Falling iron ore and coking coal prices have been blamed for a drop in the Reserve Bank of Australia’s (RBA) commodity price index last month. The index fell 1.3 per cent in February to a 47-month low, extending a decline of 1.6 per cent the prior month. However the RBA says an increase in the price of gold partially offset last month’s read and many rural commodities also enjoyed price gains while base metals fell. Over the year the index has shed 12 per cent with the RBA noting most commodities have fallen over the period.
Gold output climbs to 10-year high
Australia’s gold production has climbed to the 10 year high, according to Surbiton Associates. The mining consultant reports output rose 18 metric tonnes to 273 tonnes in 2013, representing the strongest figure since 2003. Surbiton director Sandra Close says, “Producers are responding to lower gold prices by treating less low-grade material and this results in higher output and reduced costs”.
Annual gold price fall puts miners under pressure
Silver Lake sinks after capital raising
Shares in Silver Lake Resources Limited
(ASX:SLR) sank after completing a capital raising at the end of last week. The gold producing company raised about $39 million which will be partially put to placing its Murchison mining area on care and maintenance. Silver Lake will invest the remainder of the capital into its Mount Monger growth projects and general working capital.
Northern Star H1 profit drops
Northern Star Resources (ASX: NST) has posted a 66 per cent first half profit drop but remained profitable and maintained its dividend. The gold producer generated an interim profit of $7.6 million as a fall in the gold price was offset by increased production at its Paulsens Gold Mine in Western Australia. .
Earnings season wraps up
AMP Limited’s
(ASX:AMP) AMP Capital Investors Head of Investment Strategy and Chief Economist, Dr Shane Oliver says resources and banks played a bigger role in driving growth over the reporting season just gone. Mr OIiver says key themes include a massive turnaround for resources stocks such as BHP Billiton Limited
(ASX:BHP) and Rio Tinto Limited
(ASX:RIO), good results from the Big Four Banks, ongoing cost control, improvement from some cyclicals and strong growth in dividends.
Mining contract awards & cuts
BHP cuts Macmahon services
BHP Billiton Limited (ASX:BHP, LON:BLT) has cut mining services currently being undertaken by Macmahon Holdings Limited
(ASX:MAH) at one of its Pilbara iron ore mines and will instead manage the mine itself. The world's largest mining company has told Macmahon operations currently being undertaken by the mining services company at its mine called Orebody 18 in the Pilbara region of Western Australia will be taken in-house.
Rio awards Viento contact
Mining giant Rio Tinto Limited
(ASX:RIO) has awarded a joint venture between Viento Group Limited
(ASX:VIE) and an indigenous company a contract worth about $5 million. Viento says the works contract is part of Rio’s Nammuldi mine expansion in the Pilbara region of Western Australia. The joint venture will perform road maintenance grading, irrigation pivot clearing and road construction.
Downer wins Whitehaven contract
Coal miner Whitehaven Coal Limited
(ASX:WHC) has awarded engineering company Downer EDI Limited
(ASX:DOW) worth $100 million. Under the contract Downer will construct the structures, building, facilities, equipment and services for Whitehaven’s Maules Creek Coal Handling and Processing Plant in the Gunnedah basin of New South Wales.
UGL scores Ichthys contract
Engineering company UGL Limited
(ASX:UGL) had scored a $740 million contract as part of a JV for the structural, mechanical and piping construction package for the Ichthys LNG project in Darwin. The joint venture between UGL and Kentz Corporation will see the companies provide installation for process trains and commissioning services for facilities including the gas processing plant at Blaydin Point.
