Resources news
A new report by the Minerals Council of Australia has cautioned the mining industry on Australia’s high labour costs that are among the highest in the world. Thermal Coal projects were 66 per cent more expensive when capital costs were accounted for and iron ore projects were also 30 per cent more expensive compared to the global average.
Resource & energy exports forecast to fall
The value of resources and energy exports has been forecast to fall for the first time since fiscal 2009. The Australian Government’s Bureau of Resources and Energy Economics expects export earnings to drop 2 per cent to $189 billion in the current financial year, down from an increase of 8 per cent last year. Energy and Resources Minister Martin Ferguson says this is the end of the current cycle of high commodity prices but this inescapable reality should not be a cause for great alarm or pessimism about Australia's economy.
Agriculture demand remains strong
The government's commodity forecaster expects the value of rural exports to dip 1 per cent in the current financial year but remain 21 per cent stronger than the five-year average. According to the Australian Bureau of Agricultural and Resource Economics and Sciences September quarter agricultural commodities report demand for Australia's rural exports continues to be underpinned by Asian demand growth and higher export prices for grains and oil seeds.
Takeovers
CGA Mining Limited
(ASX:CGX) has reportedly received a takeover offer from Canadian gold producer B2Gold. The bid values CGA at about $1 billion and would follow a consolidation in the gold sector following the acquisition of Integra Mining by Silver Lake Resources Limited
(ASX:SLR).
Exco Resources
(ASX:EXS) has accepted Washington H. Soul Pattinson and Co. Limited's
(ASX:SOL) takeover offer worth about $95 million. The Australian copper and gold miner's board will recommend the offer to shareholders which was increased from 19 to 26.5 cents per share. Soul Pattinson, who already has a 19.9 per cent stake in Exco, pays royalties to the company from revenues generated from its copper project in Queensland. The revised offer requires a minimum of 90 per cent approval from shareholders.
Contract wins
Engineering and construction services provider Forge Group Limited
(ASX:FGE) has won its second contract from Rio Tinto Limited
(ASX:RIO) this month worth $70 million, to design and construct fuel infrastructure at two of Rio’s iron ore mines in the Pilbara region of Western Australia.
LogiCamms Limited
(ASX:LCM) has been awarded more than $10 million worth of contracts from a joint venture between Origin Energy Limited
(ASX:ORG), ConocoPhillips and Sinopec. The engineering company will work on one of the largest coal terminals in Australia, the Wiggins Island Coal Export Terminal and the Australia Pacific LNG project in Queensland.
Leighton Holdings Limited's
(ASX:LEI) engineering subsidiary Thiess has secured a $134 million contract from oil and gas contractor Saipem Australia Pty Ltd to construct a tunnel for the Santos GLNG project in Gladstone. The tunnel will connect the mainland to the Santos plant on Curtis Island. Separately, the company announced Leighton’s Middle Eastern division Habtoor Leighton Group scored a $US316 million healthcare contract to construct new medical centres in Saudi Arabia.
Iron ore miners
Northern Iron Limited
(ASX:NFE) has advised both of its suitors continue to conduct due diligence and the iron ore miner expects the detailed stage two due diligence process to be completed within weeks. Northern Iron is currently being pursued by Swiss-based Prominvest and India's Aditya Birla Group and says both companies have attended site visits to the operation in Norway over the last two weeks.
Fortescue Metals Group Limited
(ASX:FMG) has secured a new debt facility of up to $US4.5 billion maturing in five years. The facility, which has been fully underwritten by Credit Suisse and JP Morgan, will be used to refinance all existing bank facilities and provide the iron ore miner with additional liquidity. Fortescue says it is also considering partnering in a number of its assets after approaches had been made by unidentified parties. Separately, the iron ore miner announced it has moved closer to gaining access to BHP Billiton Limited's
(ASX:BHP) and Rio Tinto Limited's
(ASX:RIO) Pilbara rail network after winning an appeal in the High Court of Australia.
Projects
Galaxy Resources Limited
(ASX:GXY) has filed an Environmental and Social Impact Statement for its 70 per cent owned Sal de Vida Lithium and Potash Brine Project in Argentina. The lithium mining, chemicals and battery company acquired a majority stake in the project as part of its $109 million merger with Canadian lithium and potash exploration and development company, Lithium One, earlier this year.
Sandfire Resources NL
(ASX:SFR) has announced the commissioning of the processing facility at its wholly owned DeGrussa Copper-Gold Project in Western Australia is underway. The miner says it is now is a position to complete commissioning and ramp-up of the project to a steady-state nameplate operation, in line with the schedule and budget outlined in the Definitive Feasibility Study.
