Archive | Rio Tinto

Rio cuts copper output target after problems at giant mines – by Neil Hume (Financial Times – April 20, 2017)

Rio Tinto has cut production guidance for copper by 12 per cent following problems at two giant mines where it is involved in joint ventures, and reported lower than expected output from its flagship iron ore business because of bad weather.

The Anglo Australian mining group had previously predicted it would mine between 525,000 and 665,000 tonnes of copper this year.

But in a trading update late on Wednesday, Rio said it now thinks it will produce between 500,000 and 550,000 tonnes because of supply disruptions at the world’s two biggest copper mines — Escondida in Chile and Grasberg in Indonesia. Continue Reading →

BHP Billiton, Rio Tinto at risk in Donald Trump’s steel crackdown – by John Kehoe (Australian Financil Review – April 21, 2017)

Australian iron ore producers BHP Billiton and Rio Tinto are at risk of becoming collateral damage in US President Donald Trump’s move to stamp out the “dumping” of cheap steel by foreign producers such as China.

President Trump ordered the Commerce Secretary to prioritise an investigation into whether steel imports into the US “threaten to impair national security”, by drawing on an obscure provision in a 1962 trade law.

The move opens up a path for the Trump administration to potentially impose tariffs on subsidised steel from a broad range of countries that Australia exports the steel-making ingredient iron ore to. Continue Reading →

Big miners have trouble joining technology revolution – by Barbara Lewis and Zandi Shabalala (Reuters U.S. – April 6, 2017)

SANTIAGO/LONDON – Mining companies chasing the kind of technological breakthroughs made long ago in the manufacture of cars and mobile phones have unveiled eye-catching innovations ranging from vast drills and remote-controlled trucks to second-by-second data analysis.

Behind the scenes, however, there has so far been limited progress towards a transformation the companies say is more and more vital to their survival. They are being jolted into action by volatile commodity prices and the increasing difficulty and danger of accessing remaining reserves in hot, narrow seams several kilometers below ground.

“There’a a big awakening in mining. The time is ripe for things to begin to change,” Anglo American’s head of technology development Donovan Waller said by telephone. A major obstacle is the massive upfront cost for innovation that firms such as Anglo, BHP Billiton and Rio Tinto <RIO.AX must pay off over the life of a mine in contrast to incremental upgrades common to mobile phones. Continue Reading →

Rio Tinto Sees Bumpy Ride for Aluminum as China Poses Puzzle by Joe Deaux and Danielle Bochove (Bloomberg News – April 3, 2017)

Rio Tinto Group’s aluminum boss sees prices for the lightweight metal heading for an “extremely” volatile period, with uncertainty over when China will curb production helping to keep investors on edge.

“That’s really where the uncertainty is at the moment,” Alfredo Barrios said in an interview at Bloomberg’s Toronto office. “There’s no doubt that if you look at the supply side, if you look at the environmental issues, sooner or later that will change. But when is a question mark.”

China has ordered curbs on steel and aluminum output in as many as 28 northern cities during the winter heating season as it steps up its fight against pollution, people with knowledge of the matter said early in March. Continue Reading →

Rio Tinto boss unfazed by concerns about Chinese economy – by Henry Sanderson and Neil Hume (Financial Times – March 28, 2017)

The head of Rio Tinto, one of the world’s biggest mining companies, said he had no concerns about China’s economy, predicting restructuring of the country’s state-owned enterprises would lead to demand for the iron ore it produces in Australia.

Jean-Sébastien Jacques told the FT Commodities Global Summit in Lausanne that China’s crackdown on polluting steel furnaces would lead to greater demand for higher-quality raw material iron ore, a key ingredient in steelmaking. China’s state council has set out plans to eliminate 100m-150m tonnes of steel capacity as it tries to shift to a more consumption and services-oriented economic model.

Officials are planning a new crackdown on steel production in the key north-eastern city of Tangshan in an attempt to prevent false reporting of mill closures by local governments reluctant to obey shutdown orders, according to an official order seen by the FT this week. Continue Reading →

Iron Ore Takes a Battering as Bear Market Engulfs China Futures – by Ranjeetha Pakiam (Bloomberg News – March 22, 2017)

Iron ore is getting battered. After rounds of warnings that this year’s rally may be overdone, the raw material is in retreat as doubts gather about the strength of demand in China as steel sells off and record port stockpiles put a spotlight on rising supplies.

In China, futures on the Dalian Commodity Exchange sank into a bear market as steel in Shanghai posted the longest run of declines this year, while the SGX AsiaClear contract in Singapore fell for a fourth day. Benchmark spot prices from Metal Bulletin Ltd. extended a loss below $90 a dry metric ton to the lowest since Feb. 9.

“Steel demand in China is clearly robust, but iron ore prices remain very elevated versus fundamentals, and it’s only a matter of time before they normalize to below $60,” Ian Roper, an analyst at Macquarie Group Ltd., said in an email. “We’ve had a negative view on prices for a while but they’ve held up longer than we expected.” Continue Reading →

CNBC Transcript: Jean-Sebastien Jacques, CEO, Rio Tinto (March 19, 2017)

Following is the transcript of a CNBC interview with Jean-Sebastien Jacques, CEO, Rio Tinto. The interview was broadcast on CNBC on 20 March 2017. All references must be sourced to a “CNBC Interview”. Interviewed by Geoff Cutmore, Anchor, CNBC at China Development Forum 2017.

Geoff Cutmore: So what we have now is the new set of growth targets for the Chinese economy, are you concerned or otherwise, that we still continue to see the glide path, still lower growth rates for China?

Jean-Sebastien Jacques: So let’s be clear, if you ask me if I’m concerned about China the answer is absolutely no for 2017. Remember we are supplying lots of products to China: copper, iron ore for steel, bauxite for aluminum, even diamonds, so we have a pretty good understanding of what the situation is in China. And today when I look at our order books, I’ve got no concerns whatsoever.

GC: What’s your broad sense of the demand picture then for full year 2017 and running into 2018? Continue Reading →

Top Iron Miners’ Cash Juggernaut Set to Survive Price Crash – by David Stringer (Bloomberg News – March 13, 2017)

The world’s biggest iron ore miners will be able to withstand the expected plunge in prices because their race to cut production costs has dramatically lowered the industry’s margin pressure point, allowing them to keep fueling a cash juggernaut that’s revived the mining sector.

More than 90 percent of producers in the global seaborne market can generate profits at a benchmark price of $60 a metric ton, Adrian Doyle, a Sydney-based senior consultant at researcher CRU Group, said by phone. That compares with about 65 percent of suppliers able to avoid losses at the same price point three years ago, he said.

“There have been fantastic cost reductions in a lot of instances,” while producers have also been boosted by lower oil prices, Doyle said. “If we were thinking of a pressure point where we’d start to see a bit of stretching in the industry, previously it would’ve been around $60 a ton, now it’s closer to $50 a ton-to-$45 a ton to stress test everyone but the majors.” Continue Reading →

Sam Walsh befuddled by Rio Tinto wealth ‘deferral’ – by Matthew Stevens (Australian Financial Review – March 6 2017)

Every door at Rio Tinto used to be wide open to Sam Walsh. But when the former Rio Tinto chief executive and his lawyers checked in with his erstwhile dominion to find out what the board found so disturbing in the erupting Simandou email scandal, he was told: “Read the newspapers, Sam.”

Walsh is said to be befuddled and insulted by the lack of professional courtesy offered by his former employer through their time of shared crisis and thoroughly mystified by the logic that had the Rio Tinto board force a “deed of deferral” on the present and future benefits Walsh is owed by the company.

The deed, revealed in Rio Tinto’s annual report, puts a two-step delay on Walsh owning the full weight of deferred shares awarded under short and long-term incentive plans that would be worth about $20 million at current prices. Continue Reading →

Mining Companies Are Back in the Black – by Scott Patterson and Rhiannon Hoyle (Wall Street Journal – February 21, 2017)

Coming out of a punishing downturn, executives are still cautious despite the return to profitability

The world’s biggest miners are profit machines again, cashing in on soaring commodity prices and rewarding investors who stuck with them through a brutal downturn.

BHP Billiton Ltd., the world’s largest miner by market value, said Tuesday it earned a net profit of $3.2 billion for the second half of 2016 after posting a $5.7 billion loss in the year-ago period. Anglo American PLC, the fifth-largest mining company, reported a net profit of $1.6 billion for all of 2016, a dramatic rebound from 2015, when it lost $5.6 billion.

The solid performance builds on strong results posted by British-Australian miner Rio Tinto PLC, which two weeks ago said it earned $4.6 billion in 2016 following a loss of $866 million in the prior year. Switzerland-based Glencore PLC is scheduled to release 2016 results on Thursday, with analysts widely predicting a return to profit. Continue Reading →

Mining giants ride copper’s price wave – by Scott Patterson (Dow Jones/The Australian – February 20, 2017)

Copper bulls are looking smart — for now. Some of the world’s biggest mining companies, which have giant copper portfolios, are now poised to reap the rewards, with Anglo American, BHP Billiton and Glencore set to report full- or half-year earnings this week.

The industrial metal has surged more than 30 per cent in the past year, providing rocket fuel for companies that were staring into the abyss a year ago. Shares in Anglo and Glencore have more than tripled in the past 12 months. BHP, which has faced headwinds from a fatal tailings-dam disaster at one of its mining operations in Brazil, is up 62 per cent.

Rio Tinto, which is focusing more on its copper business, offered a preview of how miners’ fortunes have flipped to the upside when it reported earnings earlier this month. The Anglo-Australian mining giant said it returned to a profit in 2016 with $US4.62 billion in earnings, increased its dividend and announced a $US500 million share buyback. Continue Reading →

Iron ore rally fires up Rio Tinto’s commodity merry-go-round – by Clyde Russell (Reuters U.S. – February 15, 2017)

JOHANNESBURG Reuters) – Mining company super profits appear to be back on the agenda as earnings stand to be turbo-charged by higher-than-expected prices for iron ore and other metals, while volumes are also likely to be strong.

It’s the stuff of dreams for mining company bosses: high prices and strong production that can be sold into a rally.

Iron ore has been the standout so far in 2017, and as the steel-making ingredient surged to its highest level in three year above $90 a ton, so too will profits at the three major producers, Brazil’s Vale and the Anglo-Australian pair of Rio Tinto and BHP Billiton.

Investors have already had a little taste of what may come, with Rio raising its dividend above market expectations when it released results last week. Continue Reading →

Surging Iron Ore Won’t ‘Fall Off a Cliff,’ Says Rio Tinto – by David Stringer and Haidi Lun (Bloomberg News – Februay 13, 2017)

Iron ore will defy forecasts for a dramatic price collapse as China’s economy remains strong and the top buyer boosts demand for higher-quality imports, according to Rio Tinto Group, the second-largest exporter.

“I wouldn’t necessarily say that it’s going to fall off a cliff,” Chief Financial Officer Chris Lynch said Monday in an interview with Bloomberg Television’s Daybreak Australia. “I guess the key issue is that we have to be robust in case the price goes up, down or sideways, and that’s what we set out our business to do.”

Global exporters are benefiting as mills in China, the world’s top steelmaker, increasingly prefer higher-quality raw materials to raise efficiency and cut pollution, according to Lynch. Continue Reading →

[Australia mining] Brendon Grylls accuses BHP, Rio-backed mining lobby of ‘wet lettuce’ fight – by Julie-anne Sprague (Australian Financial Review – February 8, 2017)

WA Nationals leader Brendon Grylls has urged BHP Billiton and Rio Tinto to spend millions of dollars on a campaign against Prime Minister Malcolm Turnbull’s reluctance to change the GST distribution system.

Mr Grylls accused mining lobby group Chamber of Minerals and Energy (CME) of a ‘wet lettuce’ fight with the Federal government during a live ABC radio debate in Perth on Wednesday.

CME chief executive Reg Howard-Smith said the lobby group had spent $2 million fighting Mr Grylls’s proposal, which combined funds from BHP, Rio, the Minerals Council of Australia and the CME. Mr Howard-Smith agreed the GST distribution system was unfair and that the lobby group had publicly declared Western Australia needed a fairer deal. Continue Reading →

Rio Tinto Rewards Investors as Profit Rebounds on Iron Rally – by Jesse Riseborough and Perry Williams (Bloomberg News – February 8, 2017)

Rio Tinto Group will pay a much higher dividend than expected and buy back $500 million of shares after the world’s second-biggest mining company reported the first gain in annual profit since 2013.

Higher iron ore prices boosted underlying profit 12 percent to $5.1 billion in 2016, London-based Rio said on Wednesday. That beat the $4.75 billion average estimate of analysts compiled by Bloomberg.

The dividend fell 21 percent to 170 cents a share, reflecting a new policy aligning the payout to earnings. Still, that exceeded the average estimate of 136 cents in the Bloomberg survey and the company’s minimum payout of 110 cents. Rio will purchase U.K.-listed shares throughout this year. Continue Reading →