Atlas Iron Limited (AGO); BC Iron Limited (BCI); Fortescue Metals Group Limited (FMG); Mount Gibson Iron Limited (MGX); Rio Tinto Limited (RIO):
Iron ore industry consultants are urging Australia’s producers to remain disciplined as they prepare to develop the next generation of mines at a time when strong iron ore prices are forecast to soften. Most Australian iron ore producers are expected to begin loosening their purse strings and investing in new development projects this year, buoyed by higher prices and driven by the need to replace dwindling reserves. Rio Tinto has taken the first steps in the development of the $US338 million ($445 million) final stage of its Silvergrass mine, BHP Billiton is studying the potential for its large South Flank project, which could replace its major Yandi operation, and Fortescue Metals Group is working towards a decision on a replacement option for its Firetail mine. Meanwhile the industry’s junior players – BC Iron, Atlas Iron and Mount Gibson Iron – are plotting expansions, new mines or restarts and new players such as New Zealand’s Todd Corporation and United Arab Emirates company Al Rawda Resources have entered the industry.
BHP Billiton Limited (BHP):
BHP Billiton’s former base metals president, Diego Hernandez, has criticised the management of the Escondida copper mine and the mine workforce for failing to find a mutually beneficial outcome from a strike that lasted more than six weeks. The 44-day strike technically ended in recent days when mine workers and their union invoked a clause dubbed ‘‘Article 369’’ that allows them to resume work on their existing pay and conditions for a further 18 months. But despite the workers invoking the clause, Escondida management indicated the mine had not yet resumed production and the schedule for a restart remains unclear. The company said there would be a ‘‘gradual reincorporation’’ of workers, suggesting it was not in a hurry to restart. The negotiation will now be pushed back to late 2018, and workers surrender any cost-of-living pay rises and settlement bonuses. Escondida is 57.5 per cent owned by BHP, with Rio Tinto owning 30 per cent and several Japanese corporations owning the balance. The mine is operated by a Chilean joint venture vehicle named Minera Escondida.
Myer Holdings Limited (MYR):
Veteran retailer Solomon Lew is set to emerge kingmaker in the event of a $1.3 billion takeover bid for Myer after snapping up a 10 per cent blocking stake in the department store. While Myer waits to learn the identity of the share raider who took the stake on Monday, fingers were pointed at Mr Lew, a major supplier to Myer, who has much to lose in a change in ownership, and has been stalking the retailer for a decade. Veteran retailer Solomon Lew is set to emerge as kingmaker in the event of a $1.3 billion takeover bid for Myer after snapping up a 10 per cent blocking stake from the department store chain’s largest shareholders. While Myer waits to learn the identity of the share raider who snatched at least 82 million shares on Monday, fingers were pointed at Mr Lew, who is a major supplier to Myer, has much to lose in the event of a change in ownership, and has been quietly stalking the retailer for a decade.
Telstra Corporation Limited (TLS):
The Federal Court has dismissed an action by Telstra attempting to stop the competition regulator cutting the price rivals pay for having access to its copper network. The legal tussle, which dates back to a 2015 decision by the Australian Competition and Consumer Commission for a one-off 9.4 per cent decrease in wholesale prices for fixed-lined services between 2015 and 2019, was ruled on Tuesday evening. Telstra had argued prices should rise by 7.2 per cent before the ACCC’s decision as a means of funding the continued operation of the copper network, because it faced sliding revenue from the rollover to the national broadband network.
Woolworths Limited (WOW):
Woolworth’s chief executive Brad Banducci has warned that rising energy costs will eventually force the food giant to increase grocery prices. Mr Banducci, speaking at a business forum in Melbourne yesterday, said while Woolworths was trying a range of strategies to cut energy costs, including installing energy efficient lighting and refrigeration, energy cost rises would more than outweigh these savings. ‘‘We manage what we can manage with energy efficiency. But given the cost increases that are coming through right now, we are trying to outrun a bear, but I am not sure we can,’’ Mr Banducci said. ‘‘We will have to in some way, very cautiously and carefully, pass those through to our customers, unfortunately.’’
Worleyparsons Limited (WOR):
WorleyParsons executives have tried to glean more information on the Dar Group’s intentions following last month’s share raid by meeting the Dubai-based engineering group. WorleyParsons chief executive Andrew Wood and Chairman John Grill are in the Middle East to see clients, and are understood to have met Dar officials this week in Dubai. Dar snapped up 13.3 per cent of the Australian group in February and is now its largest shareholder. Mr Grill previously met Dar’s chairman and chief executive, Talal Shair, when he flew to Sydney in November to broach a potential takeover, which WorleyParsons knocked back. The two men also met informally in Dubai in early 2016, but WorleyParsons hasn’t worked together with Dar on projects.
(Source: AIMS)
Iron ore industry consultants are urging Australia’s producers to remain disciplined as they prepare to develop the next generation of mines at a time when strong iron ore prices are forecast to soften. Most Australian iron ore producers are expected to begin loosening their purse strings and investing in new development projects this year, buoyed by higher prices and driven by the need to replace dwindling reserves. Rio Tinto has taken the first steps in the development of the $US338 million ($445 million) final stage of its Silvergrass mine, BHP Billiton is studying the potential for its large South Flank project, which could replace its major Yandi operation, and Fortescue Metals Group is working towards a decision on a replacement option for its Firetail mine. Meanwhile the industry’s junior players – BC Iron, Atlas Iron and Mount Gibson Iron – are plotting expansions, new mines or restarts and new players such as New Zealand’s Todd Corporation and United Arab Emirates company Al Rawda Resources have entered the industry.
BHP Billiton Limited (BHP):
BHP Billiton’s former base metals president, Diego Hernandez, has criticised the management of the Escondida copper mine and the mine workforce for failing to find a mutually beneficial outcome from a strike that lasted more than six weeks. The 44-day strike technically ended in recent days when mine workers and their union invoked a clause dubbed ‘‘Article 369’’ that allows them to resume work on their existing pay and conditions for a further 18 months. But despite the workers invoking the clause, Escondida management indicated the mine had not yet resumed production and the schedule for a restart remains unclear. The company said there would be a ‘‘gradual reincorporation’’ of workers, suggesting it was not in a hurry to restart. The negotiation will now be pushed back to late 2018, and workers surrender any cost-of-living pay rises and settlement bonuses. Escondida is 57.5 per cent owned by BHP, with Rio Tinto owning 30 per cent and several Japanese corporations owning the balance. The mine is operated by a Chilean joint venture vehicle named Minera Escondida.
Myer Holdings Limited (MYR):
Veteran retailer Solomon Lew is set to emerge kingmaker in the event of a $1.3 billion takeover bid for Myer after snapping up a 10 per cent blocking stake in the department store. While Myer waits to learn the identity of the share raider who took the stake on Monday, fingers were pointed at Mr Lew, a major supplier to Myer, who has much to lose in a change in ownership, and has been stalking the retailer for a decade. Veteran retailer Solomon Lew is set to emerge as kingmaker in the event of a $1.3 billion takeover bid for Myer after snapping up a 10 per cent blocking stake from the department store chain’s largest shareholders. While Myer waits to learn the identity of the share raider who snatched at least 82 million shares on Monday, fingers were pointed at Mr Lew, who is a major supplier to Myer, has much to lose in the event of a change in ownership, and has been quietly stalking the retailer for a decade.
Telstra Corporation Limited (TLS):
The Federal Court has dismissed an action by Telstra attempting to stop the competition regulator cutting the price rivals pay for having access to its copper network. The legal tussle, which dates back to a 2015 decision by the Australian Competition and Consumer Commission for a one-off 9.4 per cent decrease in wholesale prices for fixed-lined services between 2015 and 2019, was ruled on Tuesday evening. Telstra had argued prices should rise by 7.2 per cent before the ACCC’s decision as a means of funding the continued operation of the copper network, because it faced sliding revenue from the rollover to the national broadband network.
Woolworths Limited (WOW):
Woolworth’s chief executive Brad Banducci has warned that rising energy costs will eventually force the food giant to increase grocery prices. Mr Banducci, speaking at a business forum in Melbourne yesterday, said while Woolworths was trying a range of strategies to cut energy costs, including installing energy efficient lighting and refrigeration, energy cost rises would more than outweigh these savings. ‘‘We manage what we can manage with energy efficiency. But given the cost increases that are coming through right now, we are trying to outrun a bear, but I am not sure we can,’’ Mr Banducci said. ‘‘We will have to in some way, very cautiously and carefully, pass those through to our customers, unfortunately.’’
Worleyparsons Limited (WOR):
WorleyParsons executives have tried to glean more information on the Dar Group’s intentions following last month’s share raid by meeting the Dubai-based engineering group. WorleyParsons chief executive Andrew Wood and Chairman John Grill are in the Middle East to see clients, and are understood to have met Dar officials this week in Dubai. Dar snapped up 13.3 per cent of the Australian group in February and is now its largest shareholder. Mr Grill previously met Dar’s chairman and chief executive, Talal Shair, when he flew to Sydney in November to broach a potential takeover, which WorleyParsons knocked back. The two men also met informally in Dubai in early 2016, but WorleyParsons hasn’t worked together with Dar on projects.
(Source: AIMS)
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