Surely if the Rio expansion spend is confirmed that will be good news for CGH and others? See AFR and Bloomberg reports below. Rio 9 May AGM will be interesting.
Rio Tinto chief bullish on Pilbara expansion
Journalist: Jamie Freed Date: 7 May 2013 Publication: The Australian Financial Review Page: 5
Rio Tinto chief executive Sam Walsh is highly confident the miner will approve the final portions of an expansion to 360?million tonnes of iron ore capacity in the Pilbara this year despite clamping down on other spending.
Analysts who attended a briefing with Mr Walsh in Sydney on Monday said $US4.3?billion of spending on new mines appeared very likely to be approved by the Rio board.
“The message was barring a black swan event in North Korea the project is likely to go ahead,” JPMorgan analyst Lyndon Fagan said.
Rio has already approved the spending on infrastructure needed for the project, which is due to be completed in 2015 and will lift its production capacity from 290 million tonnes expected by the third quarter of this year.
Rio Said to Pursue $5 Billion Iron-Ore Expansion as Glut Looms 2013-05-06 14:00:01.1 GMT
By Elisabeth Behrmann May 7 (Bloomberg) -- Rio Tinto Group, the world’s second- biggest miner, will probably pursue a $5 billion expansion of its iron-ore output in Australia, Chief Executive Office Sam Walsh said, according to two people present at a meeting with investors and analysts. The board is expected to approve in the fourth quarter an increase in annual production to 360 million metric tons from 290 million tons unless there are significant changes to the global demand-supply situation, Walsh told the gathering, the people said. Chief Financial Officer Chris Lynch in Sydney also attended, said the people, who asked not to be identified because the meeting yesterday was not open to the media. Iron ore is set for its first surplus in at least a decade as output expands and Chinese mills, the biggest buyers, boost production at the slowest pace in five years. The steelmaking ingredient was Rio’s most profitable unit last year, providing 78 percent of earnings before interest, tax, depreciation and amortization, according to data compiled by Bloomberg. A deferral of Rio’s expansion would help keep the iron-ore market stable until 2018, underpinning prices, Citigroup Global Markets Ltd. analysts Heath Jansen and Jon Bergtheil said in a report last week. They also questioned the move after Walsh said in February the London-based company would pursue an “unrelenting focus” to increase shareholder value. David Luff, a Melbourne-based spokesman for Rio Tinto, declined to comment on the expansion. Rio held meetings in Sydney yesterday before the company’s Australian leg of its annual meeting on May 9.
CGH Price at posting:
37.0¢ Sentiment: None Disclosure: Not Held
