Rare earths mining has been dominating the headlines this past week, including government quotas in China and the West Australian government’s royalty on rare earths.
Resources and mining companies making news include Caltex posting a loss of more than $700 million for the year, Newcrest’s shares start trading on the Toronto Stock Exchange, New Hope abandoning plans to put itself up for sale, Gloucester Coal swings to a loss and Atlas Iron’s profit drops.
Resources NewsChina, responsible for producing around 90 per cent of the world’s rare earths, is likely to double exports this year as lower prices stimulate demand. In the first 11 months of last year Chinese exports were 49 per cent of the government quota due to slowing demand. China has curbed rare earths exports since 2009 to protect the environment and conserve mining resources. Reducing exports had increased the price, promoting concerns internationally about access to the much needed rare earths.
The West Australian government has announced it will impose a 2.5 per cent royalty on rare earths. The West Australian government assumes a base rate royalty of 10 per cent of the value of the commodity in the ground. The rate is adjusted according to processing, with gold and rare earths having a 2.5 per cent rate and standard iron ore shipments, 7.5 per cent. The federal government has said it will refund mining companies’ royalties as part of its mining tax, but as that tax only applies to iron ore and coal, rare earths miners will not benefit.
Caltex writedowns hit profits Caltex Australia Limited
(ASX:CTX) has posted a loss of $714 million for the year ended December 31, 2011 compared to a full year profit of $317 million in the 2010 financial year. The drop has been attributed to the oil refiner’s write-down of its refinery assets due to the strength of the Australian dollar and rising costs. In the 2011 calendar year revenue rose 18 per cent to $22.4 billion. A fully franked final dividend of 28 cents per share has been declared.
Newcrest lists on Toronto stock exchangeNewcrest Mining Limited (ASX:NCM, POMSoX: NCM) shares have started trading on the Toronto Stock Exchange (TSX). Chief executive Greg Robinson said the TSX is one of the most active markets in the world for gold producers.
“A secondary listing offers Newcrest greater exposure to the global investment community and an opportunity to attract a new group of investors,” added Mr Robinson.
Newcrest is now the fourth largest mining company on the exchange, and the 17
th largest company. In conjunction with the listing, Newcrest’s head of investor relations, Steve Warner is relocating to North America to improve access for North American and European investors. Kim Kerr, based in Melbourne, will lead investor relations in Australia, Asia and the Pacific.
New Hope takes down “for sale” signNew Hope Corporation Limited
(ASX:NHC) says it has abandoned plans to put itself up for sale. The Queensland coal producer put itself up for sale in October last year after receiving preliminary takeover offers. After granting due diligence to a number of third parties, New Hope says discussions have not produced a definitive proposal which appropriately reflects the company’s strategic value and growth prospects. As a result New Hope has decided to terminate the sales process, but says it continues to remain confident in its robust growth pipeline. New Hope expects to generate a net profit of between $96 million and $101 million for the first half of its 2012 financial year.
Gloucester swings to profitGloucester Coal Limited
(ASX:GCL) has swung from a profit to a first half net loss of $37 million for the last six months of 2011, weighed down by weaker demand for its products. The coal company believes the results reflect a difficult and challenging period which was one of transition. Gloucester says significant achievements in the half year include the acquisition and integration of the Donaldson and Monash businesses and the establishment of mining operations at Middlemount.
Atlas Iron profit plungesAtlas Iron Limited
(ASX:AGO) has posted a first half net profit of $6.8 million in the six months to December 31, 2011 dropping 80 per cent from the year before. The result has been partly attributed to write-downs of about $69 million in the asset value of the Balla Balla and Yerecoin magnetite projects. On an underlying basis the company’s profit rose 77.5 per cent to $62.2 million. The iron ore producer says it expects cash costs for fiscal 2012 to remain within guidance of between $43 to $45 per tonne. The company is on target to ship up to 5.7 million tonnes of iron ore.
Melissa Beaumont Lee
