It's been a long time coming for Turquoise Hill (NYSE:TRQ) and Rio Tinto (NYSE:RIO)
concerning their stake in the massive Oyu Tolgoi, as they have finally
come to an agreement with the Mongolian government to move ahead with
its development of the next phase of the mine, which is to expand the
major underground portion of the resource, which at this time, is
estimated to account for approximately 80 percent of the mineral value
of the mine.
Major sticking points which led to the differences have been resolved, including cost overruns and taxes.
With
that behind them, the next areas to approve and make transparent will
be an underground feasibility study and project financing. There is
little to suggest there will be a problem in those areas, so it appears
Turquoise Hill should fairly quickly be able to move operations forward.
read more...
Showing posts with label Rio Tinto. Show all posts
Showing posts with label Rio Tinto. Show all posts
Friday, May 22, 2015
Friday, April 10, 2015
Time to Take a Position in Turquoise Hill?
Financial news outlets were blaring out headlines and lead stories about an alleged agreement between the government of Mongolia and Rio Tinto (RIO) and Turquoise Hill (TRQ) concerning Oyu Tolgoi, the rich mineral resource in the country.
While it would be welcome news to investors if this is in fact the case, I will wait until I hear very clearly from Rio CEO Sam Walsh on his take in the deal.
Just recently Walsh stated very clearly that the final offer was on the table, and it's a check to me that he has been very quiet after the supposed blockbuster announcement from Mongolia’s Prime Minister Saikhanbileg, that past hindrances to the project have been resolved and the project is cleared to move ahead.
If that was really the case, it's very puzzling that there are no confirmations of this outside of a small story and line from Sky News in Australia, which asserted Walsh confirmed the story.
To me, this is too big of a story and impetus for it to be ignored by Rio and Turquoise Hill, if indeed a deal has been made.
This is especially true after Walsh said just a little over a week ago thatnegotiations had reached the critical stage, with the major issues left to be faced. It's puzzling to believe it took that long to fix a number of smaller issues, and in a short week the major issues have quickly been resolved. It's possible, but highly unlikely.
More on Oyu Tolgoi, Turquoise Hill and Rio Tinto
While it would be welcome news to investors if this is in fact the case, I will wait until I hear very clearly from Rio CEO Sam Walsh on his take in the deal.
Just recently Walsh stated very clearly that the final offer was on the table, and it's a check to me that he has been very quiet after the supposed blockbuster announcement from Mongolia’s Prime Minister Saikhanbileg, that past hindrances to the project have been resolved and the project is cleared to move ahead.
If that was really the case, it's very puzzling that there are no confirmations of this outside of a small story and line from Sky News in Australia, which asserted Walsh confirmed the story.
To me, this is too big of a story and impetus for it to be ignored by Rio and Turquoise Hill, if indeed a deal has been made.
This is especially true after Walsh said just a little over a week ago thatnegotiations had reached the critical stage, with the major issues left to be faced. It's puzzling to believe it took that long to fix a number of smaller issues, and in a short week the major issues have quickly been resolved. It's possible, but highly unlikely.
More on Oyu Tolgoi, Turquoise Hill and Rio Tinto
Saturday, June 1, 2013
Rio Tinto Gets Lean as Oyo Tolgoi Shipments Approach
As anticipation of the first shipments from Oyu Tolgoi, the giant copper and gold project in Mongolia, builds, Rio Tinto's (RIO) CEO Sam Walsh offered his input on the strategy of the company overall, and where things stand with Oyu Tolgoi specifically, at the Bank of America Merrill Lynch conference in Barcelona recently.
Walsh said all the right things, and it's worthwhile taking a look at them as the strategy of the company is one that should be considered a bellwether for the mining industry in general. If you're looking at miners, the actions and ideas presented by Walsh should be taken into account in the analysis of other mining companies. If they aren't taking similar actions, they could be in real trouble in the current economic environment.
continue reading ...
Walsh said all the right things, and it's worthwhile taking a look at them as the strategy of the company is one that should be considered a bellwether for the mining industry in general. If you're looking at miners, the actions and ideas presented by Walsh should be taken into account in the analysis of other mining companies. If they aren't taking similar actions, they could be in real trouble in the current economic environment.
continue reading ...
Tuesday, May 28, 2013
Rio Tinto and Turquoise as Oyu Tolgoi Shipments About to Begin
The rough and tumble conditions associated with the gigantic Oyu Tolgoi mine in Mongolia are about to pay off for Turquoise Hill Resources (TRQ) and Rio Tinto (RIO) as approval to ship copper from the mine may be as close as two weeks away.
Rio Tinto CEO Sam Walsh said this:
We are still looking for some approvals in relation to exactly how we transport and ship the material ... that we expect to receive in the next couple of weeks.I think we have moved well down the path in terms of resolving issues the government had tabled with us, enabling us really to move forward with the project.
Commercial production was previously expected to launch near the latter part of June, but Walsh says that copper may be able to be shipped by that time.
Monday, March 4, 2013
Oyu Tolgoi Gets $4 Billion Financing Commitment
One of the largest mines in the world - Oyu Tolgoi - has received confirmation and commitment from several sources for a $4 billion financing package.
Interestingly, part of that financing is coming from the European Bank for Reconstruction and Development. It confirms the quality and quantity of the resources at Oyu Tolgoi, as Europe has significantly cut back on mining financing over the last couple of years; one of the major reasons the junior miners have been struggling to secure capital.
Rio Tinto (RIO) said, “This is a further important step in securing long-term project financing for the development of Oyu Tolgoi.”
The other major entity committing to financing the project is the International Finance Corp., which will commit about $400 million in a regular loan, and as high as $1 billion in a syndicated loan.
The European Bank for Reconstruction and Development (EBRD) is contemplating about $400 million for the project. Financing for the deal has yet to be officially signed off on.
Production at the mine is expected to begin in about June 2013, although Mongolia has demanded a higher percentage of the mine than the agreement they originally agreed to.
Interestingly, part of that financing is coming from the European Bank for Reconstruction and Development. It confirms the quality and quantity of the resources at Oyu Tolgoi, as Europe has significantly cut back on mining financing over the last couple of years; one of the major reasons the junior miners have been struggling to secure capital.
Rio Tinto (RIO) said, “This is a further important step in securing long-term project financing for the development of Oyu Tolgoi.”
The other major entity committing to financing the project is the International Finance Corp., which will commit about $400 million in a regular loan, and as high as $1 billion in a syndicated loan.
The European Bank for Reconstruction and Development (EBRD) is contemplating about $400 million for the project. Financing for the deal has yet to be officially signed off on.
Production at the mine is expected to begin in about June 2013, although Mongolia has demanded a higher percentage of the mine than the agreement they originally agreed to.
Thursday, January 17, 2013
Rio Tinto's (RIO) CEO Albanese Pushed Out
Rio Tinto Group (RIO) Chief Executive Officer Tom Albanese has been removed from the company after disastrous deals led to a write down of approximately $14 billion. The two major deals that led to his departure were the $38 billion acquisition of Alcan Inc. and the $4.1 billion purchase of coal producer Riversdale Mining Ltd. of Mozambique.
Since 2009, Rio has had to write down its aluminum division by over $29 billion, and over the last couple of years wrote down the Riversdale acquisition by 70 percent.
At particular fault was the failure of analysis when deciding to buy the companies, as well as the lack of discipline in using capital. After the Alcan acquisition the debt of the company soared to as high as 19 times what it had been.
Replacing Albanese will be the head of Rio's iron ore unit - Sam Walsh. The decision to choose the 63-year-old Walsh suggests the company is grooming a replacement while he attempts to right the ship in order to have it relatively healthy for an incoming CEO.
Chairman Jan du Plessis said this, “The Rio Tinto board fully acknowledges that a writedown of this scale in relation to the relatively recent Mozambique acquisition is unacceptable. We are also deeply disappointed to have to take a further substantial writedown in our aluminum businesses, albeit in an industry that continues to experience significant adverse changes globally.”
RIO was trading at $54.51, down $0.52, or 0.94%, as of 1:24 PM EST.
Since 2009, Rio has had to write down its aluminum division by over $29 billion, and over the last couple of years wrote down the Riversdale acquisition by 70 percent.
At particular fault was the failure of analysis when deciding to buy the companies, as well as the lack of discipline in using capital. After the Alcan acquisition the debt of the company soared to as high as 19 times what it had been.
Replacing Albanese will be the head of Rio's iron ore unit - Sam Walsh. The decision to choose the 63-year-old Walsh suggests the company is grooming a replacement while he attempts to right the ship in order to have it relatively healthy for an incoming CEO.
Chairman Jan du Plessis said this, “The Rio Tinto board fully acknowledges that a writedown of this scale in relation to the relatively recent Mozambique acquisition is unacceptable. We are also deeply disappointed to have to take a further substantial writedown in our aluminum businesses, albeit in an industry that continues to experience significant adverse changes globally.”
RIO was trading at $54.51, down $0.52, or 0.94%, as of 1:24 PM EST.
Tuesday, November 6, 2012
Rio (RIO), Turquoise (TRQ) Gets Power at Oyu Tolgoi
Rio Tinto (NYSE: RIO) and partner Turquoise Hill Resources (NYSE: TRQ) had good news to announce Monday as the challenge of obtaining the required power to run the mine was successfully navigated. The partners are now set to begin production on the mine in the early part of 2013.
The agreement put in place is a $6 billion deal with Inner Mongolia Power Corp. The deal was held up by differences between Mongolia and China, where much of the power will be provided from.
In as early as six weeks the first ore from Oyu Tolgoi will be processed by Turquoise Hill Resources. The company confirmed its projections of commercial production beginning sometime in early part of next year.
Goals for Turquoise Hill are to have the Oyu Tolgoi mine in full production by 2018. Estimates are it'll cost from $3 billion to $4 billion for the company to accomplish the task.
Underground mining is expected to start in 2016, after a feasibility study is released by Turquoise Hill in 2013.
Annual production estimates for the mine are for 1.2 billion pounds of copper, 650,000 ounces of gold and 3 million ounces of silver.
Turquoise Hill Resources, which owns the mine with the Mongolian government and Rio Tinto, hold a 66 percent stake in Oyu Tolgoi. Rio is running the operations.
Rio and Turqoise still face some uncertainties as the government has asked for Turquoise Hill to renegotiate the contract in place, something the company at this time has refused to do. Until that is solved, a cloud will of uncertainty will hang over the deal.
Once the uncertainty is removed and commercial production begins, Turquoise Hill Resources, especially, should take off in a major way on its share price. It could be one of the biggest mining success stories for many years, bringing shareholders some major success.
Wednesday, September 5, 2012
Rio Tinto (RIO) Challenged by Oyu Tolgoi's Lack of Power
Rio Tinto (NYSE: RIO) isn't in an enviable place concerning its Oyu Tolgoi mine in Mongolia, as it's sitting on an amazing property only to be challenged and frustrated over not having the electric power resources on hand to run the operations there.
Oyu Tolgoi has enormous amounts of copper and gold in it, along with a number of smaller amounts of metals.
At this time Rio Tinto is struggling to find enough electricity to operate the mine, as it closes in on completing project, with only 6 percent of the project remaining.
According to Turquoise Hill Resources (formerly Ivanhoe Mines), the mine should be operating commercially by as early as 2013.
At this time China is the major provider of electricity, and it's not a guarantee that once the increased demand for power comes about from an operating mine that China will be willing to sell it to Rio Tinto, as there have been poor relations between China and Mongolia for some time.
To make it work, Rio Tinto will probably have to enter into negotiations with China itself to ensure it has enough power for the giant mining project.
So at this time Oyu Tolgoi must be considered a property with extraordinary potential, but always seeming to be one step away from significantly adding to the bottom line of Rio Tinto.
In the second quarter alone Rio had a net loss of $285.9 million at the mine, and to recoup and go into the black, they must secure electricity in a timely manner in order to be sure this amazing resource doesn't become a huge weight around the fiscal neck of the company.
And even if electricity is secured, for Rio Tinto investors, it must be taken with a long-term view as to how it will have an impact on the bottom line of the company.
Once it's going full throttle, which could take several years, it will be a huge feather in the cap of Rio Tinto, but it will take patience on the part of shareholders to wait until that time arrives.
Oyu Tolgoi has enormous amounts of copper and gold in it, along with a number of smaller amounts of metals.
At this time Rio Tinto is struggling to find enough electricity to operate the mine, as it closes in on completing project, with only 6 percent of the project remaining.
According to Turquoise Hill Resources (formerly Ivanhoe Mines), the mine should be operating commercially by as early as 2013.
At this time China is the major provider of electricity, and it's not a guarantee that once the increased demand for power comes about from an operating mine that China will be willing to sell it to Rio Tinto, as there have been poor relations between China and Mongolia for some time.
To make it work, Rio Tinto will probably have to enter into negotiations with China itself to ensure it has enough power for the giant mining project.
So at this time Oyu Tolgoi must be considered a property with extraordinary potential, but always seeming to be one step away from significantly adding to the bottom line of Rio Tinto.
In the second quarter alone Rio had a net loss of $285.9 million at the mine, and to recoup and go into the black, they must secure electricity in a timely manner in order to be sure this amazing resource doesn't become a huge weight around the fiscal neck of the company.
And even if electricity is secured, for Rio Tinto investors, it must be taken with a long-term view as to how it will have an impact on the bottom line of the company.
Once it's going full throttle, which could take several years, it will be a huge feather in the cap of Rio Tinto, but it will take patience on the part of shareholders to wait until that time arrives.
Monday, July 30, 2012
Rio (RIO) Keeps 51 Percent Ivanhoe (IVN) Stake
Rio Tinto (RIO) said it retained its 51 percent stake in Ivanhoe Mines (IVN) by paying 935 million to maintain the position.
The acquisition of the shares came about from a shareholder rights offering by Ivanhoe.
Rio acquired 133.6 million additional shares of Ivanhoe as a result of the offering, paying $7 a share. The company now owns over 510 million shares of Ivanhoe.
Ivanhoe is developing the gigantic Mongolian mine Oyu Tolgoi, which holds huge deposits of gold and copper.
The offering was part of the strategy on the part Of Ivanhoe to finance the development of the mine.
Construction on the mine continues, with production scheduled to begin in the latter part of 2012, and commercial production to launch in 2013.
Ivanhoe closed Monday at $8.56, down $0.14, or 1.61 percent. Rio Tinto closed at $46.29, gaining $0.12, or 0.26 percent.
The acquisition of the shares came about from a shareholder rights offering by Ivanhoe.
Rio acquired 133.6 million additional shares of Ivanhoe as a result of the offering, paying $7 a share. The company now owns over 510 million shares of Ivanhoe.
Ivanhoe is developing the gigantic Mongolian mine Oyu Tolgoi, which holds huge deposits of gold and copper.
The offering was part of the strategy on the part Of Ivanhoe to finance the development of the mine.
Construction on the mine continues, with production scheduled to begin in the latter part of 2012, and commercial production to launch in 2013.
Ivanhoe closed Monday at $8.56, down $0.14, or 1.61 percent. Rio Tinto closed at $46.29, gaining $0.12, or 0.26 percent.
Monday, April 2, 2012
Rio Tinto (RIO) (CNQ) (NOR) (PAAS) (POT) (AAUKY) (WFC) Ratings, Price Targets
Rio Tinto (RIO), Canadian Natural Resources (CNQ), Noranda Aluminum Holding Co. (NOR), Pan American Silver (PAAS), Potash (POT), Anglo American plc (AAUKY) and Wells Fargo & Co. (WFC) had ratings and price targets on them adjusted by analysts.
Deutsche Bank initiated coverage on Pan American Silver (PAAS). They placed a "Buy" rating and price target of $31.00 on the company.
Barclays Capital upgraded Canadian Natural Resources (CNQ) from a "Equal Weight" rating to a "Overweight" rating.
Bank of America upgraded Noranda Aluminum Holding Co. (NOR) from a "Neutral" rating to a "Buy" rating.
Barclays Capital upgraded Rio Tinto (RIO) from a "Equal Weight" rating to a "Overweight" rating.
Raymond James initiated coverage on Potash (POT). They placed an "Outperform" rating on the company.
Barclays Capital downgraded Anglo American plc (AAUKY) from a "Equal Weight" rating to a "Underweight" rating.
Nomura upgraded Wells Fargo & Co. (WFC) from a "Neutral" rating to a "Buy" rating.
Deutsche Bank initiated coverage on Pan American Silver (PAAS). They placed a "Buy" rating and price target of $31.00 on the company.
Barclays Capital upgraded Canadian Natural Resources (CNQ) from a "Equal Weight" rating to a "Overweight" rating.
Bank of America upgraded Noranda Aluminum Holding Co. (NOR) from a "Neutral" rating to a "Buy" rating.
Barclays Capital upgraded Rio Tinto (RIO) from a "Equal Weight" rating to a "Overweight" rating.
Raymond James initiated coverage on Potash (POT). They placed an "Outperform" rating on the company.
Barclays Capital downgraded Anglo American plc (AAUKY) from a "Equal Weight" rating to a "Underweight" rating.
Nomura upgraded Wells Fargo & Co. (WFC) from a "Neutral" rating to a "Buy" rating.
Friday, November 5, 2010
Cliffs Natural Resources (NYSE:CLF), BHP (NYSE:BHP), Rio Tinto (NYSE:RTP), Vale (NYSE:VALE) Move Up as Commodity Prices Surge
The expected positive disruption in the commodity sector has happened in a big way after the announcement by the Federal Reserve that they were going to resume inflating, and natural resource companies like Cliffs Natural Resources (NYSE:CLF), BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RTP), Vale SA (NYSE:VALE) all soared with the inevitable plunge in value of the U.S. dollar accompanying the quantitative easing.
Gold prices are soaring to new highs, as spot gold approached $1,400 an ounce at the end of closing on Thursday. Aluminum prices also reached levels not seen since April.
BHP closed Thursday at $91.20, gaining $5.12, or 5.95 percent. Cliffs ended the session at an even $70, rising $3.13, or 4.68 percent. Rio Tinto surged to close in New York at $70.52, increasing by $3.74, or 5.60 percent. Vale SA ended the day at $33.80, rising by $1.34, or 4.13 percent.
The overall commodity sector exploded Thursday as what appears to be pent-up expectation and anticipation concerning the Fed move poured out through investors putting their money into the commodity sector in a big way.
Gold prices are soaring to new highs, as spot gold approached $1,400 an ounce at the end of closing on Thursday. Aluminum prices also reached levels not seen since April.
BHP closed Thursday at $91.20, gaining $5.12, or 5.95 percent. Cliffs ended the session at an even $70, rising $3.13, or 4.68 percent. Rio Tinto surged to close in New York at $70.52, increasing by $3.74, or 5.60 percent. Vale SA ended the day at $33.80, rising by $1.34, or 4.13 percent.
The overall commodity sector exploded Thursday as what appears to be pent-up expectation and anticipation concerning the Fed move poured out through investors putting their money into the commodity sector in a big way.
Wednesday, October 27, 2010
BHP (NYSE:BHP) Should Hold Strong on Mining Tax
Opposition to the draconian mining tax in Australia helped bring down the administration of Kevin Rudd, especially with BHP Billiton (NYSE:BHP) and CEO Marius Kloppers, and the general public, opposing it.
Hopefully will also bring down socialist Julia Gillard, who is attempting to keep the outrageous tax in place, albeit at lower levels than originally proposed.
Mining giants BHP Billiton and Rio Tinto (NYSE:RIO) have been the leaders in opposition to the outrageous tax, which will only encourage the expansion of government programs and spending instead of freedom and free markets.
The Australian states also need to be reined in, who have also set up to confiscate as much of the profits from the miners as they can get their hands on. Together it's producing a devastating impact on the industry.
A deal with the government before Gillard ousted Rudd is being attempted to be cast aside, something BHP and Kloppers especially vehemently oppose.
The best thing that could happen would be to eliminate the tax altogether, and drop the majority of the tax imposed by the states of Australia for no other purpose than to enlarge out-of-control government spending.
Austerity and limited government is the way forward, and governments around the world better get on board with it.
Hopefully will also bring down socialist Julia Gillard, who is attempting to keep the outrageous tax in place, albeit at lower levels than originally proposed.
Mining giants BHP Billiton and Rio Tinto (NYSE:RIO) have been the leaders in opposition to the outrageous tax, which will only encourage the expansion of government programs and spending instead of freedom and free markets.
The Australian states also need to be reined in, who have also set up to confiscate as much of the profits from the miners as they can get their hands on. Together it's producing a devastating impact on the industry.
A deal with the government before Gillard ousted Rudd is being attempted to be cast aside, something BHP and Kloppers especially vehemently oppose.
The best thing that could happen would be to eliminate the tax altogether, and drop the majority of the tax imposed by the states of Australia for no other purpose than to enlarge out-of-control government spending.
Austerity and limited government is the way forward, and governments around the world better get on board with it.
Tuesday, October 19, 2010
BHP (NYSE:BHP), Teck (NYSE:TCK), Freeport (NYSE:FCX) and Rio Tinto (NYSE:RIO) Will Soar on Quantitative Easing
With the Federal Reserve poised to inflate via quantitative easing, a number of commodities will surge in price, which will strongly benefit diversified miners like BHP Billiton (NYSE:BHP), Teck Resources (NYSE:TCK), Freeport McMoran (NYSE:FCX) and Rio Tinto (NYSE:RIO).
According to UBS (NYSE:UBS), some of their top commodity picks include gold, copper, palladium, iron ore, thermal coal and zinc. They added they believe it's a "game changer" for commodities.
Talking on global capital flows, UBS said that should strengthen "credit creation in emerging markets." The giant bank concluded, "We believe that QE2 will prolong the bull market in commodities."
UBS' top pick in the commodity sector is palladium, which they see making significant gains through 2015.
In what could be troubling news for aluminum producers like Alcoa (NYSE:AA), UBS sees aluminum and nickel, among other commodities whose supply has little constraint upon them as being less desirable and affected by quantitative easing.
Gold of course will continue to perform strongly for some time to come. In that space, besides companies mentioned above, they like gold mining giant Barrick Gold (NYSE:ABX).
UBS said they like gold mining stocks over ownership of physical gold.
According to UBS (NYSE:UBS), some of their top commodity picks include gold, copper, palladium, iron ore, thermal coal and zinc. They added they believe it's a "game changer" for commodities.
Talking on global capital flows, UBS said that should strengthen "credit creation in emerging markets." The giant bank concluded, "We believe that QE2 will prolong the bull market in commodities."
UBS' top pick in the commodity sector is palladium, which they see making significant gains through 2015.
In what could be troubling news for aluminum producers like Alcoa (NYSE:AA), UBS sees aluminum and nickel, among other commodities whose supply has little constraint upon them as being less desirable and affected by quantitative easing.
Gold of course will continue to perform strongly for some time to come. In that space, besides companies mentioned above, they like gold mining giant Barrick Gold (NYSE:ABX).
UBS said they like gold mining stocks over ownership of physical gold.
BHP (NYSE:BHP) and Rio (NYSE:RIO) Iron Ore Deal Collapses
After almost a year and a half of pursuing a deal to combine iron ore operations, BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) have finally thrown in the towel, acknowledging it's not going to be approved by regulators.
Although the size of the deal generated a lot of interest, the judgement of both CEOs, Marius Kloppers for BHP and Tom Albanese for Rio Tinto, have been questioned as to why they even went after something with so little chance of success.
For Kloppers it's especially telling, as he is under pressure to expand the company, and he now has two failures under his belt and if facing strong pressure from Canadian forces to undermine the bid for Potash Corp. (NYSE:POT), although he has a legitimate chance at making that one happen.
As far as the Rio, BHP deal, the benefit was touted as savings of a minimum of $10 billion if they combined operations.
The deal for Potash is far more realistic than the past attempt to acquire Rio Tinto be BHP or the proposed iron ore deal. For a company the size of BHP it is big enough to add to the bottom line and grow the company in a new sector, while not being so large it would damage their credit rating and pull the company down for years.
Although the size of the deal generated a lot of interest, the judgement of both CEOs, Marius Kloppers for BHP and Tom Albanese for Rio Tinto, have been questioned as to why they even went after something with so little chance of success.
For Kloppers it's especially telling, as he is under pressure to expand the company, and he now has two failures under his belt and if facing strong pressure from Canadian forces to undermine the bid for Potash Corp. (NYSE:POT), although he has a legitimate chance at making that one happen.
As far as the Rio, BHP deal, the benefit was touted as savings of a minimum of $10 billion if they combined operations.
The deal for Potash is far more realistic than the past attempt to acquire Rio Tinto be BHP or the proposed iron ore deal. For a company the size of BHP it is big enough to add to the bottom line and grow the company in a new sector, while not being so large it would damage their credit rating and pull the company down for years.
Friday, October 15, 2010
Rio Tinto (NYSE:RIO) Beats Analysts' Iron Ore Estimates
Rio Tinto (NYSE:RIO) reported it surpassed analysts' expectations for iron ore production in the third quarter, breaking its own quarter record in the segment, while also breaking quarterly production records for coking coal and alumina.
Iron ore production was up 10 percent, alumina 6 percent and coking coal 17 percent. Another metal gaining significantly was bauxite, which gained 17 percent in the same period.
The company said: "This quarter we achieved record production in iron ore, alumina and coking coal. Our investment in organic growth is gathering momentum. We approved more than $4 billion of capital projects during the third quarter, including investment towards the expansion of our Pilbara iron ore operations to 330 million tons per annum. This takes our total approvals this year to $5.5 billion and is consistent with our capex guidance of $13 billion over the 18 months to December 2011."
The bad news for the company was gold and copper production was down at a time when prices for both metals have been skyrocketing. Copper was down 19 percent and gold 33 percent in the third quarter.
Also slightly down was aluminum production, dropping 2 percent, and thermal coal production in Australia, which fell 14 percent.
Iron ore production was up 10 percent, alumina 6 percent and coking coal 17 percent. Another metal gaining significantly was bauxite, which gained 17 percent in the same period.
The company said: "This quarter we achieved record production in iron ore, alumina and coking coal. Our investment in organic growth is gathering momentum. We approved more than $4 billion of capital projects during the third quarter, including investment towards the expansion of our Pilbara iron ore operations to 330 million tons per annum. This takes our total approvals this year to $5.5 billion and is consistent with our capex guidance of $13 billion over the 18 months to December 2011."
The bad news for the company was gold and copper production was down at a time when prices for both metals have been skyrocketing. Copper was down 19 percent and gold 33 percent in the third quarter.
Also slightly down was aluminum production, dropping 2 percent, and thermal coal production in Australia, which fell 14 percent.
Thursday, October 14, 2010
BHP (NYSE:BHP), Rio Tinto (NYSE:RIO) JV Opposed by Germany, Japan
Both Germany and Japan have signaled they're going to oppose the proposed iron ore joint venture between BHP (NYSE:BHP) and Rio Tinto (NYSE:RIO), citing competition concerns.
It is opposed by steelmakers in both countries, who have pressured regulators to oppose the deal.
If the companies are allowed to go ahead with the deal it would save them a minimum of $10 billion in costs from combining railroads, ports and mines in the Western Australia region of Pilbara.
The companies said in a joint statement: “The parties continue to believe that the joint venture is pro-competitive and will increase the supply of iron ore. However, both BHP Billiton and Rio Tinto acknowledge the concerns expressed by some regulators and the obstacles to achieving clearance for the joint venture.”
Rio and BHP can both respond to the objections before a final decision is made.
They said they haven't decided the next steps to take concerning the venture at this time.
It is opposed by steelmakers in both countries, who have pressured regulators to oppose the deal.
If the companies are allowed to go ahead with the deal it would save them a minimum of $10 billion in costs from combining railroads, ports and mines in the Western Australia region of Pilbara.
The companies said in a joint statement: “The parties continue to believe that the joint venture is pro-competitive and will increase the supply of iron ore. However, both BHP Billiton and Rio Tinto acknowledge the concerns expressed by some regulators and the obstacles to achieving clearance for the joint venture.”
Rio and BHP can both respond to the objections before a final decision is made.
They said they haven't decided the next steps to take concerning the venture at this time.
Freeport (NYSE:FCX), BHP (NYSE:BHP), Rio (NYSE:RIO), Vale (NYSE:VALE) Soar on Rising Copper Prices
Gold prices aren't the only metal soaring on the inevitable continuation of inflationary measures by the Federal Reserve, which they now call "quantitative easing" now, as copper is the also moving up in price, and major copper miners like Freeport-McMoRan (NYSE:FCX), BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO), Vale SA (NYSE:VALE) are moving up in unison with it.
Copper prices today (Wednesday) increased to $8,430 a ton, the highest levels it has reached since July 2008, or for 27 months. Two-year highs have been the norm for copper since the latter part of September.
Another reason for the higher copper prices is the tightening of stock, where LME stocks have fallen 475 tons to 371,275 tons since February, a 30 percent drop.
The fall in the value of the U.S. dollar is the consequence of the misguided Federal Reserve policies, and that is the major catalyst behind the booming metals prices and upward move of the metal miners.
Copper prices today (Wednesday) increased to $8,430 a ton, the highest levels it has reached since July 2008, or for 27 months. Two-year highs have been the norm for copper since the latter part of September.
Another reason for the higher copper prices is the tightening of stock, where LME stocks have fallen 475 tons to 371,275 tons since February, a 30 percent drop.
The fall in the value of the U.S. dollar is the consequence of the misguided Federal Reserve policies, and that is the major catalyst behind the booming metals prices and upward move of the metal miners.
Wednesday, October 13, 2010
BHP (NYSE:BHP), Rio Tinto (NYSE:RTP) Meeting with EU Regulators
The fate of the proposed iron ore joint venture between BHP (NYSE:BHP) and Rio Tinto (NYSE:RTP) will be pushed along by the meeting the companies will have with EU antitrust regulators.
After the meeting, which will be near the end of October, the European Commission will make a decision on whether to allow the $116 billion venture to proceed.
What will be determined is if it is anti-competitive or not.
Both companies will keep their marketing operations separate, which they say should help with competitive concerns.
While a number of other countries are also reviewing the deal, Europe is considered the toughest regulatory environment, and the deal would probably go through if it passes there.
Opposing the deal are the European steelmakers' lobbying group Eurofer, which includes steel producing giants like Germany's ThyssenKrupp (OTC:TYEKF) and ArcelorMittal (NYSE:MT).
After the meeting, which will be near the end of October, the European Commission will make a decision on whether to allow the $116 billion venture to proceed.
What will be determined is if it is anti-competitive or not.
Both companies will keep their marketing operations separate, which they say should help with competitive concerns.
While a number of other countries are also reviewing the deal, Europe is considered the toughest regulatory environment, and the deal would probably go through if it passes there.
Opposing the deal are the European steelmakers' lobbying group Eurofer, which includes steel producing giants like Germany's ThyssenKrupp (OTC:TYEKF) and ArcelorMittal (NYSE:MT).
Tuesday, October 5, 2010
Rio (NYSE:RTP) Abandoning $120 Billion Deal with BHP (NYSE:BHP), Says The Age
Australian media outlet The Age, reported today that the board of Rio Tinto (NYSE:RTP) is poised to abandon its pursuit of a $120 billion iron-ore joint venture with fellow mining giant BHP Billiton (NYSE:BHP). The Age didn't cite the sources of their information.
Reportedly the board of directors of Rio felt the deal may be more favorable to BHP than it was to them. That also could have been somewhat of a forced conclusion because of pressure from some of the shareholders of Rio concerning the deal.
The overall purpose of the deal was to be to streamline costs, which were estimated to save the companies about $10 billion.
That would have come from the combining of operations in the Pilbara region of Australia.
The deal is being examined by regulators to attain approval at this time.
No comments have come yet from either company in reference to the assertions, but that shouldn't take long to confirm and deny.
Reportedly the board of directors of Rio felt the deal may be more favorable to BHP than it was to them. That also could have been somewhat of a forced conclusion because of pressure from some of the shareholders of Rio concerning the deal.
The overall purpose of the deal was to be to streamline costs, which were estimated to save the companies about $10 billion.
That would have come from the combining of operations in the Pilbara region of Australia.
The deal is being examined by regulators to attain approval at this time.
No comments have come yet from either company in reference to the assertions, but that shouldn't take long to confirm and deny.
Monday, October 4, 2010
BHP (NYSE:BHP), Rio Tinto (NYSE:RTP) Joint Venture on Hold
With the controversial mineral tax of the Australian government still hanging in the air, the joint venture between BHP Billiton Ltd.(NYSE:BHP) and Rio Tinto (NYSE:RTP) looks like it'll be delayed.
The highly anticipated $116 billion JV between the two mining giants is for the production of iron ore.
Both companies have a lot on their plate since the joint venture agreement, as BHP is attempting to acquire fertilizer giant Potash Corp. (NYSE:POT), and Rio Tinto has invested in some existing projects, including increasing their stake in Ivanhoe Mines (NYSE:IVN), and investing in their current projects with Argyokle Diamond Mine and Pilbara iron-ore mine.
They also signed a deal with Aluminum Corporation of China Limited – Chinalco to operate and develop their Simandou iron ore asset in Guinea.
Although the BHP, Rio deal has somewhat fallen out of the public eye, it has great possibilities for both companies to lowers costs and increase production going forward.
The highly anticipated $116 billion JV between the two mining giants is for the production of iron ore.
Both companies have a lot on their plate since the joint venture agreement, as BHP is attempting to acquire fertilizer giant Potash Corp. (NYSE:POT), and Rio Tinto has invested in some existing projects, including increasing their stake in Ivanhoe Mines (NYSE:IVN), and investing in their current projects with Argyokle Diamond Mine and Pilbara iron-ore mine.
They also signed a deal with Aluminum Corporation of China Limited – Chinalco to operate and develop their Simandou iron ore asset in Guinea.
Although the BHP, Rio deal has somewhat fallen out of the public eye, it has great possibilities for both companies to lowers costs and increase production going forward.
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