Archive | Rio Tinto

COLUMN-Fight over Rio’s mines means coal isn’t dead; Adani woes show it’s dying – by Clyde Russell (Reuters U.S. – June 26, 2017)

Here’s a question for the anti-coal lobby. If coal is dying, how come there is an increasingly heated bidding war going on for Rio Tinto’s coal mines in Australia? Here’s another question, this time for the pro-coal lobby. If coal still has a viable long-term future as an energy source, how come the world’s biggest planned new mine is now hostage to whether the Australian government decides to loan it money?

Reconciling these two questions may seem like a challenge but both the battle for Rio Tinto’s existing mines and the struggles of India’s Adani to build its Carmichael project neatly show where coal currently finds itself.

Rio’s mines in the Hunter Valley north of Sydney are attractive to both Glencore and China’s Yancoal because they are likely to be profitable for the remaining life of the pits, which is expected to be around 20 years. Continue Reading →

Bidding war intensifies for Rio Tinto’s Hunter Valley coal mines – by David Chau (Australian Broadcasting Corporation – June 26, 2017)

Rio Tinto is currently in a dilemma on who it should sell its Hunter Valley mines to – the Swiss or the Chinese. Late on Friday, Swiss-based company Glencore upped its bid to more than $3.5 billion (US$2.685 billion) for the purchase of Rio’s subsidiary, Coal & Allied Industries Limited.

The assets on the block are Rio’s Hunter Valley operations – the Warkworth/Mount Thorley thermal and semi-soft coking coal mines and a major stake in the Port Waratah coal loading facility in Newcastle.

Glencore said its latest offer is around $297 million ($US225 million) greater than Yancoal’s proposal. “We believe the Glencore offer satisfies the criteria for a ‘superior proposal’: it delivers substantially greater value to Rio Tinto shareholders and low deal completion risk,” Glencore said in a statement. Continue Reading →

Rio Tinto, Canada aluminum’s good guys in Commerce Department probe – by Suzanne O’Halloran (June 21, 2017)

The world’s biggest aluminum players want to set the record straight: they say they shouldn’t be lumped in with China, Russia and other alleged “bad actors” whose imports may be a threat to the security of the United States.

Among those Rio Tinto (RIO), the largest producer of aluminum in North America, via its operations in Quebec and British Columbia. “Rio Tinto’s operations, such as those in Utah, California and Arizona are strong contributors to the United States economy and employment” Rio Tinto CEO Alf Barrios said in prepared remarks viewed by FOX Business, to be delivered Thursday during a scheduled hearing.

Barrios also defended the miner’s long history as a U.S. defense ally dating back to World War II. “Our smelters have a long history of supplying U.S. manufacturers – particularly U.S. defense-related manufacturing” he notes. Continue Reading →

Rio Tinto recommends Yancoal coal offer over Glencore – by James Regan and Barbara Lewis (Reuters U.S. – June 20 2017)

SYDNEY/LONDON – Rio Tinto (RIO.L) (RIO.AX) selected Yancoal (YAL.AX) on Tuesday to buy its Coal & Allied division in Australia for $2.45 billion, surprising commodities trading giant Glencore (GLEN.L) which had put in a higher bid.

Earlier this month, Glencore offered $2.55 billion cash for Rio’s coal mines in the Hunter Valley region of New South Wales, beating a previous offer from Yancoal, which is based in Australia and owned by China’s Yanzhou Coal Mining Company.

Glencore has long sought Rio’s high-quality thermal coal assets in the Hunter Valley. Despite environmental concerns about the carbon-intensive fossil fuel, Glencore expects continued demand, especially in Asia, as coal can still be the cheapest form of baseload power. Continue Reading →

We’re confident a bid for Rio Tinto will clear hurdles: Glencore – by Bridget Carter and Scott Murdoch (The Australian – Jun 15, 2017)

Rio Tinto’s preferred bidder is expected to be revealed next week and Glencore is lobbying that its offer is unlikely to be hamstrung by onerous legislative hurdles.

The Switzerland-based trading house’s global coal boss, Peter Freyberg, briefed the Rio Tinto board in Montreal overnight and reportedly emphasised it was confident regulators would not pose an insurmountable hurdle.

Glencore’s critics have highlighted that China’s Ministry of Commerce took six months to approve the company’s purchase of a 50 per cent stake in Rio Tinto’s Clermont mine. But the six months was based on the fact that the Mofcom, arguably the country’s second most powerful arm of government, was examining the broader Glencore and Xstrata transactions. Continue Reading →

Rio Tinto CEO sees Canada as less business-friendly than in past – by Allison Lampert and Nicole Mordant (Reuters U.S. – June 13, 2017)

The chief executive of Anglo-Australian miner Rio Tinto , which owns iron ore, diamond and aluminum mines and processing facilities in Canada, said on Tuesday that it was becoming tougher to do business in the resource-rich country.

“You know mining well and you understand its value, but to be very frank it has been getting harder to do business here over the years – from employee relations to tax to managing land access,” Rio Tinto CEO Jean-Sebastien Jacques said in prepared remarks to be delivered at the International Economic Forum of the Americas in Montreal. Jacques did not elaborate on his comments.

Calling it the “biggest mining and metals company in Canada,” Jacques said Rio Tinto had paid C$3.9 billion ($2.93 billion) in Canadian taxes since 2011 while investing more than C$8 billion. Continue Reading →

Glencore’s Coal Future Burns Bright – by David Fickling (Bloomberg News – June 12, 2017)

Is Glencore Plc’s last-minute bid for Rio Tinto Group’s Australian thermal coal assets about quantity, or quality? It’s a bit of both. With a tenement footprint that’s more or less surrounded by Glencore’s own mines, Rio Tinto’s Hunter Valley pits have long been an obvious target for the trader.

In volume terms, the $2.55 billion offer looks like the sort of deal that typically went down a decade ago, when the thermal coal used in power stations was a hot commodity and the likes of Rio Tinto and Anglo American Plc were looking to add assets, rather than exit ones still on their books.

Glencore is by far the biggest coal miner in the Hunter Valley, the region north of Sydney that supplies the world’s biggest coal export harbor at Newcastle. But its mines are rapidly depleting, and will run out in about a decade at current production rates. Add Rio Tinto’s vast resource base and lower output pace, and you could comfortably extend that deadline into the mid-2030s or beyond. Continue Reading →

Glencore outbids Yancoal for Rio Tinto’s Hunter Valley coal mines – by Barbara Lewis and Sanjeeban Sarkar (Reuters U.S. – June 9, 2017)

Miner-trader Glencore (GLEN.L) on Friday said it had offered $2.55 billion cash for coal mines owned by Rio Tinto (RIO.L) (RIO.AX) in Hunter Valley, Australia, outbidding a previous offer from Chinese-owned Yancoal.

The large-scale, long-life assets are next to mines already owned by Glencore, which has predicted continued demand for coal, especially in Asia, despite environmental opposition to the most polluting form of fossil fuel.

In January, Rio said it was selling its interest in Coal & Allied Industries Limited (C&A) to Yancoal Australia Limited (YAL.AX) for $2.45 billion. The terms allowed Rio to engage in negotiations with another party if it made a better offer. Continue Reading →

Mongolia presidential hopeful urges more state control in mining – by Terrence Edwards (Reuters U.S. – June 8, 2017)

ULAANBAATAR – A leading candidate for Mongolia’s presidency has called for greater state control of projects like the giant Oyu Tolgoi copper-gold mine run by Rio Tinto, making mining and foreign investment central issues in the election campaign.

The landlocked North Asian country of three million people goes to the polls on June 26, just a month after securing a $5.5 billion International Monetary Fund-led bailout to lift the economy out of a balance of payments crisis.

Campaigning began on Tuesday, and painful austerity measures agreed by the Mongolian People’s Party (MPP), which runs the government but doesn’t hold the presidency, have made an easy target for rivals, as have controversies over deals done with foreign mining companies. Continue Reading →

Rio Tinto, China’s Minmetals sign deal on exploration (Reuters U.S. – June 6, 2017)

Rio Tinto and China Minmetals Corp on Tuesday signed an outline deal on collaboration in mineral exploration, saying the partnership would position it to find the reserves needed for today’s economy.

Major miners have been seeking ways to maximize exploration budgets and they have also been analyzing the sustainability of their portfolios as the needs of China, the world’s biggest commodity consumer, change as its economy matures.

“Minmetals is rapidly becoming an important player in the global mining industry and we look forward to partnering with them,” Rio Tinto Chief Executive J-S Jacques said in a statement. Continue Reading →

BHP and Rio face fresh tax threat in WA – by Tess Ingram and Peter Ker (Australian Financial Review – May 28, 2017)

Iron ore giants BHP Billiton and Rio Tinto are facing a fresh tax grab in Western Australia just months after seeing off the WA Nationals’ concerted push to slap the miners with a tax hike that would have cost them about $3 billion a year.

West Australian Premier Mark McGowan confirmed on Sunday the new Labor state government would ask BHP and Rio to “buy out” the 25¢ lease rental fee they pay on every tonne of iron ore produced to provide a potentially multibillion-dollar injection to government coffers.

At current production rates BHP and Rio would collectively owe WA about $150 million a year in lease rental fees, and while there was no clarity on the number of years’ fees WA wants paid up front, the bill would rise to $4.5 billion if the two miners paid 30 years’ worth of fees in a lump sum. Continue Reading →

Miners ready for new Mongolia boom with one-fifth of the country to be opened for digging – by Blanche Lim ( – May 23, 2017)

A new mining boom may be just around the corner in Mongolia, mining industry executives said, as it moves to open nearly 21 percent, a bit more than one-fifth, of the country for exploration to shore up its finances following an IMF-led bailout.

This month Mongolia’s government removed the main obstacle to its $5.5 billion IMF-led bailout. It annulled a controversial banking law that would have required companies like Rio Tinto to funnel all sales revenues from foreign investment projects through Mongolian banks and proposed the wider exploration area.

Andrew Stewart, managing director and CEO of Xanadu Mines, told CNBC’s “Street Signs” that the reform along with other steps to opening the mining sector should see investment grow. Continue Reading →

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 →