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Tag Archives: OzMinerals

Kevin Naughton
 
May 1, 2012

EVERYTHING that can be done, has been done, says the head of the state government’s Olympic Dam Taskforce as it waits for BHP Billiton to give the green light to the mine’s proposed expansion.

“Everything is lined up nicely for this decision,” Resources and Energy Department deputy CEO Paul Heithersay said yesterday.

A formal commitment to proceed from the BHP board would trigger billions of dollars in associated infrastructure projects. A board decision is expected mid-year.

Mr Heithersay addressed hundreds of miners, explorers and contractors gathered at the Hilton Hotel for the “2012 Paydirt” SA Resources and Energy Investment Conference.

“Everything the government can do is done; we have completed the EIS and Indenture processes,” he told delegates.

Heithersay said BHP Billiton was already spending “around $20 million a week on pre-commitment projects”, such as expansion of the road from Port Augusta, and engineering design work and earthworks.

Other projects included:

  • 270km of electricity transmission line;
  • 400km of gas pipeline and a gas-fired power station;
  • 105km of railway to be built from Pimba to Olympic Dam;
  • a sea landing facility south of Port Augusta for the unloading of heavy machinery;
  • an airport, complete with solar power and a 737 jet capability;
  • a 10,000 person camp as well as expansion of the Roxby Downs township; and
  • upgrades to Adelaide and Darwin harbours.

Earlier in the conference, Mineral Resources Minister Tom Koutsantonis repeated his “elephant” analogy, used in a recent presentation overseas.

“South Australia is poised to take its place among the titans of mining – not just in Australia but in the world,” Koutsantonis told delegates.

“In Olympic Dam we have tracked down an elephant, we are still in the hunt for the rest of the herd.

“These are exciting times, but they are also challenging times for our State.

“We need to manage our transition into a global mining giant in a way that benefits all South Australians.”

The minister also announced the successful applicants for exploration subsidies under the Plan for Accelerating Exploration, a subsidy program that dates back to the SA Exploration initiative (SAEI) in the early 1990s.

“Twenty-six mineral and petroleum exploration companies spread across South Australia will share about $1.7 million funding from the State Government,” he said.

Under its newer name PACE, it is to be expanded into a series of other collaborations including energy and water, subject to government funding approval.

The importance of Olympic Dam to the economy had earlier been underlined by Oz Mineral’s managing director Terry Burgess when he told delegates a recent set of job ads for work at nearby Prominent Hill had attracted 3000 applicants.

Chinese lift offer and land OZ deal

Barry Fitzgerald
June 12, 2009

A SWEETENED offer of $US1.38 billion ($A1.69 billion) for the bulk of OZ Mineral’s assets has won the day for China’s state-owned Minmetals.

Battle-weary OZ shareholders roundly endorsed the deal at a meeting in Melbourne (92 per cent approval) but not before hurling abuse at the OZ board for what they saw as its role in making the former high-flying miner a major casualty of the global financial crisis.

A big protest vote on the re-election of long-standing director Michael Eager was also recorded (42 per cent against) and the adoption of OZ’s remuneration report was defeated (62 per cent against).

All of that reflected what OZ chairman Barry Cusack said had been an “extremely stressful time” for OZ since the financial crisis hit in mid-September, prompting OZ’s banking syndicate to call in $1.1 billion in debt.

Minmetals project director Mark Liu said after the meeting that the group’s decision to increase the offer demonstrated “goodwill, not only to OZ shareholders but to the Australian public as well”. It comes as the uproar in China continues over Rio Tinto’s spurning of a refinancing deal with state-owned Chinalco.

Minmetals’ original deal was struck in February. Like the Rio Tinto deal before it, it was essentially a refinancing package for the debt-heavy OZ. But it had become unpalatable because of the strong improvement in commodity prices and equity values since.

Last Friday, OZ received two refinancing alternatives, one from RFC and Royal Bank of Canada and one from Macquarie. Both were rejected ahead of yesterday’s shareholder meeting because they lacked, among other things, the certainty OZ was looking for as its June 30 debt repayment deadline loomed.

It was revealed yesterday that Minmetals had been in talks with OZ for about three weeks on increasing its offer to take account of the improved market conditions. The improved deal was agreed to at 8pm on Wednesday night and announced by Minmetals at 10pm, leaving OZ to tell shareholders of the improved offer at the meeting.

OZ said that unlike the competing proposals (Macquarie pulled its bid at 6pm on Wednesday), the new deal with Minmetals was a complete solution to its debt woes.

The only condition was that shareholders approve the deal at yesterday’s meeting.

OZ emerges from the deal sporting close to $800 million in cash and with its portfolio of interests reduced to some exploration assets and the Prominent Hill copper/gold mine in South Australia.

Mr Cusack said OZ would be cautious in how it spent its cash. “Having just come out of a life-threatening experience, we want to make sure that we don’t fall back into one,” he told shareholders.

http://business.theage.com.au/business/chinese-lift-offer-and-land-oz-deal-20090611-c4zi.html

ELIZABETH KNIGHT
June 11, 2009 – 11:57AM
The Chinese cannot be accused of being slow to learn their lessons.

Minmetals would have watched very closely the unfolding disaster that fellow Chinese-owned Chinalco suffered last week at the hands of the board of Rio Tinto.

Chinalco had a once in a lifetime opportunity to get its hands on some unparalleled resource assets in Australia.

It was in the box seat to double its stake in Rio Tinto and take direct stakes in highly sought after assets but it blew it. It got greedy.

Had it delivered a drop dead price on day one the outcome could have been very different.

Minmetals last night and at the 11th hour increased its offer for the OZ Minerals assets it is able to buy, by 15 per cent to $US1.386 billion ($1.75 billion).

The sale of these assets has been one of the most contested deals in recent corporate history.

Macquarie Bank was the primary rival to Minmetals – the Australian bank’s plan involved a recapitalisation for which it would receive some hefty underwriting fees.

But in the end Macquarie’s deal was too risky – given that it would need to provide bridging finance until an issue had been undertaken.

Only a very brave – or foolhardy – organisation would extend finance to an overgeared company like Oz Minerals whose existing bankers are already holding a gun to its head.

Going into this morning’s OZ Mineral shareholder meeting to approve the Minmetals the board made it clear that the banks had cocked the trigger and were ready to squeeze in the event that investors voted against the sale of assets to Minmetals.

It could be argued that on this basis – and given the proxies received indicated that it would be approved – that Minmetals didn’t need to raise the offer.

But there is nothing like certainty – even if it comes at a price.

Lobbing a better offer – and one that sits inside the independent experts range of values – is probably cheap insurance.

eknight@smh.com.au

BHP Billinerals Adam Morton
April 22, 2009

AUSTRALIA’S big miners are pushing for a merger of 11 industry bodies in a bid to cut costs and centralise lobbying power under the Minerals Council of Australia.

Organisations targeted under the plan include the Australian Coal Association, the Australian Aluminium Council, the Australian Uranium Association and state and territory minerals councils.

A letter signed by chief executives at 11 companies, including BHP Billiton, Rio Tinto and Xstrata, says it would “improve national consistency” and reduce a combined operating cost topping $45 million a year.

“Quite simply, we will not continue funding organisations as separate entities to the Minerals Council of Australia as we have previously,” it says.

Sent on the eve of Easter, the letter has angered some industry bodies and their junior member companies.

Most declined to speak, but industry insiders said they feared concentrating power in Canberra would strip some commodities of representation and deny others a strong voice at state level, where much of their business lies.

Tony Fawdon, executive chairman of minerals explorer Diatreme, said the Queensland Resources Council had been crucial in the industry winning $50 million from its State Government in 2006.

He said the national minerals council sat in an ivory tower with little idea of what happened at state level.

“Frankly, I don’t think the (minerals council) is going to have any practicality at all — the bigger the company, the bigger the chamber, the less hands-on the practitioners are at the top of it,” he said. “How are you going to cut up a very, very thin cake of funding across the states?”

Minerals Council chief executive Mitch Hooke said the plan was a commonsense approach that would “enhance regional capacity, not diminish it”.

He said the states would continue to be represented by branches within the national council, as Victoria had been since a merger in 2004. The Northern Territory Resources Council had already volunteered to take part.

“The goal is alignment of advocacy, the goal is improved efficiency and effectiveness,” Mr Hooke said. “If Victoria is anything to go by, the regions are richer for working within the national secretariat while maintaining autonomy to deal with the state issues.”

Mr Fawdon said this meant little: the Victorian minerals council was “pretty toothless”, unlike its counterparts in Queensland, South Australia and Western Australia.

Mr Hooke will convene an implementation committee to be chaired by former Newmont executive Paul Dowd.

Other companies backing the plan are Anglo Coal, Downer EDI, Barrick Gold, Minara Resources, Newcrest Mining, Ausminerals, Thiess and Newmont Asia Pacific.

Several industry bodies declined to comment.

http://business.theage.com.au/business/mining-giants-to-combine-power-20090421-ae3x.html