Mining hurdles and wins

Resources Corner

Resources and mining companies making news include Galaxy Resources acquiring Lithium One, Origin Energy teams up with Xstrata, AGL’s planned purchase of the Loy Yang power station hits a hurdle, OneSteel will change its name to Arrium and Aquila wins an appeal against Vale.
 
Galaxy to acquire Canada’s Lithium One 
Lithium mining, chemicals and battery company Galaxy Resources Limited (ASX:GXY) has announced a friendly $109 million takeover of Canadian lithium and potash exploration and development company Lithium One. Galaxy says the merger will create a vertically integrated lithium company with Galaxy’s resource base receiving a boost through Lithium One’s $US1 billion Sal De Vida lithium potash project in Argentina. The deal has been unanimously backed by both company boards and Galaxy has urged its shareholders to vote in favour of the merger at its annual general meeting next month.
 
Managing Director Iggy Tan says the latest acquisition will give Galaxy the opportunity to become a major global lithium company.
 
“Galaxy will require more lithium resources over the next few years, and Sal de Vida along with James Bay will significantly add to our existing Australian resource inventory and gives us ample resources to continue to grow the lithium business,” said Mr Tan.
 
Origin teams up with Xstrata in Chile 
Origin Energy Limited (ASX:ORG) has acquired a majority 51 per cent stake in a hydroelectric power company in Chile called Energia Austral. The stake was purchased from Xstrata PLC (XTA.LN) Copper who will retain the remaining 49 per cent interest. Origin will progressively spend $US75 million on a feasibility study over the next three years and pour in an extra $US75 million towards a final investment decision if the project is deemed feasible. Origin says the investment is in line with its pursuit of renewable energy opportunities in markets with attractive growth options.
 
AGL power station purchase hits hurdle 
AGL Energy Limited’s (ASX:AGK) planned purchase of the Loy Yang power station in Victoria, from Japan’s Tepco, has hit a hurdle. The Australian Competition and Consumer Commission (ACCC) has suspended its clearance process until AGL provides it with more information. The ACCC has asked AGL to provide the information by April 18, 2012. AGL has a 32.5 per cent stake in Loy Yang and said in February it will raise $1.5 billion to partially finance the 100 per cent purchase of the power station.
 
OneSteel name change
Mining group OneSteel Limited (ASX:OST) intends to change its name to Arrium Limited. The company says a name change is a natural progression in order to reflect the expansion of its business in recent years. OneSteel says it no longer sees itself as a domestic focused steel company but a mining, mining consumables and steel business with a global orientation. The OneSteel brand will still be applied to its Australian steel and recycling businesses. OneSteel will be holding an extraordinary general meeting next month, to vote on its name change.
 
Aquila wins appeal 
Coal explorer Aquila Resources Limited (ASX:AQA) has won a Supreme Court appeal in Queensland against joint venture partner Vale Australia. The two were unable to agree on the valuation of the Belvedere coal project. Aquila’s wholly owned subsidiary, IP Coal Pty Ltd was again recently involved in another dispute with Vale, over its rights to the Isaac Plains coal mine.
 
Resources News
Queensland’s mining-driven construction boom could be over in only three years. Economic forecaster BIS Shrapnel says activity will reach its peak as early as 2014. Adrian Hart, the report’s author says the recent increase in construction has been driven by LNG and coal projects, which are timed to be complete by the middle of the decade. Mr Hart says that unless new mining projects begin, construction workers would relocated from Queensland to Western Australia. He expects to see a shift back to urban construction in Queensland.
 
 
Melissa Beaumont Lee