BHP’s Mackenzie vows ‘substantial’ cash returns to shareholders by June |
- BHP’s Mackenzie vows ‘substantial’ cash returns to shareholders by June
- Five major copper mines to begin operations in Peru by 2016
- McEwen Mining's president gives the BEST answer on why someone should consider a career in mining
- Rio Tinto to pay an extra $75 million in taxes on new rulings
- Gold prices to rally this week on Ukraine and China worries
- India’s Goa freezes third phase of iron ore e-auction
| BHP’s Mackenzie vows ‘substantial’ cash returns to shareholders by June Posted: 16 Mar 2014 11:00 AM PDT BHP Billiton (ASX, NYSE:BHP), the world's largest mining company, could launch a multi-billion-dollar return of cash to shareholders in less than three months, as it's boosting production from existing mines to feed Chinese demand. Interviewed by The Sunday Times of London, chief executive Andrew Mackenzie said talks about substantial shareholder rewards were "now becoming a practical one rather than a theoretical one". As it continues to sell off assets, BHP's boss reaffirmed he is targeting $5.5bn in cost cuts by the end of this year, while reducing net debt to $25bn. These measures are expected to open the way to an investor windfall at the June results. "When we get to that number ($25bn), we will have a serious and practical conversation on how we might increase cash returns to shareholders," Mackenzie was quoted as saying. The Anglo-Australian mining giant launched its last $10bn buyback program in 2011. In the last decade, BHP has paid out $62bn in buy-backs and dividends to shareholders, or about half the company's underlying earnings.  |
| Five major copper mines to begin operations in Peru by 2016 Posted: 16 Mar 2014 10:00 AM PDT  Construction camp at Constancia mine, the first top project to begin operations this year. Courtesy of Hudbay Minerals Five major copper mines, with an estimated investment of $13 billion, are expected to begin production in Peru before 2016, upping the country's output of the red metal from 1.3 million tonnes last year to 2.8 million tonnes. According to data provided by the Minister of Energy and Mines (MEM), and quoted by Gestión (in Spanish), the first one to begin mining is Hudbay Minerals' (TSX:HBM) $1.55bn Constancia project in Cusco, scheduled to start in August. Next year three other projects should come in stream: The $5.2 billion Las Bambas in March, Freeport McMoRan Copper & Gold's (NYSE: FCX) $4.4bn expansion of its Cerro Verde mine in August, and US miner Southern Copper's (NYSE: SCCO) Toquepala $900 million expansion in July. Southern Copper is also expected to finish work at its controversial $1 billion Tía María near Arequipa in March 2016. Copper, however, is by far the worst performer among metals so far this year and its fate is a real concern now. The red metal has already dropped 13% and futures dipped 9% last week to $6,380, from recent highs of $7,220 over the last few sessions, the lowest level since June 2010. Global copper producers —being Chile's Codelco the largest, followed by Freeport-McMoRan, Glencore Xstrata and BHP Billiton— plan expansions of mine capacity that would add between 1.1m tonnes and 1.3m tonnes of copper per year to the market until 2016. Such increases would be roughly equivalent to the annual output of Chile's Escondida, the world's largest mine, which provides about 5% of the world supply. Peru's steady growth in recent years has been largely driven by mineral production. Last year the country injected $9.7 billion to the local economy coming from mining, jumping 14% when compared to 2012. Authorities has said they expect to reach similar levels by the end of this year, as there is still there is plenty for everyone to get a descent piece of the resources pie. Peru holds13% of the world's copper reserves, 4% of gold, 22% of silver, 7.6% of zinc, 9% of lead and 6% of tin reserves, show official figures (in Spanish).
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| McEwen Mining's president gives the BEST answer on why someone should consider a career in mining Posted: 16 Mar 2014 08:55 AM PDT McEwen Mining's president discussed innovation, why the company has not cut back on exploration and why more young people should consider a career in mining. Ian Ball spoke with MINING.com in early March while he was preparing to meet shareholders before the Prospectors & Developers Association of Canada convention. McEwen Mining is gold and silver miner miner operating in the Americas. The company was founded by mining legend Rob McEwen, the founder and former Chairman and CEO of Goldcorp. McEwen Mining's stated goal is to qualify for inclusion in the S&P 500. While miners cut back on exploration expenses during the drop in commodity prices last year, Ball said McEwen Mining's (NYSE:MUX) programs were kept in place since the company believe that is how it would ultimately out-perform its peers. He pointed to the company's Gold Bar project. "In Nevada we have a property package near Barrick's Cortez Mine, which is the world's largest gold mine, and we are exploring there on a consistent basis," said Ball. Ball says exploration is a high risk, high return practice, but when the company has the world's biggest gold mine on your door step, the company will keep exploring. "If you look at the history of this industry whether it is Gold Strike for Barrick or Red Lake for Goldcorp, [exploration] has been one of the few ways you can generate real wealth for investors is through organic growth and that comes through exploration. "If you cut your exploration you just become a cash flow and people can easily quantify that, discount it and you are just a function of the gold price, so you got to break out of that and exploration is what delivers the value. The company is expecting a jump in silver from its El Gallo 1 mine this spring. "El Gallo 1 is a mine we have Sinaloa State Mexico. We are expanding that now by 50% and that is going to be completed in April, and we are going to see that mine go from 40,000 oz of gold to 75,000 oz of gold next year, as well as seeing a big drop in cost from $750 on a cash cost basis to $575, because we have better economics with the expansion and we are having the grade double from one gramme a tonne to two grammes a tonne." Ball, who is in his early 30s, believes more people should look at mining as a career. Ball says the industry is also ripe for innovation and change, and the sector would benefit from a new perspective. "Why should someone youthful get into the mining industry? If you walk down University Avenue here in Toronto, you go to the Munk Cardiac Centre, you have the McEwen stem cell, you have Lassonde engineering program, the Schulich School of Business. All of that wealth came from mining. Regarding some immediate innovation that the industry could adopt, Ball picked out haul trucks and a shift to electric vehicles. "Most trucks use diesel to fuel themselves. If you can convert to all electric, [it's] two-thirds cheaper to generate the same amount of power than diesel." Ball says it costs $2 per tonne to transport rock using diesel. All electric could reduce the costs to $1 per tonne.  In 1995, York University's business school name received a major donation from Canadian billionaire Seymour Schulich. Image from Wikipedia The R.R. McEwen atrium of the Toronto General Hospital, southwest corner of the site, view from University Avenue. McEwen has dontated $20 million to establish the McEwen Centre for Regenerative Medicine at the Toronto General Hospital. Image from Wikipedia. |
| Rio Tinto to pay an extra $75 million in taxes on new rulings Posted: 16 Mar 2014 08:15 AM PDT  In Australia alone Rio paid last year around $15 million in mining duties. Mining giant Rio Tinto (ASX, LON, NYSE:RIO) may have to pay an extra US$75 million in annual tax compliance costs as new global reporting requirements in the US and European Union go in effect. In the miner's annual report on taxes paid, chief financial officer Chris Lynch voices the firm's frustration with the lack of international co-operation on tax transparency laws, which —he says— are likely to send compliance costs soaring by tens of millions of dollars for global companies. Lynch called governments to work together in adopting a consistent global approach to disclosure requirements and thresholds, naming the Dodd Frank Wall Street Reform Act in the US and Chapter 10 of accounting directive 2013/34 in the European Union as examples of changes Rio Tinto is concerned about. "A multitude of different reporting formats is unlikely to result in greater clarity and will impose additional costs upon companies, with little or no public benefit," Lynch said. In Australia alone the world's second-largest mining company has already spent around $15 million in mining duties. The sum is likely to increase five-fold if Rio is also forced to with multiple new tax transparency regimes. Image by Robyn Mackenzie/Shutterstock.com |
| Gold prices to rally this week on Ukraine and China worries Posted: 16 Mar 2014 07:23 AM PDT Gold prices are expected to build on its recent gains this week, as concerns over China's economy and the crisis in Ukraine will keep pushing the precious metal up, say 84% of the experts interviewed in the latest Kitco Gold Survey. From the 25 gold dealers, investment banks, futures traders, money managers and technical-chart analysts quizzed, 21 said they predicted gold prices to rise next week, while only two anticipated that prices would drop and two others forecasting prices to remain unchanged. Bullion prices closed at $1,382 on Friday, the highest level in six months, and the sixth straight weekly rise. Last week alone gold accumulated a 2% gain, which highlights the precious metal's role as a perceived haven from global turmoil. Gold for April delivery, the most active contract, gained $6.60 to settle at $1,379.00 a troy ounce on the Comex division of the New York Mercantile Exchange, up 3% on the week. This is the highest value reached since Sept. 9.
Traders are closely following Sunday's poll in Ukraine's Crimea region, as residents vote on whether to join Russia or become an effectively independent state connected to Ukraine. The results of this referendum, analysts agree, could further increase geopolitical tensions and hence affect gold prices. Preliminary results may come as soon as Sunday night local time, with experts expecting an overwhelming majority of votes pro-union with Russia. Image by Mstyslav Chernov/ Wikimedia Commons |
| India’s Goa freezes third phase of iron ore e-auction Posted: 16 Mar 2014 06:56 AM PDT
The Indian state of Goa is putting on hold the third phase of an iron ore e-auction launched last month, as prices for the steel-making material remain weak and don't show any strong signs of recovery. The commodity hit a 18-month low last week and, so far this year, has dropped nearly 17% as China's steel sector – which consumes more than two-thirds of the seaborne iron ore trade and forges almost as much steel as the rest of the world combined – adjust to slower growth in the world's second largest economy. Director of Goa Mines and Geology Department, Prasanna Acharya, told The Hindu that Goa has already sold over 1.7 million tons, and that the State will wait until market prices for iron ore stabilize, before proceeding with the third phase of the e-auction. Image: Goa flea market. |
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