http://uk.reuters.com/

PERTH, May 24 (Reuters) – Australian coal miners are steeling themselves for years of production cuts, job reductions and asset sales as swelling shipments from international rivals lower hopes of a recovery in prices for coal.

Prices have slumped around 30 percent since their peak two years ago as coal flooded global markets, especially from the United States where cheap gas has cut domestic demand and led to a nearly 50 percent jump in thermal coal exports last year. Even robust Chinese and Indian demand growth is failing to soak up the plentiful supply.

To boost their thinning margins, miners in Australia such as BHP Billiton, Rio Tinto, Glencore Xstrata and Peabody have trimmed output and laid off thousands. Clinging to barely profitable operations, coal producers now face the prospect of further cost-cutting, which they fear could benefit rivals when the market recovers.

“Everyone is waiting to see who blinks first,” said Tom Sartor, an analyst with Morgans Stockbroking in Brisbane. “You don’t want to be the one curtailing production knowing that it’s going to benefit your competitor.” Australia’s coal industry has become a victim of its own success. In its rush to meet growing Chinese demand, producers churned out more and more coal, and miners are now stuck with more than they can sell.

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http://www.telegraph.co.uk/

One of the richest people in the world is getting just that little bit richer.

Even before last week, Gina Rinehart was worth about $17bn (£11.2bn), according to the Forbes rich list, making the mining magnate Australia’s wealthiest person by a comfortable stretch.

That figure is about to swell a little more, however, after resource giant Rio Tinto was ordered to pay royalties expected to total about A$200m (£123m) to Mrs Rinehart and another mining family, following a dispute about a decades-old iron ore agreement.
After all, if there is one thing the tycoon has shown she knows how to do, it is how to make money from iron ore, used to make steel gobbled up by growing economies.

The 59-year-old inherited her business interests from her father, Lang Hancock, a mining pioneer in outback Western Australia, but has insisted she was left with debts and no “inherited money” when he died in 1992.

What is indisputable is that under her leadership Hancock Prospecting, of which she is chairman, has reaped billions from the country’s China-fuelled mining boom, directly driving her own personal wealth.

It is possible that she will become the world’s richest women, a title currently thought to be held by Liliane Bettencourt, the L’Oreal heiress worth $30bn – though calculations vary, and some sources have in the past already handed Rinehart that title. Read the rest of this entry »

http://in.reuters.com/

MELBOURNE, May 21 (Reuters) – A spate of profit warnings from Australian mining services firms suggests the country’s “once-in-a-century” resources spending boom may have peaked sooner than companies, economists and policymakers had expected.

Australia has been bracing for a slowdown in its massive pipeline of investment for resource projects – liquefied natural gas, iron ore and coal in particular – as developments come on stream and as signs of a slowdown in demand from top commodities consumer China weigh on prices.

“The extent of the slowdown and just how fast the turnaround has been is a surprise,” said Savanth Sebastian, an economist at Commsec, noting the potential for more projects to be pushed back or mothballed. “It seems to have taken place in a very narrow window.”

With miners from BHP Billiton Ltd down shelving projects and slashing costs that grew out of control during the boom, they have turned the screws on contractors, in some cases dumping firms that are unwilling to cut prices. “They got carried away using too many contractors to get that extra tonne, almost like a credit-card mentality,” Tony Maher, mining division president of the Construction, Forestry, Mining and Energy Union, told Reuters.

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

JULIA Gillard has dismissed claims by Gina Rinehart that Australia’s economy is heading for a collapse like those seen in European nations.

In a recorded video speech delivered at the Australian Mines and Metals Association conference in Melbourne today, Ms Rinehart warned that Australia had to take action to avoid following Europe into economic misery. “It is as if Spain, Greece, Britain, Italy and Portugal had no warnings to give us about the similar path we are now taking,” Australa’s richest person said.

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

BHP Billiton’s new chief executive Andrew Mackenzie has launched the world’s biggest resources group on a relentless productivity drive, aimed at improving shareholder returns against a backdrop of fading commodity prices.

Mr Mackenzie formally takes the reins at BHP today, with the Scottish polyglot and sometime saxophone player spending the day at BHP’s iron ore operations in the Pilbara.

He replaces the man who hand-picked him as a likely successor more than five years ago, the vegetarian Afrikaner Marius Kloppers, known as much for his safe hands during the global financial crisis as his idiosyncratic tendencies.

Speaking to The Australian before his first day as chief executive, Mr Mackenzie said there would be no big-bang change in BHP’s strategy. It would evolve over time under his leadership, but securing productivity improvements was the immediate focus, replacing the previous focus on production growth.

“Ultimately, we won’t be changing much of it at all. We will probably just be even more clear that our future prosperity is going to be based on a small number of world-class tier-one orebodies,” Mr Mackenzie said. “We are likely to invest less, and therefore the principal way we intend to grow the returns from our businesses is by driving productivity.” Read the rest of this entry »

http://in.reuters.com/

SYDNEY/MELBOURNE, May 7 (Reuters) – Rio Tinto, the world’s No.2 iron ore miner, is set to press on with plans to boost production at its Australian mines by a quarter by 2015, shrugging off pressure to slow spending and conserve cash as the commodity boom cools.

In spite of forecasts of a looming global supply glut, shareholders expect Chief Executive Sam Walsh to tell the firm’s annual general meeting in Sydney on Thursday that it’s full speed ahead with a 70 million tonnes-per-year increase that will take output to 360 million tonnes annually by 2015.

The plan means that a major additional chunk of iron ore production will enter the world market in the next few years and will add to concerns about increased supply that could weigh on a recovery in prices.

“They should continue to expand what is a high margin, high returning project, one of the best returning mining projects in the world, because growth now will mean yield in the future,” said Ben Lyons, who helps manage A$400 million ($409.42 million)at ATI Asset Management, which holds Rio shares.

Rio Tinto’s board is not expected to make a final decision on the expansion plans, estimated to cost up to $5 billion, until later this year. Read the rest of this entry »

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

An overvalued currency, lower commodity prices and cooling investment in the mining sector. These things are not just happening in Canada, they’re also dealing a blow to Australia, which surprised markets by cutting its key interest rate in an effort to bolster its economy.

The Reserve Bank of Australia cut its benchmark rate to a record low of 2.75 per cent Tuesday, citing rising unemployment, “below trend” economic growth and resource-sector investment that’s poised to cool. And it didn’t mince words about the Australian dollar, which it suggests is too strong. As its natural resource sector slows, the central bank is aiming to give a lift to consumer spending and factories.

Canada’s economy is often compared with Australia’s. Both countries are heavily reliant on commodity exports, have triple-A credit ratings and strong currencies. They have similar levels of wealth, as measured by GDP per capita, and relatively small populations spread over a huge land mass.

But though Australia’s rate cut will be closely watched by Canada’s incoming central bank governor, Stephen Poloz, that doesn’t mean this country’s monetary policy will follow suit. Read the rest of this entry »

http://in.reuters.com/

SYDNEY/MELBOURNE, May 7 (Reuters) - Rio Tinto, the world’s No.2 iron ore miner, is set to press on with plans to boost production at its Australian mines by a quarter by 2015, shrugging off pressure to slow spending and conserve cash as the commodity boom cools.

In spite of forecasts of a looming global supply glut, shareholders expect Chief Executive Sam Walsh to tell the firm’s annual general meeting in Sydney on Thursday that it’s full speed ahead with a 70 million tonnes-per-year increase that will take output to 360 million tonnes annually by 2015.

The plan means that a major additional chunk of iron ore production will enter the world market in the next few years and will add to concerns about increased supply that could weigh on a recovery in prices.

“They should continue to expand what is a high margin, high returning project, one of the best returning mining projects in the world, because growth now will mean yield in the future,” said Ben Lyons, who helps manage A$400 million ($409.42 million)at ATI Asset Management, which holds Rio shares.

Rio Tinto’s board is not expected to make a final decision on the expansion plans, estimated to cost up to $5 billion, until later this year. Read the rest of this entry »

http://www.reuters.com/

Billionaire Clive Palmer earmarks $1 bln to upgrade nickel refinery

SYDNEY, May 3 (Reuters) - Australian mining magnate Clive Palmer is joining Vale, Xstrata and other sector heavyweights pouring money into nickel despite a dire near-term outlook for demand, as they plough on with projects bought on the cheap or as part of corporate takeovers.

Hopeful that appetite will pick up as the global economy improves, they are reluctant to shed assets after investing billions. But that risks deepening a supply glut in the short term and piling more pressure on nickel prices, which have fallen around 13 percent so far this year and were the worst performer on the London Metal Exchange in 2012.

Palmer, a self-described eccentric who is building a replica of the Titanic, plans to spend a hefty $1 billion this year upgrading an ageing nickel refinery in Australia, battling to reduce production costs through steps such as revamping equipment and waste disposal operations.

“The $1 billion … will help make the refinery more efficient in a time of low nickel prices,” said Andrew Crook, a business adviser to Palmer. He declined to give details on operating costs as the Yabulu plant is privately owned. Xstrata Plc, Vale SA, First Quantum Minerals Ltd, China Metallurgical Corp, Sherritt International and Sumitomo Corp are among companies spending heavily to build new nickel mines and processing plants.

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http://uk.reuters.com/

(Reuters) – Six Greenpeace activists boarded a coal ship bound for South Korea near Australia’s Great Barrier Reef on Wednesday, protesting against the expansion of the rich Australian coal industry and its impact on the World Heritage site.

Environmentalists say the Great Barrier Reef, a popular tourist site worth about A$6 billion (4 billion pounds) a year to the Australia economy, is threatened by dredging, sedimentation and coal port and shipping development.

UNESCO will decide in June whether the reef should be listed as a World Heritage Site in danger. The ship MV Meister was carrying thermal coal from Abbot Point in northern Queensland state, a port that falls within the Great Barrier Reef heritage area, and was still in Australian waters in the Coral Sea when it was boarded en route to Donghae in South Korea.

“They have established a peaceful occupation of the ship,” said Georgina Woods, a climate campaigner on board Greenpeace’s flagship, the Rainbow Warrior.

Activists launched inflatable boats from the Rainbow Warrior and boarded the coal vessel early on Wednesday. A letter was handed to the captain of the ship detailing their reasons for the occupation. Read the rest of this entry »

http://in.reuters.com/

LAUNCESTON, Australia, April 23 (Reuters) – Asia’s coal markets are starting to resemble Waiting for Godot, Samuel Beckett’s absurdist play where the main characters wait in vain for something that doesn’t happen.

In coal’s case, the market is expecting demand, and by extension, prices, to drop amid anticipated slower economic growth in the region and rising electricity generation from alternative sources.

The problem is that so far coal imports by the big three Asian consumers, China, Japan and South Korea, are increasing, defying forecasts for the past several months of an imminent slowdown.

It’s not only that overall coal imports are gaining, it’s also that some suppliers are gaining market share, most oddly Australia, which is one of the highest-cost producers in the region. China’s coal imports jumped 20.2 percent in March from a year earlier to 20.52 million tonnes, and at 63.796 million tonnes are up 27.3 percent in the first quarter from the same period in 2012.

Japan’s imports were 15.821 million tonnes in March, an annual gain of 5.8 percent and the fiscal year that ended in March saw imports total 106.29 million tonnes, a record high and up 4.5 percent on the prior fiscal year. Read the rest of this entry »

http://www.dailytelegraph.com.au/

RIO Tinto has admitted it was a big mistake to purchase aluminium maker Alcan six years ago and as a result the company is now more likely to favour some commodities over others.

Addressing his first annual general meeting, chief executive Sam Walsh said Rio was focused on raising funds by selling assets in 2013.

“We are targeting significant cash proceeds from divestments and are reviewing a number of potential non-core assets for divestment, in addition to those we’ve already announced, such as Pacific Aluminium and Diamonds,” Mr Walsh told shareholders in London.

Rio in February announced its first ever full-year net loss of almost $US3 billion ($2.9 billion). Since then the world’s second-largest iron ore producer has been slashing jobs to cut costs. Mr Walsh said Rio had also bolstered investment committee controls and procedures.

“This will ensure … that we invest only in projects that deliver returns well above our cost of capital,” the chief executive said. He said 2012′s capital expenditure of $US17.4 billion “will be our peak year of investment”.

Rio acquired Alcan in mid-2007. Chairman Jan du Plessis said in hindsight the transaction was “badly timed at the top of the market”. Read the rest of this entry »

http://au.news.yahoo.com/thewest/business/

Russian mining giant Norilsk Nickel has taken another hit to its Australian assets, announcing further writedowns as it prepares to close its remaining WA mine.

According to an abbreviated set of 2012 financial accounts released by Norilsk late on Friday, the world’s biggest nickel producer has written down the value of its Australian and Botswana mining assets by $US278 million ($264.7 million). The company did not apportion the writedowns.

It spent $7 billion expanding in WA nickel at the height of the mining boom in 2007 and is understood to have now written off the vast bulk of the assets it acquired.

The carrying value of its non-current assets in Australia was put at $US511 million at the end of 2011. That figure is understood to have fallen to about $US350 million by the end of last year.

Media reports in Botswana indicate Norilsk may also be preparing to close its nickel mines there, after senior management decided to mothball its Lake Johnston project, north-east of Kalgoorlie, late last month. Read the rest of this entry »

http://www.news.com.au/

AUSTRALIANS could be sitting on a $300 billion sovereign wealth fund to rival the oil-rich nation of Kuwait if we had banked the budget windfall of the now deflating mining boom.

Instead, exclusive modelling for News Limited reveals successive federal governments have squandered the lot – and then some – in tax cuts, handouts and stimulus spending.

Most economists are tipping Labor’s fifth budget will reveal a budget still deep in deficit – by as much as $10 billion in 2013-14 – as revenues continue to disappoint.

This is despite the mining boom delivering a $290 billion boost to the budget bottom line between 2003/4 to 2016/17, according to modelling by Canberra-based forecasting group Macroeconomics.

The figure represents the difference between actual revenues and the revenues that would have been raised if there had been no commodity price boom. Read the rest of this entry »

http://www.miningweekly.com/page/home

PERTH (miningweekly.com) – Swiss-listed Xstrata’s nickel division has started production at its Koniambo project, in New Caledonia.

The diversified miner said on Friday that the start of production marked a key milestone for the $5-billion greenfield project, which has been under construction for the past six years and has been a flagship component of Xstrata’s organic growth programme.

“We are on track to deliver the full production rate of 60 000 t/y by the end of 2014 as scheduled, while maintaining excellence in terms of environmental and safety performance at this world-class industrial complex,” said Xstrata Nickel CEO Ian Pearce.

“All components of the mining and smelting process have now been successfully tested, leading to production of metal from Line 1. The production of first nickel metal at Koniambo after six years of complex design and construction is a huge achievement and a source of great pride for all of our employees,” he added.

At the height of its construction, more than 6 000 people were employed in building the project and its associated infrastructure.

First metal production signaled the start of Koniambo as a multi-decade, tier-one asset with long-term cash costs at the bottom of the second quartile, said Pearc. Read the rest of this entry »