Steel loses appeal

Resources Corner

Resources and mining companies making news include OneSteel’s shareholders approving the company’s proposal to change its name to Arrium, Leighton Contractors wins a swag of contracts, Iluka Resources will reduce planned zircon production this year, Whitehaven makes a $142 million bid for Coalworks and Mirabela Nickel seeks to reassure investors.
 
OneSteel shareholders back new name 
OneSteel Limited’s (ASX:OST) shareholders have approved the company’s proposal to change its name to Arrium. The mining group revealed the planned name change last month, claiming it is a natural progression in order to reflect the expansion of its business in recent years. OneSteel no longer sees itself as a domestic focused steel company but a mining, mining consumables and steel business with a global orientation. OneSteel’s new name is expected to take effect from July 2, when it will be listed as Arrium Limited with the stock ticker ARI.
 
Iluka cuts zircon output
Iluka Resources Limited (ASX:ILU) has announced it would reduce planned zircon production this year. The mineral sands producer has blamed continued global economic uncertainty for the decision to reduce zircon output to 430,000 tonnes in the current calendar year. The latest forecast compares with 500,000 metric tonnes forecast in February and 601,000 produced last year. Zircon sales are expected to fall from the previously forecast 450,000 tonnes to 400,000 tonnes this year. Iluka has confirmed it will maintain its high-grade titanium dioxide production.
 
Leighton wins contracts, confirms guidance
Leighton Contractors, a wholly owned subsidiary of Leighton Holdings Limited (ASX:LEI) says it’s been named as preferred contractor for the Solomon iron ore project in Western Australia’s Pilbara region, owned by Fortescue Metals Group Limited (ASX:FMG). Leighton also announced it has been awarded almost $700 million of work in Indonesia and across Australia. Leighton contractors will also deliver $800 million worth of gas and water infrastructure across Queensland after being awarded two contracts by Australia Pacific LNG. Leighton Holdings reconfirmed its guidance for underlying net profit after tax for the six months to June 30 of $100-$150 million and for the full year to December of $400-500 million.
 
Whitehaven bids for Coalworks 
Whitehaven Coal (ASX:WHC) has made a $142 million bid for coal explorer Coalworks Limited (ASX:CWK). Whitehaven currently has a 17.3 per cent interest in Coalworks. Whitehaven is offering $1.00 for each Coalworks share in an off-market takeover. Whitehaven’s chief says the acquisition of Coalworks represents a logical next step which will allow it to consolidate its development and exploration portfolio. In a letter to investors, Coalworks chairman Wayne Mitchell has asked shareholders to reject a proposal to remove him and another director. Mr Mitchell advises their removal would leave the board made up of Whitehaven and Macquarie nominees – whose interests, he says are not necessarily aligned with other Coalworks shareholders. The vote will take place on June 15.
 
Mirabela reassures investors
Mirabela Nickel Limited (ASX:MBN) has sought to reassure investors after its share price shed almost a third of its value. Responding to an ASX price query the Brazil-focused nickel miner affirmed its guidance and said it had no explanation for the dramatic share price decline. Mirabela has however noted market speculation surrounding its potential funding requirements given the current nickel price and says it is considering its capital raising alternatives. Global nickel prices have pulled back about 7 per cent to $US17,355 per tonne since the beginning of the year. On Thursday chief executive Ian Purdy told the Australian Financial Review the company’s debt position was “rock solid”, investors responded positively to the news with Mirabela’s stock price surging in response.
 
Resources News
A major theme for the federal budget was the redistribution of wealth from high to lower income earners, and boosting taxation for mining companies and carbon emitters. The government’s revenues are expected to grow from the introduction of the mining and carbon taxes from July 1, 2012.
 
A boom in mining investment is expected to see the resource and resource-related sectors contribute to between 15 and 20 per cent of Gross Domestic Product (GDP) over this year. The remaining 75 per cent 80 per cent of the economy is expected to grow at about 2 per cent.  The mining sector is forecast to attract a record $120 million into projects this year, representing about 12.5 per cent of GDP.