Then again… election news mine edition

On the one hand, Rio Tinto ”Plans to double Labrador mine output”  according to the headline on a CBC news report.

On the other hand,

ONE of Australia's leading experts on global risk warned yesterday that a China slowdown would cause "quite an emptying of the large resource investment pipeline in Australia".

"Needless to say, the most marginal projects would be the first casualties," he added.

Roger Donnelly, chief economist at the Export Finance and Insurance Corporation, the government-owned export credit agency, told The Australian that "in the worst case, where there is a real market meltdown that leads to a North Atlantic double-dip, I don't think China would be spared".  [The Australian, August 10]

Then again, what the CBC story says in the second paragraph is that the company is “starting work on a tentative plan”.

Starting work.

Tentative plan.

Tentative.

As in maybe, kinda, sorta.

Read a little farther and you will see that the company is thinking about possibly-theoretically-with-a-bit-of-luck, doubling production at the mine in “the back end of 2015.”

Just in time for the provincial general election that will take place that same year, too no doubt.

Cool how that works out.

 

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Rio dumps Chinese, partners with BHP

Rio Tinto announced Friday that it is no longer pursuing its deal with Chinese industrial concern Chinalco. 

Instead, the company will launch a joint venture with BHP Billiton on iron ore assets the companies share in Australia.

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Rio Tinto responds to aluminum downturn

Via company news release:

Rio Tinto Alcan today announced it will slow the construction of the Yarwun alumina refinery expansion in Gladstone and curtail annual bauxite production at its Weipa mine to 15 million tonnes (from 19.4 million tonnes in 2008) due to the sharp fall in alumina and aluminium demand and prices in recent months.

Announcing the decision, Rio Tinto Alcan Bauxite and Alumina president Steve Hodgson said the depressed state of the market and a sharp cutback in demand made further tough decisions necessary.

 

Someone needs to ask Wade Locke about that great big gi-enormous project that was supposedly coming any day now to Labrador.  Hint:  it was an aluminum plant.

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But will Charest expropriate?

Alcan closes a smelter and slashes production in the latest round of cuts and adjustments:

• A further six per cent reduction in aluminium production, bringing the total reduction to approximately 11 per cent, and close to six per cent reduction in alumina production
• Reduction in global workforce by approximately 1100 roles (300 contractors and 800 employee roles)
• Substantial cost reduction programmes in Rio Tinto Alcan facilities worldwide
• Permanent closure of Beauharnois smelter in Quebec, Canada
• Production at Vaudreuil alumina refinery in Canada to be temporarily curtailed by 400,000 tonnes
• Expected sale of interest in Alcan Ningxia joint venture in China
• As previously announced, the anticipated ending of smelting operations at Anglesey Aluminium joint venture in the United Kingdom in September 2009 when the current power contract expires. The impact on production and headcount is included in these figures.

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ALCOA bid off; Rio may pocket US$30 billion in asset sell-off

BHP has reportedly backed away from purchasing ALCOA. Share prices are down for the American aluminum company.

Meanwhile, Rio Tinto's plan to sell off non-core assets in ALCAN could bring the company US$30 billion according to The Australian. Analysis by Goldman Sachs JBWere said Rio could divest of the company's uranium, coal and other assets and focus on iron ore, copper and aluminum all of which are in high demand in the growing Chinese and Indian economies.

GSJBW said the potential sale of Rio's uranium, thermal coal, industrial minerals, gold and diamonds divisions and non-strategic assets in iron ore, copper and aluminum could net $US30 billion ($A34.15 billion).

The brokerage estimates Rio Tinto could receive $US8 billion ($A9.11 billion) for Pacific Coal, $US4 billion ($A4.55 billion) for Coal & Allied and $US5 billion ($A5.69 billion) for its uranium division, which includes its majority stake in Energy Resources of Australia Ltd.

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Rio Tinto sizing up ALCAN

Mining giant Rio Tinto, which operates an iron ore plant in western Labrador has hired Deutsche Bank to advise on a possible bid for ALCAN, as the Sydney Morning Herald reported in its Monday edition.

Alcan last week rejected a $US27 billion ($33 billion) hostile offer from its US rival, Alcoa, which would create the world's largest aluminium company, and indicated it was in talks with unnamed "third parties".

The Herald understands that several potential suitors, including Rio and BHP, have expressed interest in opening discussions with Alcan's board. Some, including Rio, have already hired investment banks to provide advice on a possible bid.

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Rio Tinto mans barricades

The Australian reports that, faced with increasing speculation that the company will be the subject of a takeover bid or takeover bids, Rio Tinto has instructed its financial advisor, Morgan Stanley, to prepare a defense strategy.

Rio has "refreshed" Morgan Stanley's existing mandate in order to be prepared for any possible bid, an industry source told The Australian. The company refused to comment. Morgan Stanley's global mining industry adviser in London is Peter Bacchus, who spearheaded WMC's takeover defence against Xstrata in 2005 when he was based in Australia with Citigroup.

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CVRD eyes IOC parent

From Australia, comes a report that Brazillian miner CVRD is sizing up Rio Tinto as a possible acquisition.

CVRD operates Voisey's Bay through it's Inco subsidiary.

Rio Tinto operates an iron ore mine in western Labrador through it's subsidiary, Iron Ore Company of Canada.

A Reuters account can be found here .

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Rio Tinto ripe for takeover

Mining giant Rio Tinto may be ripe for a takeover bid according to an analyst for Citigroup.

The de-rating of Rio Tinto for example, has opened up a value arbitrage and is now "well into leveraged buyout territory," according to Citigroup analyst Heath Jansen.

"Rio stands out as a potential acquisition candidate, either by private equity or the incumbent mining companies," he said in a note to clients.

Rio Tinto stock traded down in Australia despite the speculation.

Unidentified analysts have also speculated that ExxonMobil and Royal Dutch Shell may be possible buyers of the Australian mine operator.

Rio Tinto's North American operations includes Iron Ore Company of Canada in Labrador.

ExxonMobil is the largest operator in the Newfoundland and Labrador offshore oil industry.

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