Newcrest H1 Production & Sales Revenue Report

For the six months to December, Australia’s largest gold miner reported a profit of A$320-million, which was a A$339-million decline from the A$659-million reported in the previous corresponding period.

Earnings before interest, tax, depreciation and amortisation were also down by 37%, from A$1.1-billion to A$740-million, while underlying profit was down 48% to A$320-million.

Australia’s largest gold miner said on Friday that the reduced underlying profit was driven by a 23% decrease in sales revenue, which reached A$1.8-billion during the period under review. This was partially offset by a A$135-million, or 10% reduction, in the cost of sales.

Total gold revenue for the six months to December was also down 24% to A$1.5-billion, while the realised gold price for the period was 1% lower than in the previous corresponding six months. Gold sales volumes of 956,073 ounces were 22% lower than the corresponding prior period

Resources and Reserves

Rio Tinto chief executive Tom Albanese said “Rio Tinto is very well positioned despite the challenging global economic environment. Today we are highlighting the strong future earnings potential from iron ore volume increases and higher-priced new titanium dioxide contracts. And we are showcasing the excellence of our West Australian iron ore business, which is delivering productivity improvements and holding down the costs of expansion despite the current headwinds.

The company said it’s targeting savings of $5 billion by the end of 2014, while simultaneously boosting production at its iron ore, copper and alumina units.

“We are taking further tough action to roll back the unsustainable cost increases of the past few years and are maintaining a relentless focus on improving productivity. We are investing in the highest returning opportunities, delivering major projects on time and are taking advantage of the inbuilt flexibility in our phased investment programmes. We have the ability to respond to changing market conditions and I am confident we have the right strategy to maximise shareholder value in the long term,” Rio Tinto chief executive Tom Albanese said.

The short-term macroeconomic outlook remains volatile, with major uncertainties around future US and European economic growth.  However, Rio Tinto is guardedly optimistic on China’s prospects. A number of recent macro leading indicators have beaten market expectations, suggesting early signs of economic pickup.  Rio Tinto expects this to continue in 2013, leading to a slight rise in Chinese GDP growth to above 8% in 2013.

Iron Ore

• Rio Tinto expects Chinese steel demand growth to peak at around one billion tonnes towards 2030
• Rio Tinto Iron Ore (RTIO) continues to be the Pilbara’s lowest cost, most productive operator
• The cash cost of production in the Pilbara was US$24.50 per tonne in the first half of 2012; the cost per tonne to deliver to China is US$47 per tonne, including royalties,  shipping and sustaining capital costs; this is expected to reduce when infrastructure expansions are in place
• Expansion of capacity in the Pilbara to 290 mt/a is on track for the fourth quarter of 2013 and on budget
• RTIO is reaping competitive advantage from innovation in technology and automation through Rio Tinto’s Mine of the Future™ programme
• Investment in Simandou, the largest undeveloped iron ore deposit in the world, will be phased as the Government of Guinea progresses its financing strategy and grants approvals for the next steps in developing rail and port infrastructure
• First shipment of ore is scheduled by mid-2015 
• The partnership with the Government of Guinea, the Chinalco consortium and the International Finance Corporation underpins the development strategy and risk management approach of the project

Diamonds & Minerals

• Global underlying macro-trends are driving mid-late cycle demand growth for minerals
• Rio Tinto is the largest producer of high grade titanium dioxide feedstocks with global feedstock capacity of around 2.2 million tonnes per annum
• The doubling of Rio Tinto’s stake in the Richards Bay Minerals TiO2 business is value-accretive and is expected to have a positive cash pay back within five years
• Co-products, including zircon, rutile, iron and steel, are recovered to generate substantial additional value
• A leading resource and technology position provides options to further expand mining and refining capacity by up to 50 per cent, subject to market conditions
• Rio Tinto has a strong underlying position in borates, with significant optionality to grow through projects like the development of the kernite processing plant at Boron in California 
• Options are being created to expand into complementary sectors. The Jadar Lithium-borate project in Serbia has the potential to supply 20 per cent of the lithium market.  The potash development joint venture in Canada is targeting a tier one resource suitable for solution mining with promising initial results
• In Diamonds, the Argyle underground development is progressing and the first crusher will be commissioned in the first quarter of 2013

Rio Tinto will benefit from three major sources of production growth in 2013 that include the expansion of 53 mt/a of iron ore production capacity as the Pilbara operations reach capacity of 290 Mt/a in the fourth quarter. The first commercial production from the Oyu Tolgoi copper-gold mine in the first half, following the successful conclusion of a power supply agreement earlier this month. The ongoing ramp up of the Yarwun 2 alumina refinery, which started production in the second half of 2012, and is already producing at around 90 per cent of nameplate capacity.

Website: http://www.riotinto.com

The Australian-born CEO wants to improve the company’s ability to investment against key rivals such as Newcrest Mining by the creation of a locally listed subsidiaries. Headquartered in Johannesburg, South Africa, AngloGold Ashanti has 20 operations in 10 countries on four continents. The CEO of AngloGold Ashanti wants to raise investor value, and expand the company’s gold production in more stable political environments based on the companies South African operations severely hampered this year by strikes.

AngloGold Ashanti’s South African operations accounted for approximately 32% of total group production during the first half of the year.

The production for the three months to September 30 2012 was 1.03Moz, which compares with guidance for the period of 1.07Moz to 1.10Moz at a unit total cash cost of $835/oz and $865/oz. The lower-than-expected production level was primarily due to continued labour unrest in South Africa and lower-than-anticipated production at Obuasi.

In Australia, Newcrest has Cadia Valley Operations (CVO) which is one of Australia’s largest gold mining operations and is 100% owned by Newcrest. In the financial year ending 30 June 2012, CVO produced 473,195 ounces of gold. From 1999 (when production started) to 30 June 2012, CVO has produced more than 7.1 million ounces of gold.

AngloGold, the world’s third largest gold producer, currently has two major mining interests in Australia with plans to establish a third via either exploration or consolidation.

“AngloGold Ashanti is well positioned… in terms of the assets we have… to play an important role, both as a miner and as a key economic agent in many of these countries…” Tito Mboweni Chairman said about the companies annual financial statments.

The company’s Sunrise Dam goldmine in Western Australia produced 250,000 ounces of gold and USD$385 million in revenue during 2011 despite heavy rains, while AngloGold also holds a 70% stake in the Tropicana project under development in the same state, which is expected to generate 470,000 – 490,000 ounces of gold per year during its first three years of operation.

According to Cutifani an Australian spin-off could possibly be worth several billion dollars but is unlikely to take place until 2014, after the company implements production targets of 5 million ounces globally and 1 million ounces in Australia.

According to the Australian AngloGold’s head Mark Cutifani said that he had fielded the idea before Australian investors during a trip to the country last week.

The Australian gold producer, offered to buy Integra Mining Ltd. (IGR) for A$426 million ($450 million) in shares to expand output.

Silver Lake is offering 1 new share for every 6.28 of its target, or 45.2 cents a share, Perth-based Silver Lake said today in a statement. That’s a 44 percent premium or A$426 million ($450 million) based on Friday’s closing price.

The deal to create a gold miner with a market value of nearly $1 billion.

“The strategic and financial logic of the combination is clear, driven by the complementary nature of the two companies’ projects and the strong organic growth profile of the combined business,” Les Davis, Silver Lake’s managing director, said in the statement.

Acquiring Integra may double Silver Lake’s annual output to as much as 250,000 ounces in 2012. Silver Lake and Integra said the deal would create a gold producer boasting a 6.6 million ounce resource base, with current production of 200,000 ounces projected to more than double in 2014. They added the combined firm would have A$107 million in cash.

Big split: John Hancock and Gina Rinehart with daughter Ginia.

Gina Rinehart’s son, John Hancock, has spoken publicly for the first time about Aboriginal elder Hilda Kickett, casting doubt on her claims that she is the illegitimate daughter of his grandfather, Lang Hancock.

Mrs Kickett spoke on A Current Affair last night about her relationship with Lang Hancock. During the interview, she claimed she had DNA evidence to prove the link to the Hancock family.

When asked if she was acknowledged by the family today, she said: “I know John and Bianca and I know a lot of the other family.”

Hilda Kickett now claims she has DNA evidence to prove she is Gina Rinehart’s half-sister. Photo: A Current Affair

Mrs Kickett said the children referred to her as “aunty”. “They are just like my own kids … There is nothing I wouldn’t do for them.”

But when contacted by Fairfax Media, John Hancock said in response: “My mother and others who I’ve spoken with who knew Lang well were of the view that Hilda is not Lang’s daughter,” he said. “I made the offer of a DNA test but I’ve never given one, nor did I hear anything back from Hilda.”

Hancock said his sister, Bianca, had never met Hilda in person. “I’ve met her twice during the inquest as she said she had information, and I met with a lot of people during that period – including a clairvoyant, who had visited Rose’s [Lang Hancock's third wife Rose Porteous] house a few times,” he said.

Mr Hancock said he called a few other senior Aboriginal women “aunty” as a polite endearment.

“If it’s something Hilda wants to find out for sure either way, I’m still prepared to take the test – but for accuracy’s sake, these articles should reflect [the fact that] I’ve not had the test, nor has any of my family, to determine if Hilda is related or not,” he said.

Mrs Kickett, who lived in an orphanage, said Lang occasionally arranged for her to visit him at various houses. “He was always in the background making sure I was all right,” she said.

Three of Mrs Rinehart’s four children – Hope, John and Bianca – are in a bitter legal battle with their mother over claims that she delayed the vesting date of the family trust.

But Mrs Kickett, who lives in Geraldton, north of Perth, said her life had been “far more rewarding than material stuff” and she would not launch a claim for a part of the family’s estate. “Why should I?” she said.

Mrs Kickett said Gina Rinehart did not talk to her but the Nine Network claimed her status as half-sister was acknowledged by Lang’s widow, Rose Porteous.

Adele Ferguson last week launched her unauthorised biography, Gina Rinehart, the untold story of the richest woman in the world.

- with Nathan Partenza

Read more: www.smh.com.au/

Rio Tinto chief executive Tom Albanese said “We are directing investment to projects that will generate the most attractive returns for shareholders and are resilient under any probable macroeconomic scenario. Our superior Pilbara iron ore business has one of the highest margins in the industry, low capital intensity of investment and a strong track record of completing projects on time and budget.

“Today’s announcement is in line with our long-held strategy of investing in and operating long-life, low-cost, tier one assets, and consistent with our view of the economic outlook. We are mindful of short-term uncertainties, and remain fully committed to a balanced approach to investment, while maintaining a single A credit rating and a progressive dividend policy.”

Rio Tinto is tightly managing its overall investment programme, retaining flexibility and taking steps to reduce and re-phase capital expenditure as appropriate. The project approvals announced today do not affect the previously announced capital expenditure outlook of US$16 billion in 2012.

Rio Tinto Iron Ore chief executive Sam Walsh said “We continue to see positive prospects for medium- to long-term iron ore demand driven by ongoing growth in Chinese consumption. We continue to forecast that annual Chinese steel production will grow from its current level of around 700 million tonnes to around one billion tonnes a year out towards 2030. This demand growth is coupled with an increasingly challenged supply response, as several high-profile competitor projects have recently been either delayed or postponed.

“Our Pilbara expansion is already well underway, positioning us to capture the opportunities of this market environment. And we have the natural advantages of a readily-expandable Rio Tinto-operated port and proximity to the Chinese market.

“The investment we and our partners are making in Simandou takes us a step further towards the phased development and ramp up of a new world-class iron ore resource.  Further investment will be made as the Government of Guinea progresses its financing strategy and grants approvals for the next steps in developing rail and port infrastructure. The experience gained in expanding our Pilbara operations will be invaluable as we develop Simandou.”

The US$4.2 billion (100 per cent basis US$6.2 billion) comprises:

Pilbara 353 million tonnes a year (Mt/a) iron ore expansion project and mine life extension, Western Australia
Rio Tinto investment of US$2.0 billion (100 per cent basis US$3.5 billion) over the next four years to complete the port and rail elements of the project to expand iron ore production capacity in the Pilbara to 353 Mt/a in the first half of 2015. Of the total US$3.5 billion investment for this infrastructure expansion, US$2.9 billion will be used for an additional two berths on the new Cape Lambert jetty and wharf, the replacement of the existing original Cape Lambert rail car dumper, and the Rail Capacity Enhancement project which includes a significant amount of rail track duplication and rolling stock improvements. US$570 million will be spent on a new gas-fired power station at Cape Lambert, which will be more energy-efficient and produce significantly lower carbon emissions than its predecessor.

A further US$1.7 billion (Rio Tinto share 100 per cent) of largely sustaining capital expenditure to extend the life of the Yandicoogina mine in the Pilbara to 2021 and expand its nameplate capacity from 52 Mt/a to 56 Mt/a. A wet processing plant will also be added in order to maintain product specification levels and provide a platform for future potential expansion. Extending the life of Yandicoogina demonstrates how Rio Tinto can derive additional value from its existing tier one Pilbara assets.

The key component of the project still requiring approval is further mine production capacity. The expansion is subject to a number of West Australian Government and joint venture partner approvals.

The expansion of the Pilbara iron ore business to 353 Mt/a consists of the following stages:
1. 225 Mt/a by Q1 2011 – Dampier port debottlenecking (complete)
2. 230 Mt/a by end Q1 2012 – Dampier port incremental (complete)
3. 283 Mt/a by Q4 2013 – Cape Lambert 53 Mt/a increment (in implementation)
4. 353 Mt/a in H1 2015  -  Cape Lambert 50 Mt/a increment and car dumper  replacement 20 Mt/a increment (infrastructure approved)

Simandou iron ore project, Guinea
Rio Tinto investment of US$501 million (100 per cent basis US$1 billion) in detailed design studies, early works and long-lead items. This is primarily for rail and port infrastructure with first commercial production planned for mid-2015. In Simandou, Rio Tinto plans staged funding approvals with its partners for a progressive ramp up of the operation which will become a long-life, low-cost operation producing one of the highest grade iron ores on the market.

Timing of the ramp up is dependent on receiving necessary approvals from the Government of Guinea and on the Government of Guinea progressing and finalising its financing strategy.
About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and New York Stock Exchange listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto’s business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, thermal and metallurgical coal, uranium, gold, industrial minerals (borax, titanium dioxide and salt) and iron ore. Activities span the world and are strongly represented in Australia and North America with significant businesses in Asia, Europe, Africa and South America.

For further information, please contact:

Media Relations, Australia / Asia
David Luff
Office:  +61 (0) 3 9283 3620
Mobile: +61 (0) 419 850 205
Karen Halbert
Office: +61 (0) 3 9283 3627
Mobile: +61 (0) 412 119 389
Bruce Tobin
Office: +61 (0) 3 9283 3612
Mobile: +61 (0) 419 103 454

Investor Relations, Australia
Dave Skinner
Office:  +61 (0) 3 9283 3628
Mobile: +61 (0) 408 335 309
Christopher Maitland
Office: +61 (0) 3 9283 3063
Mobile: +61 (0) 459 800 131

Media Relations, EMEA / Americas 
Illtud Harri
Office: +44 (0) 20 7781 1152
Mobile: +44 (0) 7920 503 600
Christina Mills
Office:  +44 (0) 20 7781 1154
Mobile: +44 (0) 7825 275 605

Investor Relations, London
Mark Shannon
Office:  +44 (0) 20 7781 1178
Mobile: +44 (0) 7917 576597
David Ovington
Office:  +44 (0) 20 7781 2051
Mobile: +44 (0) 7920 010 978

Media Relations, Canada
Bryan Tucker
Office: +1 (0) 514 848 8151
Mobile: +1 (0) 514 825 8319

Investor Relations, North America
Jason Combes
Office:  +1 (0) 801 204 2919
Mobile: +1 (0) 801 558 2645

Website: www.riotinto.com

Email: media.enquiries@riotinto.com enquiries.mediaaustralia@riotinto.com

Twitter: Follow @riotinto on Twitter

High resolution photographs and media pack available at:www.riotinto.com/media

AUSTRALIA – As FAIRFAX Regional Media, publisher of the Manning River Times, plans the launch a new social media site this month aimed specifically at the four million women who live in regional and rural Australia. More than 78 million Fairfax Media shares, or about 3.3 per cent of the company, changed hands today, raising speculation that the company’s major investor, Gina Rinehart, may be upping her stake.

Fairfax Media is Australasia’s largest multi-platform media group and has a portfolio of leading websites, tablet and smartphone apps, including the online news sites smh.com.au and theage.com.au in Australia and stuff.co.nz in New Zealand. For the six month period year ended 25 December 2011, Fairfax Media reported underlying revenues and profit after tax of $1.23 billion and $135.7 million respectively.

Most of the shares were traded around midday, at about 60.5-61 cents, by stockbroking firm Southern Cross Equities. Shares closed down 1 cent, or 1.6 per cent, at 60 cents.

In Australia, mastheads include The Sydney Morning Herald, The Age, The Australian Financial Review, The Canberra Times, The Sun-Herald, and The Land. In New Zealand mastheads include The Dominion Post, The Press, The Sunday Star-Times, TV Guide, NZ House and Garden, New Zealand Fishing News and Cuisine.

Funds management group Allan Gray Australia has also bought more shares in the Sydney-based publishing house in recent days, lifting its stake to more than 9 per cent, according to media reports.

But managing director Simon Marais this afternoon confirmed the group has not been buying Fairfax shares today.

There has been speculation about whether Mrs Rinehart, the media company’s largest investor, would buy more as she ratchets up the pressure on the board for two board positions. She recently confirmed to BusinessDay that she owned more than 13 per cent of the group.

A spokesperson for Mrs Rinehart was not available for comment.

Read more: [ smh.com.au ]

Rinehart’s appeal of the decision to strip her of a 25 per cent stake in the Rhodes Ridge property, which holds more than 3 billion tons of iron ore, is scheduled to begin today in the Supreme Court of Western Australia in Perth.

The appeal continues an 11-year dispute between the heirs of Lang Hancock and Peter Wright, whose iron-ore discoveries in WA in the 1950s and 1960s made Rinehart the richest person in the country and Wright’s children, Angela Bennett and Michael Wright, the 14th wealthiest, according to BRW’s Rich 200 list. That rich list recently tallied Rinehart’s fortune as some $US29 billion, making her the world’s richest woman.

Development of Rhodes Ridge may generate $US2.5 billion a year in operating profit for Rio Tinto Group, which owns half the project, and its joint venture partner, said Peter Strachan, a resources analyst at StockAnalysis.

“Iron ore is the new black,” Perth-based Strachan said in a telephone interview, referring to the current popularity of the commodity.

Iron ore has more than doubled to $US131.40 a ton as of June 8 from $US59.10 on March 27, 2009.

Biggest earner

Iron ore generates the most revenue for both London-based Rio Tinto and BHP Billiton. China is the largest customer for both companies, providing 31 per cent of sales to Rio and 28 per cent to BHP in their most recent financial years, according to data compiled by Bloomberg.

Read more: [ smh.com.au ]

Bonikro, in which Newcrest owns an 89.9 percent stake, began commercial production in 2008 and currently produces around four tonnes of gold annually.

“Newcrest has begun an extension in order to triple its production by 2017,” the statement read, adding that the company had already invested 157 billion CFA francs ($299.09 million) in the operation.

The Ivorian government, with its 10 percent stake in operating company LGL Mines CI, received a dividend payment of 155 million CFA last week.

Ivory Coast produces about 7 tonnes of gold per year, a figure it hopes to nearly double to 13 tonnes per year by 2013 thanks to the start-up of new mines According too Reuters.