4 earnings, a big revenue increase and a strong production outlook.
- Mongolia's Oyu Tolgoi, TRQ's principal mineral resource property, produced 589K oz. of gold in concentrates and 148.4K metric tons of copper in 2014, compared to 157K oz. of gold in concentrates and 76.7K metric tons of copper in 2013.
- Based on the current mine schedule, TRQ expects Oyu Tolgoi to produce 600K-700K oz. of gold in concentrates and 175K-195K metric tons of copper during 2015, and expects production from the high-grade core of the southwest zone to resume in mid-2015.
- Rio Tinto (NYSE:RIO), which owns 51% of TRQ, +1.8% premarket.
Thu, Mar. 19, 11:46 AM
- Western Australia Premier Colin Barnett calls out BHP Billiton (BHP -1%) and Rio Tinto (RIO -1.5%) on the company's decisions to run their iron ore mines in the state’s Pilbara region at full bore and depressing iron ore prices.
- "This has been one of the dumbest corporate plays I think I’ve ever seen,” Barnett says.
- The premier - essentially the two miners’ landlord - has been forced to scramble to deal with the hole in the state’s revenues by a collapse in the price of iron ore to a six-year low of ~$55/ton from $180 back in 2011.
Wed, Mar. 18, 2:57 PM
- Fortescue Metals (OTCPK:FSUMF -7.2%) earlier today pulled a proposed $2.5B debt sale, highlighting an iron ore market in deepening distress as prices closed at six-year lows.
- "Rather than lowering the interest cost, we understand the funding cost for the proposed $2.5B secured note was likely to be 8.5%-9%; hence why the offering was pulled," according to Citigroup analysts.
- Fortescue, the world's fourth largest iron ore miner, made the decision to pull the bond issue as iron ore prices fell by 5% to US$54.50/ton, driven down by a rapid expansion in supply by the miner as well as rivals BHP Billiton (BHP +1.2%), Rio Tinto (RIO -0.2%) and Vale (VALE -0.6%); stock prices had been much lower before today's Fed announcement.
- Analysts expect iron ore prices to fall even further as BHP and Rio press ahead with mine expansions in coming years and China’s economic growth slows.
- Also: CLF -3.9%.
Fri, Mar. 13, 11:59 AM
- Financial Times discusses an academic paper that focuses on Rio Tinto (RIO -3%), what it might do differently if it could start again with its $12.6B Oyu Tolgoi copper and gold mine in Mongolia, and why its agreement with the country's government has become such a source of tension.
- FT says the paper shows the importance of getting the investment agreement right and also getting cash to governments as soon as possible, and failure to address these issues results in disagreements, delays, and a heightened risk of "resource nationalism," which is as much of a problem for global developers as commodity prices or challenges at the mine itself.
- The paper says the investment agreement renders the Mongolian government’s 34% stake in Oyu Tolgoi close to worthless, and presumably explains why the government is to keen to swap its stake for higher revenues and why Rio is not interested.
Wed, Mar. 11, 12:41 PM
- Cliffs Natural Resources (CLF -7%) CEO Lourenco Goncalves says global iron ore miners should rethink plans to aggressively ramp up supply of the commodity, believing the consequences for Australia could be especially severe.
- Iron ore prices have been cut roughly in half to US$58/metric ton over the past year because of increased exports from Australia's Pilbara region, and Goncalves says a further fall to $30 could lead to "Australia going out of business as a country, because [iron ore] is the most important commodity."
- Low-cost Australian exporters BHP Billiton (BHP -1.1%) and Rio Tinto (RIO -0.6%) say that if they don't raise production then someone else will, but Goncalves calls the strategy "self-destruction."
Tue, Mar. 10, 3:45 PM
- Peabody Energy (BTU -5.6%) slides sharply after Jefferies downgrades shares to Hold from Buy with a $6 price target, cut from $10, on continued concerns about domestic thermal coal fundamentals due to low natural gas prices, weakening exports, MATS related coal plant closures and increased renewable capacity.
- BTU's Australian coal business is more likely to improve in the near-term due to higher seaborne thermal coal prices, the firm says, but operating costs have not declined nearly as much as competitors due to its extensive hedging program.
- Jefferies is bearish on mining shares in the near-term, and the firm revised many of its commodity price forecasts lower, but it has placed four metals and mining stocks above the rest: Freeport McMoRan (FCX -3.5%), Rio Tinto (RIO -2.6%), First Quantum (OTCPK:FQVLF -6.8%) and Angofagasta (OTCPK:ANFGY -5.8%).
Tue, Mar. 10, 11:59 AM
- Top execs at the world's two largest mining companies - BHP Billiton (BHP -3.7%) and Rio Tinto (RIO -2.3%) - say they believe China's hunger for iron ore is not ready to fade, even as the price hit new lows after the country lowered its economic growth forecast to ~7% for 2015 vs. 7.4% growth last year.
- BHP iron ore president Jimmy Wilson says iron ore demand from China's manufacturing sector had been running above BHP's expectations in recent months, echoing comments from Rio's iron ore chief Andrew Harding, who expressed optimism China's government can maneuver the economy into a new stage of growth.
- Harding says China's steel production only needs to rise 1%/year - in line with its estimated growth last year - for the country to reach 1B tons of crude steel output around 2030.
- Earlier: BHP's Wilson stands by iron ore expansion amid glut
Tue, Mar. 10, 8:28 AM
- BHP Billiton (NYSE:BHP) iron ore boss Jimmy Wilson is out in defense of the company's strategy of boosting iron ore output at a time of falling prices and global oversupply.
- "If we pull back our volume, that volume will be filled by other companies... We [would] be penalizing, in essence, our shareholders," Wilson argues, signaling no change of course from BHP even as prices drop.
- "The big guys are saying: ‘We’ve got huge margins, so we’ll keep pumping out iron ore because we’re still making money’,” says a top economist at Westpac Banking.
- Iron ore prices have cut in half over the past year as rising supply from new and expanded mines outpaces demand from steelmakers.
- Premarket: BHP -3%, VALE -2.7%, RIO -1.4%.
Mon, Mar. 9, 3:59 AM
- Just weeks after the group announced a 10% drop in annual earnings and just days after iron ore tumbled to a six-year low, Rio Tinto (NYSE:RIO) is bracing itself for one of its biggest internal restructurings since Sam Walsh took the helm at the mining group two years ago.
- Hundreds of more roles are to be cut as Walsh demands Rio be "more responsive" in keeping up returns to investors, while the company slashes $750M in costs this year.
- Rio’s workforce has already gone from 71K at the end of 2012 (just before Walsh became CEO), to below 60K at the end of last year.
- Previously: Rio Tinto to condense corporate structure in cost cutting move (Feb. 27 2015)
Fri, Mar. 6, 8:25 AM
- Iron ore tumbles to a six-year low after China lowered its economic forecast, renewing concerns about its appetite for the steel-making material at a time when supplies are already outpacing demand.
- Steel demand growth in China - which buys three in every five tons of iron ore traded by sea - last year already was at its slowest in more than a decade.
- Australian iron ore miners have been laying off workers and cutting costs as they cope with lower prices, but they are not expected to curb production, particularly as a weaker Australian dollar helps cushion them from the impact of falling prices.
- RIO -1.4%, BHP -0.6% premarket; also VALE -0.8%.
Thu, Mar. 5, 7:59 AM
- Rio Tinto (NYSE:RIO) clears a major hurdle in its bid to expand the Mount Thorley-Warkworth coal mine, one of Australia's largest, with state planning officials in New South Wales recommending approval of a controversial extension.
- Rio has spent more than five years chasing government approvals for a A$600M (US$468M) expansion of the open-cut mine, but has faced repeated legal challenges that said the development would threaten endangered ecological areas and harm nearby residents.
- The mine is part of the Mount Thorley Warkworth complex that consists of two adjacent open-cut pits, and Rio says the expansion is needed to keep the mine in operation.
- The planning commission's report will now be considered by the state government before consent for the project is given.
Wed, Mar. 4, 8:38 AM
- Rio Tinto (NYSE:RIO) says its majority-owned Bengalla coal mine in Australia has been cleared to boost output by a third and operate for another two decades.
- Rio subsidiary Coal & Allied and 40% partner Wesfarmers (OTCPK:WFAFF) have been seeking the clearance by the New South Wales state government to continue mining and potentially lift production of thermal coal to 15M metric tons/year from 10.7M.
Fri, Feb. 27, 8:14 AM
- Rio Tinto (NYSE:RIO) says it is restructuring its main product groups into four units, part of its strategy of cutting costs as commodity prices slump.
- Rio is folding its coal and uranium units into existing business divisions, eliminating the job of its energy chief and other corporate roles; it also plans to cut hundreds of jobs in its iron ore unit in the Pilbara region, which it will announce in the weeks ahead.
- Rio's two other divisions, aluminum and iron ore, will not be restructured.
Wed, Feb. 25, 2:45 AM
- Rio Tinto (NYSE:RIO) will not be taken over by rival Glencore (OTCPK:GLNCY) because there is no value in it for shareholders and regulators will never let it happen, announced Rio Tinto chief executive Sam Walsh.
- Rio snubbed a takeover approach from Glencore last August to create a $160B mining and trading giant, but Glencore never ruled out making a fresh attempt.
- Under U.K. rules, it could return with an offer from April onward.
- Previously: Glencore confirms it is no longer considering merger with Rio Tinto (Oct. 07 2014)
- Previously: Rio Tinto says it turned down Glencore merger idea in August (Oct. 06 2014)
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Rio Tinto PLC is an international mining group engaged in finding, mining and processing the Earth's mineral resources. Its main products are Bauxite, Alumina, Copper, Gold, Molybdenum, Silver, Nickel, Diamonds and Rutile.
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