Resources and mining companies making news include Fortescue lodging a High Court challenge against the Minerals Resource Rent Tax, Downer EDI is awarded a contract to build trains for Fortescue Metals, BHP Billiton gives the green light to a $US845 million investment, Sundance Resources says it has received copies of court process issued in Cameroon and Rio Tinto announces it will commit $US4.2 billion to develop its tier one iron ore business.
Fortescue’s High Court challenge
Pilbara focussed iron ore miner Fortescue Metals Group Limited (ASX:FMG) has lodged a challenge in the High Court of Australia against the Minerals Resource Rent Tax (MRRT). The Federal Government says the MRRT is a tax on certain profits from new and existing iron ore and coal projects in Australia which will be imposed at a rate of 22.5 per cent from the July 1, 2012. Fortescue believes the tax unfairly gives preference to one state over another, contrary the constitution, and also restricts the state’s ability to encourage mining. Fortescue’s CEO Nev Power says the company believes it has a good case for challenging the tax on constitutional grounds and looks forward to the resolution by the High Court.
Downer wins Fortescue train contract
Downer EDI Limited (ASX:DOW), in partnership with Electro-Motive Diesel, has been awarded a contract to build trains for Pilbara focused iron ore miner Fortescue Metals Group Limited (ASX:FMG). The engineering company says the value of the project is worth more than $73 million and has an option to extend. Downer will work to design, build and deliver 19 locomotives to Fortescue with the first due in August this year. CEO Grant Fenn says the fleet of locomotives will provide Fortescue with extra haulage capability, fuel consumption improvements, exhaust emission benefits and reliability improvements.
BHP injects $US845M into NSW mine
BHP Billiton Limited (ASX:BHP) has given the green light for a $US845 million investment to sustain operations at its Illawarra Coal business in New South Wales. The global miner’s financial commitment will allow the establishment of a newer mining area at the Appin Mine, with the project already having received all necessary approvals. BHP says the investment sustains Illawarra Coal's production rates and recognises the value of its high quality metallurgical coal resources. Despite BHP executives last month warning the company will delay major project approvals, the Appin Area 9 project is intended to sustain output rather than boost it.
Sundance confirms legal proceedings in Cameroon
Sundance Resources Limited (ASX:SDL) says it’s received copies of court process issued in Cameroon on behalf of the families of the late board members who died two years ago in a plane crash. The miner is also aware of other claims reportedly filed in the Unites States. Both claims are for unspecified damages. Sundance says it will vigorously defend any actions.
Rio’s next steps
Rio Tinto Limited (ASX:RIO) has announced it will commit $US4.2 billion to develop its tier one iron ore business. Rio defended its iron ore expansion plans amid doubts over demand for the steel making commodity.
Chief executive Tom Albanese said, “We are directing investment to projects that will generate the most attractive returns to shareholders and are resilient under any probable macroeconomic scenario”.
Rio Tinto also announced it will inject $US660 million into a copper mine in the US to extend its life by 11 years. The global miner says the investment into the Kennecott Utah Copper Bingham Canyon mine will secure low cost copper, gold and molybdenum production for the next two decades.
The first results from the 2011 Census reveal the mining boom has shifted Australia’s population with the two largest mining states, Western Australian and Queensland growing significantly over the past five years. The population of Queensland grew by 11 per cent and Western Australia increased by 14 per cent. The population in the East Pilbara mining area grew by 83 per cent. The Australian Financial Review comments, “The resources boom is one of the key reasons for Australia’s growth in both wealth and population, and their uneven distribution”.