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Daily Iron Ore Price, Commodities and Precious Metals Update - November 2013
Topic Started: 4 Nov 2013, 01:05 PM (11,997 Views)
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Rio Tinto looking to cut spending

December 3, 2013 - 9:19AM
Brian Robins

Global miner Rio Tinto has flagged further cuts in capital spending over the next two years against the backdrop of expected continued financial market volatility.

In an address to analysts today, the company said 2014 capital spending will fall to $11 billion and to $8 billion in 2015.

This compares with outlays for 2014 of "below $14 billion", down 20 per cent, it said.

Read more: http://www.smh.com.au/business/mining-and-resources/rio-tinto-looking-to-cut-spending-20131203-2ymqj.html
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Fortescue to pay down debt

December 3, 2013 - 8:16AM
Peter Ker

Fortescue Metals Group has vowed to keep its debt repayments flowing fast, with another $US3 billion ($3.3 billion) to $US4 billion to be wiped off the ledger over the the next year or so.

The iron ore miner is in the final weeks of a two year, debt-fuelled expansion which saw Fortescue rack up close to $US12 billion in gross debt at its peak.

But Fortescue has started paying down that pile in recent months, with three separate installments worth just over $US1 billion, and chief financial officer Stephen Pearce hinted on Monday that up to $US5 billion in total could be paid off within 18 months.

"If we repay about $US4 or $US5 billion dollars of debt that will get us down to the gearing levels that we are targeting around that 40 per cent mark,'' he said.

"We've already done $US1.2 billion just about, and you should expect to see us do the rest in a pretty short time."

With capital spending about to drop away to negligible levels, Fortescue will be able to devote a much bigger slice of its revenue to paying down debt and paying dividends to shareholders.

Fortescue surprised the market in August with a bigger than expected dividend of 10 cents per share, and chief financial officer Nev Power indicated on Monday that dividends should continue to strengthen.

"As we pay down debt we will continue to Increasing our dividend pay out until we get to a fixed or semi fixed dividend payout ratio," he said.

Read more: http://www.smh.com.au/business/mining-and-resources/fortescue-to-pay-down-debt-20131203-2ymos.html
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Perthite
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Rio really has the axe sharpened.
Edited by Perthite, 3 Dec 2013, 12:02 PM.
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Perthite
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Basically a 50% cut by 2015.

http://au.news.yahoo.com/thewest/business/a/-/national/20127898/frugal-rio-to-nearly-halve-capex/
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Perthite
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Heard some chatter about the 20 billion dollar expansion of the outer harbour in Port Hedland which was delayed by BHP last year.

Apparently they had planned to look at the issue again.... Instead they are putting it off again.

I guess this is one the bulls should keep their eye on. One would think it could happen soon.

Edited by Perthite, 4 Dec 2013, 08:36 PM.
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Pig Iron
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Perthite
4 Dec 2013, 08:24 PM
Heard some chatter about the 20 billion dollar expansion of the outer harbour in Port Hedland which was delayed by BHP last year.

Apparently they had planned to look at the issue again.... Instead they are putting it off again.

I guess this is one the bulls should keep their eye on. One would think it could happen soon.

BHP have given up a lot of revenue by delaying their iron ore expansions. i suspect they will start playing catch up in 2014 and that will mean the outer harbor in some form as well as rail and mine expansions.

if anyone needed anymore proof, DLS has claimed it'll never happen and that BHP have got iron ore wrong. reliable contrarian factor right there folks.

http://www.macrobusiness.com.au/2013/10/bhp-turns-bullish-on-iron-ore/
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Perthite
3 Dec 2013, 02:02 PM
The dreamers here think ore shipments will be maintained but I know a guy in Sandvik who tells me the head hunters are gutting the mining service side as well as the construction branch. Why sack all those staff unless current levels of crusher referb etc will not be needed. There are some big shutdowns on the horizon I think.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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Perthite
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I know there is some things happening which are hard to understand.

I mean my friend recently got a job with Rio. So they are hiring. Then you hear of the job losses.

It seems staff are being rolled over. Older more experienced staff with higher pays may be being replaced with fresh faces on lower pay packets.
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Pig Iron
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Perthite
4 Dec 2013, 10:31 PM
I know there is some things happening which are hard to understand.

I mean my friend recently got a job with Rio. So they are hiring. Then you hear of the job losses.

It seems staff are being rolled over. Older more experienced staff with higher pays may be being replaced with fresh faces on lower pay packets.
typically they close out unfilled positions first. so when you hear of 3000 job loses, it really means 3000 POSITIONS, filled or unfill is anyones guess. it's why the press doesn't match what's really happening.

redundancies are expensive and the last resort.
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