Eurobench.com

voda 17 april 2012 16:21

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Rio Tinto prepares mine for driverless trucks

Rio Tinto will put driverless trucks into a production iron ore mine in Western Australia's Pilbara region from this month, following a multi year, five truck trial in its West Angelas mine.

The mining giant will deploy ten automated Komatsu haul trucks to the Junction South East pit of its Yandicoogina mine, under plans revealed last June.

Five of those driverless trucks will be redeployed from West Angelas, where they were limited to dumping 'waste' products for the trial. The others will be new vehicles.

A Rio Tinto spokeswoman told iTnews that the existing five trucks "ceased running" at West Angelas in late February and were "in the process of being moved" to Yandicoogina.

At Yandicoogina, the trucks will dump iron ore for the first time, marking a major step in the evolution of the project towards full operational deployment.

The ten-truck roll-out is the next phase of the driverless truck portion of Rio Tinto's Mine of the Future program, which promotes automation and remote control of equipment at mine sites.

Rio Tinto's spokeswoman said the trucks would start operating at Yandicoogina at some point this month, but did not know whether the entire fleet of ten would be operating from day one. She added that "The intention is to get them working in Junction South East pit as soon as we can.”

Aside from the ten trucks to operate at Yandicoogina, Rio Tinto has ordered another 150 autonomous trucks from Komatsu, to be delivered over the next four years.

Source - iTnews.com.au

voda 18 april 2012 16:51

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Rio Tinto announced Q1 operations review

Mr Tom Albanese CEO of Rio Tinto said that "We had a solid first quarter with increased production of iron ore, coal, bauxite, alumina and titanium dioxide compared with the first quarter of 2011. This was driven by a combination of our consistently high operating performance and reduced impact from severe weather than in 2011. We were therefore well positioned for the relatively strong markets in the first quarter, albeit with continued volatility as we anticipated."

1. First quarter global iron ore shipments of 54 million tonnes were two per cent higher than the first quarter of 2011.

2. First quarter global iron ore production of 59 million tonnes (46 million tonnes attributable) was 10% higher than the first quarter of 2011. Production was five million tonnes above shipments as ports in Western Australia were closed during cyclonic activity.

3. During the quarter, iron ore production and shipping capacity in the Pilbara increased by a further five million tonnes to 230 million tonnes per annum following the completion of the second debottlenecking project at the Dampier port on time and on budget.

4. Mined copper production was 18 per cent lower than the first quarter of 2011 due to anticipated lower grades at Kennecott Utah Copper.

5. Bauxite and alumina production were 10 per cent and 13 per cent higher than the first quarter of 2011. Aluminium was nine per cent lower primarily reflecting the orderly shutdown of two thirds of capacity at Alma, due to labour disruption, and the closure of Lynemouth.

6. Hard coking coal production was five per cent higher than the first quarter of 2011. Rio Tinto's share of thermal coal production was three per cent higher following the increase in ownership in the former Coal & Allied operations.

7. Titanium dioxide feedstocks production was 14 per cent higher than the first quarter of 2011.

8. On 1 February 2012, Rio Tinto announced that it will increase its stake in Richards Bay Minerals to 74 per cent through the acquisition of BHP Billiton's 37 per cent interest.

9. On 27 March 2012, Rio Tinto announced that it has begun a strategic review of its diamond business that will include exploring a range of options for potential divestment.

10. Rio Tinto completed its share buy-back program on 26 March 2012. Since February 2011, 116.9 million Rio Tinto plc shares have been purchased at an average price of GBP 37.47, for a total consideration of USD 7.0 billion.

Source - Rio Tinto

voda 18 april 2012 16:52

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BHP Billiton production report for 9 months

Western Australia Iron Ore achieved record production for the nine months ended March 2012, a 22% increase on the prior corresponding period.

The Onshore US petroleum business delivered a 35% increase in liquids production compared to the December 2011 quarter.

Escondida (Chile) production increased by 9% from the December 2011 quarter, benefiting from higher ore grades

Production records for the nine months and quarter ended March 2012 were achieved at two of BHP Billiton’s high value, export orientated energy coal operations, New South Wales Energy Coal (Australia) and Cerrejon Coal (Colombia).

Queensland Coal (Australia) production remained constrained as a result of industrial action and heavy rainfall.

Source - BHPB

voda 18 april 2012 16:53

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Rio Tinto sets out track record as Olympics medals provider

Rio Tinto set out its ethical track record to support its role as the official metal provider for the 4,700 medals for the London 2012 Olympic and Paralympic Games.

The metal is being sourced from Rio Tinto's Kennecott Utah Copper mine in Salt Lake City, Utah, USA and its Oyu Tolgoi mine in Mongolia, which goes into commercial production in 2013.

Mr Tom Albanese CEO of Rio Tinto said that "Being ethically responsible is a thread that runs through everything we do. We aim to bring long-lasting positive change to the communities where we work, respecting human rights, bringing economic benefits and looking after the environment. The metals and minerals we produce go to make things we use every day, and that help contribute to higher living standards, from medicine and soap to housing and mobile phones.”

"We have rigorous standards for air quality, ecosystems, biodiversity, climate change, the use of energy, land and water and waste disposal. Before we even open a mine we plan for its closure and how to restore the land. We support London 2012's commitment to delivering the most sustainable games ever. It aligns with Rio Tinto's commitment to sustainable development wherever we operate."

In Salt Lake City, Rio Tinto operates strictly within the parameters of its air permits and complies with federal and state air quality regulations, which are based on rigorous standards for protecting human health.

In Oyu Tolgoi, Rio Tinto has committed to zero impact on community water sources.
The primary water source for Oyu Tolgoi is the Gunii Hooloi aquifer a deep, non drinkable water source that is separate from the shallow water sources used by households and animals. Oyu Tolgoi is only allowed to use approximately 20% of the water from Gunii Hooloi, so the aquifer can never be exhausted.

Kennecott Utah Copper, Utah, USA
Kennecott operates the Bingham Canyon Mine, which has been providing mineral resources and economic prosperity for more than 109 years.

Kennecott Utah Copper operates strictly within the parameters of its air permits and is consistently in compliance with US Environmental Protection Agency and Utah Division of Air Quality regulations, which are based on rigorous standards for protecting human health.

Kennecott Utah Copper has and continues to invest in programmes to further reduce emissions, decrease waste and improve air quality. These include:
1. One of the most technically advanced and cleanest smelters in the world which captures 99.9% of sulphur emissions and generates two thirds of the plant's electrical power
2. A USD 10 millio combined heat and power system that will reduce emissions by 90% compared with separate heat and power systems
3. A vehicle idling reduction programme that now covers 360 vehicles and has resulted in the avoidance of more than two million gallons of fuel and emissions
4. New, more efficient trucks with fewer emissions

Kennecott Utah Copper has also spent USD 400 million in reclaiming and restoring land affected by mining operations in the past.

Oyu Tolgoi Copper Mine, Mongolia
Oyu Tolgoi is committed to maintaining, developing and conserving the water supply for Oyu Tolgoi and the local communities throughout the South Gobi region, including the herders and their livestock.

Oyu Tolgoi is making a significant effort to not take any of the water from the existing supplies and has committed to zero impact on community water sources.

The water source for Oyu Tolgoi is the Gunii Hooloi aquifer a deep, non drinkable water source that is separate from the shallow water sources used by households and animals.

Oyu Tolgoi is only allowed to use approximately 20 per cent of the water from Gunii HooloiIt so the aquifer can never be exhausted. This will be sufficient to service the mine without needing to take water from any other source.

Oyu Tolgoi will be one of the most water-conservative mines in the world. No water is discharged from the mine and Oyu Tolgoi currently recycles 100% of its treated domestic wastewater.

Source - Rio Tinto

voda 19 april 2012 16:57

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Rio Tinto to provide comprehensive financing package to Ivanhoe Mines

Rio Tinto and Ivanhoe Mines Ltd have signed an agreement under which Rio Tinto has agreed to support and provide certain elements of a comprehensive funding package for Ivanhoe that will underpin the development of the Oyu Tolgoi copper-gold mine in Mongolia. The parties have also agreed that Rio Tinto, which currently owns 51 per cent of Ivanhoe, will replace a number of the directors on the Ivanhoe Board with Rio Tinto-nominated directors and also nominate a new management team.

Financing package
The comprehensive financing package, together with the proceeds from any potential future asset sales by Ivanhoe, are intended to cover Ivanhoe's total funding needs to complete the development of Oyu Tolgoi. Rio Tinto will support a US$1.8 billion equity financing by Ivanhoe. Rio Tinto will also provide USD 1.5 billion of bridge financing to Ivanhoe, in addition to the USD 1.8 billion interim funding facility that was agreed in December 2010.

Rio Tinto remains committed to continue working with Ivanhoe to secure project financing for the Oyu Tolgoi project and has agreed to provide a guarantee of certain obligations of Ivanhoe under the project financing. Once project financing is in place, both the USD 1.5 billion of bridge financing and the USD 1.8 billion interim funding facility will be repaid to Rio Tinto in full.

Source - Rio Tinto

voda 19 april 2012 17:00

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Rio Tinto downbeat on copper guidance

The Australian reported that RIO Tinto shares slipped after the big miner missed iron ore and copper production expectations and gave some downbeat copper guidance for the coming year.

In the 3 months to April 1st 2012, Rio produced 59 million tonnes of iron ore from its West Australian and Canadian mines up 10% from a year earlier but down 65 million tonne in the previous quarter. The result missed analysts' expectations by about 5 million tonne.

Source - The Australian.com.au

voda 19 april 2012 17:02

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BHPB iron ore production update

Western Australia Iron Ore achieved record production for the nine months ended March 2012 despite a decline in volumes in the March 2012 quarter as a result of cyclone activity. Consistently strong operating performance, combined with the continued ramp up of Ore Handling Plant 3 at Yandi, dual tracking of the company’s rail infrastructure and additional ship loading capacity at Port Hedland, contributed to the record result.

Full year WAIO production guidance remains unchanged as scheduled maintenance and tie in activities are expected to constrain performance in the June 2012 quarter.

Source - BHPB

voda 19 april 2012 17:04

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Rio to invest AUD 300 million in Pilbara town of Wickham

AAP reported that Rio Tinto will spend more than AUD 300 million renewing and expanding the town of Wickham in Western Australia's Pilbara region to support its iron ore production expansion.

The plan has been approved by the state government and is Rio Tinto's second significant town renewal in the past five years following its AUD 200 million plus revitalisation of Pannawonica, which is nearing completion.

Wickham, population 1,800, is near Cape Lambert port, which is being expanded and is owned by Robe River Iron Associates, a Rio Tinto controlled joint venture with Japanese firms Mitsui Iron, Nippon Steel and Sumimoto Metal.

The port expansion is part of Rio Tinto's multi-billion dollar investment in the Pilbara to increase its iron ore mining and export capacity to 283 million tonnes per annum from 225 million tonnes per annum currently.

A further expansion to 353 million tonnes per annum is in the final study phase.

Source - www.businessspectator.com.au

voda 20 april 2012 16:48

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Rio Tinto updates copper production Q1 2012.

Rio Tinto announced the copper production of Q1 2012.

Kennecott Utah Copper;
As previously guided, production of copper and gold in concentrates was lower during the Q1 as mining progressed through lower grade areas of the open pit. During this transition additional focus has been placed on mining from the higher grade molybdenum dome at the bottom of the pit, partly mitigating the effect on molybdenum production. Lower ore grades are expected to persist through the H1 of the year. A 26 day maintenance shutdown at the smelter will occur in the Q2 of 2012 positioning it to take advantage of increasing grades in the H2 of the year.

In April, Rio Tinto approved an additional USD 195 million of capital to complete phase 1 of the Moly Autoclave Project bringing the total to USD 535 million. The increase in capital has resulted primarily from increased labour rates for engineering and construction, higher commodity prices, particularly for steel and copper wire, and an increase in project scope. The facility is scheduled for completion in the second quarter of 2013 followed by a 12 month period to reach full capacity.

Escondida;
Milled production of copper was consistent with the Q1 of 2011. The 12 per cent overall rise in mined copper was due to an increase in ore delivered to the leaching stockpiles. On February 14th 2012, Rio Tinto announced that it had approved USD 1.4 billion for two projects to support higher production at the Escondida copper mine in Chile. Rio Tinto's investment is expected to be funded through the company's share of Escondida's operating cash flows.

Grasberg;
Freeport is due to release its 100% operating data for the Q1 on April 19th 2012. Based on the latest available Freeport estimates, 2012 production from Grasberg is not expected to reach the amount set in the metal sharing agreement because of planned mine sequencing in areas with lower metal grades. Accordingly, Rio Tinto's share of JV production is expected to be zero for the year 2012.

Northparkes;
Q1 mined copper production rose by 12% compared with the same quarter of 2011 due to higher grades.

Palabora;
Q1 mined copper production decreased by 9% compared with the same quarter of 2011 due to reduced slag processed lower copper recoveries and lower average ore grades.

Ivanhoe;
Overall construction of the Oyu Tolgoi copper gold project was more than 77% complete at the end of March. The project remains on track to begin initial production in the second half of 2012 with commercial production of copper concentrate expected in the first half of 2013.

2012 production guidance;
In 2012, Rio Tinto share of mined and refined copper production is expected to be approximately 600,000 tonnes and 320,000 tonnes, respectively.

voda 20 april 2012 16:53

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BHP signs up to Beijing iron ore exchange CBMX

BHP BILLITON has become the last big Australian iron ore producer to join the China Beijing Metals Exchange, a significant victory in the trading platform's struggle to become the main market for spot iron ore.

Despite BHP's decision to join the exchange, it is still committed to its own preferred platform, Global Ore, in Singapore.

A BHP spokeswoman said “Consistent with our practice of selling at the market clearing price of the day, BHP Billiton is in-principle supportive of any initiative aimed at improving market transparency and liquidity. 'We have long advocated in favour of platforms that support transparency and liquidity, and welcome the opportunity to support and formally commit to such initiatives as Global Ore and the China spot trading platform.”

The location of the exchange in Beijing has raised suspicions it could fall under the influence of the Chinese government, but a Chinese commodities analyst, Mr Xu Xiang Chun, said traditional market forces should prevail. He said ''The fact that the trading platform is based in China is a positive development on influencing the iron ore price. However, the price is still fundamentally determined by supply and demand. The effectiveness of the platform is dependent on members' involvement and how much ore they are willing to trade on the platform.”

BHP's move followed the Brazilian miner Vale's decision to join the Chinese platform two days ago. Australian producers Rio Tinto and Fortescue Metals Group signed up last month.

The Beijing exchange begins operations on May 8. The Beijing exchange is backed by 26 Chinese steel mills and traders including Baosteel, Wuhan Iron and Steel, China Minmetals and SinoSteel.

Source - Xinhua

voda 20 april 2012 16:53

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BHPB metallurgical coal update

Metallurgical coal
Queensland Coal production remained constrained in the March 2012 quarter as a result of industrial action and heavy rainfall. The extent to which industrial action will continue to affect production, sales and unit costs is difficult to predict, however with inventories now severely depleted, the impact on future quarters may be significant. Force majeure was declared across all BMA sites in April 2012 and remains in place.

A planned longwall move and plant shutdown at Dendrobium led to lower production at Illawarra Coal (Australia) in the March 2012 quarter. A longwall move at Appin is scheduled for the June 2012 quarter.

Source - BHPB

voda 20 april 2012 16:54

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BHP wins on coal dispute postal ballot

The Courier-Mail reported that BHP Billiton last night scored a minor win in its bitter 16-month dispute with Queensland coal miners as it ramped up its attack on the union leadership, accusing them of living in the past and using scare tactics.

Fair Work Australia has ruled in favour of BHP holding a postal ballot on a new workplace agreement for workers at the seven central Queensland mines under the BHP Mitsubishi Alliance.

The union was granted a one week postponement of the ballot which will now be held from April 27 to May 18.

Mr Stephen Smyth, the district president of mining union CFMEU said he was disappointed at the FWA ruling because postal ballots were notoriously unreliable. He said “Our preference is always for an attendance ballot but it will be what it will be and we'll just have to work around it.”

In an interview with The Courier-Mail, BHP has conceded that while it would not back down on its right to manage, there was room to move to resolve the dispute at the seven mines.

Source - The Courier Mail

voda 23 april 2012 16:37

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BHPB base metals production updates of Q1 2012

BHPB announced base metals production for Q1 2012 result.

Copper - Consistent with the mine plan, Escondida production increased by nine per cent from the December 2011 quarter benefiting from higher ore grades. This was offset by unfavorable weather conditions and lower recoveries at Pampa Norte Chile and planned maintenance at Olympic Dam Australia.

Recent investment in the mining fleets at Antamina Peru and Pampa Norte contributed to material mined records for both assets for the nine months ended March 2012. In addition, Antamina achieved a milling record for the same period following successful commissioning of the expansion project.

Escondida production guidance remains unchanged for the 2012 financial year. Production is expected to improve as mining activities progress towards higher grade ore with completion of the Escondida Ore Access project in the main pit.

Lead and silver - Production at Cannington Australia decreased in the March 2012 quarter reflecting lower average ore grades and mill throughput.

Zinc - An improvement in Antamina ore grades and the successful commissioning of the expansion project led to 5% increase in total zinc production in the March 2012 quarter.

Source - BHPB

voda 23 april 2012 16:40

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Rio Tinto Q1 coal production update

Wet weather significantly affected production across Queensland and New South Wales, with further impacts expected from delays in overburden removal.

Hard coking coal production was five per cent above the first quarter of 2011. Significant wet weather in March is expected to affect second quarter production. Kestrel volumes were impacted by a scheduled longwall changeover and lower productivity during the ramp up.

Thermal coal production was three per cent higher than the first quarter of 2011 primarily due to the increase in ownership in Coal & Allied. All New South Wales sites were impacted by the knock-on effect of reduced explosive supplies in the fourth quarter of 2011.

First production from Rio Tinto Coal Mozambique’s Benga mine was processed through the wash plant in February with final commissioning nearing completion. The product is expected to be railed to port at the end of April with the first shipment of hard coking coal from the Beira port expected around the middle of the second quarter.

2012 production guidance
In 2012, Rio Tinto’s share of Australian hard coking, semi soft coking and thermal coal production is expected to be 9 million tonnes, 3 million tonnes and 20 million tonnes, respectively

Source - Rio Tinto

voda 23 april 2012 16:40

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Rio Tinto casts doubt on Queensland coal export plan

RIO TINTO may have spoiled the Queensland Government's plans to aggressively ramp up coal exports after the miner admitted late on Friday it had abandoned talks for a port expansion in the far north of the state.

The USD 9 billion expansion of Abbot Point coal export harbour to nine terminals may be jeopardised by Rio's decision to withdraw from the project and also hamper the ambitions of other miners in the area, including billionaire Clive Palmer's Waratah Coal. The world's third biggest miner cited higher costs and a shift in global economic markets as the reason for opting out.

UBS Securities analyst Glyn Lawcock told BusinessDaily the decision was not surprising as he estimated Rio's resources in the area were insufficient to justify the expense, now that coal prices had softened.

Mr Lawcock said that "They would need to have increments of 30 million tonnes a year to go ahead with that type of expenditure, and I just don't think the coal is there.”

He said that "My view is that Rio is and will become more focussed on its vast coal reserves in NSW."

Mr Lawcock also speculated that BHP Billiton, one of the major users of Abbot Point, may also walk away from an expansion.

Mr Lawcock said that "The ones to watch now will be BHP with all the troubles, industrial and weatherwise, that they are having in Queensland. This week BHP said that continuing strikes and heavy rainfalls would significantly impact its earnings from coal mining in Queensland for the rest of the year.”

Earlier this year, it decided to indefinitely shut down one of its Queensland mines, Norwich Park.

The previous Queensland government had pinned hopes for greater economic growth in the state on expanding Abbot Point to handle shipments of 385 million tonnes a year from 2017.

At the time, Asia's voracious appetite for energy didn't appear to be abating, but then the Eurozone economic crisis began turning markets bearish.

Abbot Point, 25 km north of Bowen and near the sensitive Great Barrier Reef, currently handles 50 million tonnes of coal shipments a year.

Last month, the new government deferred a decision on the controversial expansion of the port until the end of the year.

Sources said a recent visit by a United Nations led delegation to the world heritage area over environmental concerns for the reef may have helped to scuttle final approval.

Source - www.heraldsun.com.au

voda 23 april 2012 16:41

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BHPB Q1 production updates of energy coal

Energy coal - Production records for the nine months and quarter ended March 2012 were achieved at two of BHP Billiton’s high value, export orientated energy coal operations, New South Wales Energy Coal and Cerrejon Coal. Export volumes for New South Wales Energy Coal were adversely affected by vessel delays at the Port of Newcastle in the March 2012 quarter. Preparation for the resumption of mining activity at San Juan Coal (USA) has commenced, with a full restart expected in the June 2012 quarter.

Source - BHPB

voda 24 april 2012 17:19

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Rio Tinto Q1 iron ore production update

Global iron ore production was 59 million tonnes in the first quarter, a 10 per cent increase on the same quarter of 2011. On an attributable basis, production was nine per cent higher than the first quarter of 2011 at 46 million tonnes.

Pilbara operations
The Pilbara mines produced 56 million tonnes (44 million tonnes attributable) in the first quarter. First quarter sales of 51 million tonnes (100 per cent basis) were three per cent higher than the same quarter of 2011. Three tropical cyclones during the quarter resulted in the temporary shutdown of port operations.

Railed product was 56.5 million tonnes for the quarter, a first quarter record despite the adverse weather conditions, and resulted in healthy stockpiles at all three ports.

During the quarter, the capacity of the Pilbara system increased by a further five million tonnes to 230 million tonnes per annum following the completion of the second debottlenecking project at the Dampier port on time and on budget.

Pilbara marketing
In the first quarter, approximately 40% of sales were priced with reference to a quarterly average index set at the prior quarter’s average lagged by one month. The remainder was sold on a shorter term price basis linked to either the current quarter average, current month average or spot index prices.

Index prices are adjusted for product characteristics and iron and moisture content.

Pilbara expansion
The expansion of the Pilbara to 283 million tonnes per annum by the end of 2013 remains on track. On 8 February 2012, Rio Tinto committed a further USD 1.2 billion (Rio Tinto share USD 700 million) for Cape Lambert port and rail early works needed for the proposed capacity expansion to 353 million tonnes per annum. The 353 million tonnes per annum expansion is in final feasibility study, with a final investment decision expected later this year.

On February 20th 2012, Rio Tinto announced a USD 518 million (Rio Tinto share USD 478 million) investment in autonomous trains for the Pilbara rail network. The first driverless train will be launched in 2014, with the AutoHaul TM automated train programme scheduled for completion a year later.

Rio Tinto's integrated operations will be progressively upgraded as follows:
1. 230 million tonnes per annum current operating capacity
2. 283 million tonnes per annum by end of 2013 - Cape Lambert 53 million tonnes per annum increment (in implementation)
3. 353 million tonnes per annum by end of H1 2015 - Cape Lambert 70 million tonnes per annum increment (in feasibility)

Iron Ore Company of Canada
First quarter saleable iron ore production was 12% higher than the same quarter of 2011 attributable to product mix and a lower strip ratio. In March, the local steel workers union membership at IOC voted to ratify IOC’s proposal for a six year collective bargaining agreement. The agreement provides long term stability for the business with competitive wages supporting attraction and retention in a currently heated labour market.

Commissioning of the first phase expansion project, lifting capacity to 22 million tonnes per annum continued. The phase two expansion to 23.3 million tonnes per annum is progressing, with first production expected in late 2012.

Source – Rio Tinto

voda 24 april 2012 17:20

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BHPB sticking with Abbot Pt coal terminal development

Australian media reported that BHP Billiton has reconfirmed its commitment to Abbot Point Coal BHP Billiton has reconfirmed its commitment to Abbot Point Coal Terminal's AUD 6.2 billion expansion deal after Rio Tinto withdrew its involvement at the weekend.

There was speculation BHP Billiton would follow in Rio Tinto's footsteps but a spokeswoman for the company yesterday said they would progress with plans to be part of the expansion.

The spokeswoman said “BHP Billiton has been awarded preferred developer status for a new terminal (T2) at Abbot Point. The development of the BHP Billiton Abbot Point Coal Terminal is subject to detailed assessment and regulatory and owner approvals.”

The expansion project has come under doubt since it was announced last month that government approvals would be delayed until December. Rio Tinto's decision to withdraw has also added to the uncertainty of the expansion.

Source – Rockhampton Morning Bulletin

voda 25 april 2012 17:19

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Ms Rinehart to battle Rio Tinto over iron ore royalties

It is reported that Rio Tinto is fighting a claim from Australia's richest women, mining billionaires Ms Gina Rinehart and Ms Angela Bennett, that it should pay them royalties on every tonne of iron ore produced at its Channar and Eastern Ranges mines in the Pilbara.

More than 50 years after Lang Hancock and his business partner Peter Wright negotiated the first agreements to develop the Pilbara deposits, their descendants have put aside their own disagreements to sue Rio subsidiary Hamersley Iron Pty Limited, over the terms of a 1970 royalties agreement.

The Hancock and Wright parties say they are entitled to royalties of 2.5% of iron ore sales from the two mines. Rio has denied that it is liable for such payments.

How much money was at stake remained clouded in the NSW Supreme Court yesterday as lawyers argued about the scope of the case.

The Channar and Eastern Ranges mines are joint ventures with Chinese steel makers, Sinosteel and Baosteel. According to the Rio website, Channar is expected to produce 200 million tonnes in its life. Current delivery of iron ore to China is USD 150 a tonne.

Justice Mr Robert McDougall told the parties that they could look at a quick and just calculation, or they could regard it as mega litigation, and you are mega parties and you carry the consequences.

Mr Mark Bickerton, a Hancock spokesman, said that Rio Tinto is paying royalties on ore produced at Mount Tom Price, Marandoo and Paraburdoo mines. Hancock has also sued in the Supreme Court of Western Australia claiming it is owed royalties on other properties. Hancock receives no royalties from Rio Tinto's biggest mine, Yandi, or its Robe River operations.

As iron ore prices surged on demand from China, the royalties propelled Ms Rinehart to 30th on the Bloomberg Billionaires Index, with an estimated net worth of USD 18.7 billion. The case will return to court later this year.

Source - smh.com.au

voda 26 april 2012 17:03

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Rio Tinto completes formation of Simandou JV with Chalco

Rio Tinto and Chinalco's listed subsidiary, Chalco have completed the formation of their joint venture to develop and operate the Simandou iron ore project in Guinea, following the completion of all Chinese regulatory approvals.

As a result, a consortium led by Chalco has made an earn-in payment of USD 1.35 billion, in line with an agreement reached with Rio Tinto in March 2010.

Rio Tinto and the Chalco consortium now hold a 53% and 47% interest respectively in the JV which translates into a 50.35% and 44.65% interest in the Simandou project. The remaining five per cent is held by the International Finance Corporation, part of the World Bank. The Government of Guinea retains its options for participation in the project and is expected to take up its first share in the near future.

Source - Rio Tinto

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