Australian Mining https://www.australianmining.com.au Australia's home for mining industry news Fri, 20 Jan 2017 02:38:55 +0000 en-AU hourly 1 https://wordpress.org/?v=4.7.1 Moody’s lifts Fortescue rating on back of iron ore strength https://www.australianmining.com.au/news/moodys-lifts-fortescue-rating-on-back-of-iron-ore-strength/ https://www.australianmining.com.au/news/moodys-lifts-fortescue-rating-on-back-of-iron-ore-strength/#respond Fri, 20 Jan 2017 02:38:55 +0000 https://www.australianmining.com.au/?p=164313 Moody’s Investor Service has upgraded Fortescue Metals Group’s (FMG) credit ratings amid a higher iron ore price.

The investor group has increased FMG’s corporate family rating from Ba2 to Ba1; its senior secured rating from Ba1 to Baa3; and its senior unsecured rating from B1 to Ba2. The firm has also confirmed a stable outlook on all the company’s ratings.

The upgrades have been attributed to the strong iron ore price, which has breached $US80 twice within the past two months.

“Fortescue has been able to capitalise on higher iron ore prices and utilise the incremental cash flow generated to make sustainable improvements to its balance sheet and debt levels,” Moody’s said.

The firm added that the upgrade reflected its expectation that FMG’s ongoing debt reduction would enable it to “maintain conservative financial metrics for the rating” even during lower iron ore prices.

FMG CEO Nev Power attributed the company’s cost reduction to its productivity and efficiency initiatives, with free cash flows adding to its debt repayments.

“We are pleased that Moody’s have acknowledged the strength of Fortescue’s balance sheet through the continued execution of our debt repayment strategy and upgraded the company’s credit ratings, including the senior secured rating which now has an investment grade rating of Baa3,” Power said.

S&P Global Ratings also increased FMG’s credit ratings late last year after the company reduced its debt by another $US1 billion ($1.36 billion).

It raised the company’s credit rating from BB to BB+.

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BHP, Vale negotiate Samarco clean up costs https://www.australianmining.com.au/news/bhp-vale-negotiate-samarco-clean-up-costs/ https://www.australianmining.com.au/news/bhp-vale-negotiate-samarco-clean-up-costs/#respond Fri, 20 Jan 2017 01:59:28 +0000 https://www.australianmining.com.au/?p=164308 Vale, BHP Billiton Brazil and Samarco have entered a preliminary agreement with Brazil’s Federal Prosecutors’ Office over remediation fees following the Samarco tailings dam failure in 2015.

The preliminary agreement includes a process and timeline to negotiate and settle the 155 billion Brazilian reals (US$47.5 billion) civil claim relating to the dam failure.

The tailings disaster, which killed 19 and created flooding and environmental damage in southeast Brazil, was blamed on the dam’s drainage and design flaws.

The preliminary agreement comes after the three companies signed a previous ‘framework agreement’ for remediation programs and compensation following the failure. Under it, the companies will provide a 2.2 billion Brazilian reals ($US675 million) interim security payment for rehabilitation programs, subject to court approval.

It will provide for the appointment of experts to advise the prosecutors of the social and economic impacts caused by the failure, as well as ongoing monitoring and assessment programs. It also includes an advanced payment of 200 million Brazilian reals ($US60 million) to fund programs in the Barra Longa, Rio Doce, Santa Cruz do Escalvado and Ponte Nova municipalities.

The companies will provide extensive studies and research to the expert advisors.

Once the advisors make their conclusions, the federal prosecutors will take these into consideration, until a final settlement is made on June 30 2017.

In addition to the agreement, two previous civil and criminal claims by the federal prosecutors were suspended.

Earlier this week, Brazilian mines and energy minister Fernando Coelho suggested the Samarco iron ore operations could restart in two months.

However, this is still in doubt as the joint venture is subject to a range of environmental and regulatory approvals.

“Any restart of operations at Samarco is subject to a separate set of negotiations with relevant parties and will occur only if it is safe, economically viable and has the support of the community,” BHP said.

“Resuming operations would require government approvals, the granting of licenses by state authorities, the restructure of Samarco’s debt, and the completion of commercial arrangements with Vale regarding the use of its infrastructure.”

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Boyne aluminium smelter poised to slash workforce, lower production https://www.australianmining.com.au/news/boyne-aluminium-smelter-poised-to-slash-workforce-lower-production/ https://www.australianmining.com.au/news/boyne-aluminium-smelter-poised-to-slash-workforce-lower-production/#respond Fri, 20 Jan 2017 00:43:42 +0000 https://www.australianmining.com.au/?p=164293 Rio Tinto’s Boyne Smelters (BSL) is set to announce a round of job cuts after it revealed plans to reduce production.

The aluminium smelter in Gladstone, Queensland is cutting back on production as a result of high electricity prices.

It plans to reduce production by eight per cent through progressively decreasing up to 80MW of power from its production circuit. The production cutback will slash up to $110 million worth of aluminium production The Australian reports –  a loss of about 45,000 tonnes of aluminium production for 2017.

Approximately 85 per cent of BSL’s electricity comes from its contract with Gladstone Power Station; the other 15 per cent from the spot market. Spot electricity prices shot up to between $12-$14,000MWh over the weekend, from its $66.80MWh average the weekend before.

“Due to sustained high pricing this year, almost three times higher than the 2016 average, BSL is unable to maintain full production,” the company said in a statement.

“As a result, the decision to activate a carefully managed curtailment has become necessary.”

BSL general manager Joe Rea said it was the second time in three years the company had significantly reduced production because of high electricity prices.

“BSL is paying more than 500 times more than what it costs to generate electricity,” he said.

“The decision to curtail production is a very difficult one. It takes months, not weeks, to bring the smelter back to a stable full capacity, and that can only happen if and when power prices become competitive.

“BSL has been unable to secure an internationally competitive price for our additional load. We are not prepared to lock into a contractual arrangement that would have us paying delivered energy prices comparable to the least competitive countries in the world outside of China.”

He added that it came at a time when current Australian price for aluminium is lower than its was during the global financial crisis.

However, Queensland’s state-owned power supply company Stanwell suggested the fault remained with Rio itself, which did not accept previous power contracts it was offered.

Stanwel CEO Richard Van Breda said, “If Boyne had accepted one of the many offers presented to it, not only would it have avoided the current volatility in spot prices but it would have been in a better financial position, as the contract prices offered are now at a significant discount to the spot market.”

Around 1000 people work at the operations, with more than half of the smelter’s economic benefit remaining in the Gladstone region.

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Mining moves: Doray Minerals appoints new managing director, and more https://www.australianmining.com.au/news/mining-moves-doray-minerals-appoints-new-managing-director-and-more/ https://www.australianmining.com.au/news/mining-moves-doray-minerals-appoints-new-managing-director-and-more/#respond Thu, 19 Jan 2017 22:55:21 +0000 https://www.australianmining.com.au/?p=164273 Australian Mining brings readers the latest corporate appointments and departures in the local and international mining industry.

Leigh Junk has been appointed managing director of gold company Doray Minerals after being the interim holder of the position since November 2016. Junk is a mining engineer with 25 years’ experience. He has served on the board of Doray as a non-executive director since 2011 and held several senior roles at Western Australian mining companies during his career.

In other corporate news at Doray, Peter Lester has retired as chairman of the company to pursue other business interests. During Lester’s two-and-a-half years in the role, Doray acquired the Deflector gold project, funded its development and became a multi-mine producer.

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As reported by Australian Mining earlier this week, Fortescue Metals Group has appointed Elizabeth Gaines as its chief financial officer, effective February 6. Gaines is formerly the chief executive officer of tourism company, Helloworld. She is also currently a director on Fortescue’s board.

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Robert Bell has resigned as chairman of Atrum Coal due to ongoing medical concerns. As Atrum searches for a suitable replacement, Alan Ahlgren will oversee the operations of the company.

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Atlas Copco has appointed Mats Rahmström as the new president and CEO of the Swedish equipment manufacturer. Rahmström will replace Ronnie Leten, who has requested to leave the position after eight years in the role.

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Moreton Resouerces subsidiary, MRV Metals, has appointed Nigel Slonker as its CEO, with a primary focus of advancing its Granite Belt project. Slonker is an experienced and well-qualified mining professional, having held several senior roles in Australia and New Zealand.

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Vector Resources has made several appointments following the recent acquisition of the Maniema gold project, including Simon Youds as CEO, Peter Stockman as senior consulting geologist and Jason Brewer as a director.

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Rockwell Automation has named Patrick Goris its new CFO and senior vice-president. Goris succeeds Theodore Crandall, who has been appointed senior vice-president, control products and solutions.

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Wang Chiwei has been appointed as a non-executive director of copper company CuDeco. Wang has extensive experience in financial management. He was formerly the general manager of Hainan Marketing and vice-president of China Nonferrous-Metals’ Shanghai smelter.

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Rio Tinto’s latest Amrun contract to create 150 jobs in Queensland https://www.australianmining.com.au/news/rio-tintos-latest-amrun-contract-to-create-150-jobs-in-queensland/ https://www.australianmining.com.au/news/rio-tintos-latest-amrun-contract-to-create-150-jobs-in-queensland/#respond Thu, 19 Jan 2017 22:36:39 +0000 https://www.australianmining.com.au/?p=164276 Rio Tinto has awarded a $70 million bulk earthworks contract to civil engineering company QBirt for the development of mine infrastructure at the Amrun bauxite project in northern Queensland.

At its peak the contract will generate 150 jobs and help support ongoing employment for the existing workforce of 1400 people at Weipa’s bauxite operations, according to Rio Tinto.

Earthworks required for the construction of the project include about 40 kilometres of sealed access roads and a haul road network. Queensland-based QBirt will also develop the mine stockpile zone, tailings and separation ponds and other site infrastructure.

Construction is expected to start in the current quarter and finish by the end of 2018.

Rio Tinto growth and innovation group executive Stephen McIntosh said the roads and infrastructure to be developed by QBirt were essential to the future Amrun operation.

“We are very pleased that a Queensland-based business has won this important work ahead of other competitive bidders,” McIntosh said.

“QBirt not only brings more than 30 years’ experience in the industry, but shares our commitment to developing a strong and sustainable safety culture at Amrun.”

The contract extends QBirt’s relationship with Rio Tinto. The Queensland company is currently undertaking construction of a tailings facility at Rio Tinto’s Yarwun alumina refinery and previously constructed 300,000 cubed metres of embankment and seven kilometres of mine haul roads at the Weipa bauxite mine.

QBirt managing director Quentin Birt commented: “After the success of our accelerated construction mine haul road network at Weipa, this new Amrun contract only strengthens our long-term relationship with Rio Tinto.”

The Queensland Government welcomed the award of the contract to a local company, adding that the Amrun project would support the continued employment of the workers in Weipa, as well as the 2000 employees at the Yarwun and Queensland Aluminium refineries in Gladstone fed with the bauxite.

“This project builds on Rio Tinto’s long-standing existing operations in Gladstone and Weipa which have supplied the raw product used to produce 10 per cent of the world’s aluminium,” acting state development minister Bill Byrne said.

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