Iron ore price to stay soft

Thursday, 23 February 2012

The record iron ore prices seen in 2011 are unlikely to be matched over the next six months, according to Pilbara exporters.Despite topping $US180 a tonne last year, the benchmark iron ore price has traded around $US140 a tonne in recent months, and BC Iron spokesman Morgan Ball said it was likely to stay there until midyear at least.''We are anticipating it will stay around that over the next six months,'' he said.

BC Iron is a junior exporter but is closely linked to Fortescue Metals Group through its 50-50 Nullagine joint venture, and Fortescue takes responsibility for selling BC Iron's product. Mr Ball's sentiments were matched by Sam Walsh, the boss of Australia's biggest iron ore exporter Rio Tinto.

Mr Walsh said there was still an ''element of softness'' in the iron price and the performance of the Chinese steel mills that buy most of Australia's ore. ''We believe we will go through a period of uncertainty probably in the first six months of this year, with volatility, but then we see some smoother sailing after that,'' he said. Mr Walsh said it was too early to know if the global iron ore price would be affected by a new tax imposed by the Chinese government on its domestic iron ore producers.

Reports on Friday suggested that China would raise its standard levy on Chinese iron ore producers from 60 per cent to 80 per cent in a bid to hamper marginal producers of the commodity. Mr Walsh said the move appeared to be aimed at reining in small Chinese producers of dubious environmental credentials and he did not believe it would dramatically affect the big Australian producers.
''I'm not expecting a huge impact, but time will tell,'' he said.

''It's an interesting development, a lot of people worry about whether China gets the message in relation to the environment, but they absolutely do.'' BC Iron has been exporting iron ore for almost a year and yesterday returned its first operating profit, of $5.5 million for the six months to December 31. BC Iron expects to export 3.5 million tonnes for the year to June 30, 2012.
(sourced Brisbane Times)

Iron ore price to remain volatile - BC Iron

Friday, 18 Nov 2011

BC Iron expects ongoing volatility in the iron ore price, but said that the market will remain healthy.

The spot iron ore price has softened in the past few months, but recently began tracking upwards, BC Iron chairman Tony Kiernan noted at the company's annual general meeting yesterday

Iron ore prices climbed to USD 139 a tonne earlier this week, after hitting a low of USD 115.85 in late October.

Record highs near USD 200 a tonne were reached earlier this year.

He said that "We will get the ups and downs of iron ore pricing in the next three to four years, but in general terms, we would expect a healthy market for the sale of our product.”

(sourced from Herald.com)

BC Iron to challenge withdrawal of Hong Kong takeover bid

The W. Australian junior has applied to Australia's Takeovers Panel to challenge the validity of Regent Pacific's decision to terminate a takeover bid for the company

By Ross Louthean
Mon, 21 Mar 2011

PERTH - BC Iron (ASX: BCI) said today it had written to Regent rejecting its "purported" termination of the Scheme Implementation Agreement (SIA) relating to its intention to takeover BC Iron, and requesting that it be withdrawn.

BC Iron's managing director Mike Young said the company intends to file an application with the Takeovers Panel shortly, seeking a declaration of "unacceptable circumstances and orders requiring it (Regent) to proceed in accordance with the SIA."

Young said the company remains committed to ensuring all its shareholders have an equal opportunity to consider the merits of the scheme of arrangement in a fully informed manner.

Prior to the purported termination of the SIA, the Scheme Booklet and associated documents were well progressed.

Young said should the Takeovers Panel decide to intervene and provide the requested relief, BC Iron will resume the process of finalising the Scheme Booklet and Independent Expert's Report and, as a first step, will be in a position to promptly lodge the Scheme Booklet with ASIC (Australian Securities & Investments Commission).

When the original bid by Hong Kong-based Regent was made BC Iron directors recommended the bid. The takeover would have valued BC Iron at A$345 million (US$346.7 million).

BC Iron had been placed in a trading halt last Thursday after its share price dipped more than 4% to around A$2.54 (US$2.55) after Regent Pacific confirmed it was dropping the bid.

The company became an iron ore producer last month when the first shipment of its ore from Nullagine in Western Australia's Pilbara was shipped from Port Hedland to China in its 50/50 joint venture with Fortescue Metals Group. Fortescue provides the rail and port infrastructure.
(sourced mineweb)

The war over third-party infrastructure access; Rio Tinto rejects Fortescue Metals Group's boast over rail access

March 01, 2011 12:00AM
By Andrew Burrell From The Australian

The war over third-party access to critical infrastructure in the Pilbara has escalated, with mining giant Rio Tinto rejecting billionaire Andrew Forrest's claim that his Fortescue Metals Group was the first to provide rail and port access to a junior miner.

In a statement released to the Australian Securities Exchange last week, Mr Forrest said Perth-based BC Iron had become the first miner with a stranded deposit to have its iron ore transported using another company's railway in the Pilbara. The ore came from the Nullagine project, a 50:50 joint venture between BC Iron and Fortescue, and was carried to Port Hedland using Fortescue's railway.

Mr Forrest hailed the move as "historic", saying it would prove to Rio and BHP Billiton that third-party access was possible despite their objections over many years.

"The final stake has been put into that lie," he said.

The comments angered Rio executives, who say Mr Forrest and BC Iron chief executive Mike Young were ignoring the fact that Rio's Hope Downs joint venture with Gina Rinehart's Hancock Prospecting had been producing and transporting iron ore for the past three years.

"Congratulations to Mike Young and BC Iron, but Andrew Forrest should know better. In fact, he does know better," a Rio spokesman said.

"Perhaps it simply slipped the minds of both men that Hancock Prospecting's iron ore has been routinely travelling on Rio Tinto's railways ever since December 2007. In fairness, it was a long time ago.

"I'm not surprised Andrew Forrest defines Hope Downs ore as not fitting his idea of what constitutes third-party ore, but he's just plain factually wrong. "Twenty six times a week, a train loaded with about 24,000 tonnes of iron ore leaves that mine, and that ore is not owned by Rio Tinto.

"It is owned by the Hope Downs JV, and it is marketed and sold as such. We are entitled to half of the proceeds, as is Hancock Prospecting."

A spokesman for Mr Forrest said he stood by the statements, saying the Nullagine JV operated differently to Hope Downs.

He said Rio had management control of the Hope Downs JV and once the ore left the mine it lost the Hope Downs "badge".

Tags : iron ore, steel mills, China, Australian Securities Exchange

BC Iron sends first Nullagine iron-ore shipment to China

Feb24, 2011
By Esmarie Swanepoel

PERTH (MiningWeekly)− ASX-listed BC Iron on Thursday joined the ranks of Australian iron-ore producers and exporters when it loaded 20 000 t of iron-ore from the Nullagine joint venture (JV) onto a ship in Port Hedland, for export to China.

The overland transport of the Nullagine iron-ore to port on partner Fortescue Metal’s rail line, marked the first time in Pilbara history that a junior miner had been able to transport iron-ore on a third party’s rail infrastructure.

“This loading today marks the newfound ability by smaller mining companies to use third-party rail and port access to develop otherwise stranded assets into revenue generators and job creators for the Australian economy,” said Fortescue Metals CEO Andrew Forrest.

BC Iron MD Mike Young said that the first ore ship from the Nullagine JV represented not only a significant milestone for the JV and its respective stakeholders, but also a wider significance to the iron-ore industry in the Pilbara region.

“First and foremost, we are pleased and excited that BC Iron has successfully transitioned from an explorer to producer, and we would like to acknowledge everyone that has played a role in making this milestone possible.

“The fact that we have the flexibility to put out a partial shipment is a testament to the close working relationship we have with Fortescue,” Young added.

The Nullagine project hosts a direct shipping ore (DSO) reserve of 36-million tons at 56,9% iron within a DSO resource of 50,7-million tons at 57% iron and an overall channel iron deposit resource of 89,1-million tons at 54,1% iron.

The project would have an initial production capacity of three-million tons a year, which would increase to five-million tons once Fortescue increased its infrastructure capacity.

The project remained on track to have shipped one-million tons of iron-ore by the end of June.

BC Iron is the third company to use Fortescue's Herb Elliott port to start iron-ore exports from Port Hedland.

The ship carrying the Nullagine JV ore was expected to set sail over the weekend.

Edited by:Mariaan Webb Tags: third party rail and port access, Direct Shipping Iron Ore DSO,

Australia Fortescue-BC Iron JV to load first iron ore on rail in Jan

Singapore (Platts) --21 Jan, 2011

Australia's Fortescue Metals Group said Friday it expects to load the first train of iron ore by the end of January from its joint venture with BC Iron, the target of a complete takeover by a Hong Kong mining company. "Fortescue looks forward to loading the first ore train using iron ore from its joint venture with BC Iron shortly," said Cameron Morse of FD, a public relations firm engaged by Fortescue.
BC Iron's board of directors on Friday recommended shareholders to accept a bid by Hong Kong-listed Regent Pacific Group to buy the remaining shares of BC Iron it does not own for A$3.30($3.26)/share, valuing it at A$345 million. Regent now holds 19.9% of the company. BC Iron's 50:50 joint venture with Fortescue, the Nullagine project in Australia's Pilbara region, will use the latter's infrastructure at Christmas Creek to rail its ore to Port Hedland for export. Mining started in November 2010 and the first shipment will take place in the first quarter of 2011, it said. BC Iron plans to export 1 million mt by June, when it expects to mine at a rate of 3 million mt/year. Sourced:Platts.com

Australia's BC Iron agrees $341 million bid by Regent Pacific

Thu Jan 20, 2011 11:02pm GMT

* Cash offer a 4pct premium to last trade

* Regent says no change to BC Iron management, strategy

* Consolidated Minerals biggest shareholder (Adds detail)

SYDNEY, Jan 21 (Reuters) - Australia's BC Iron has recommended a cash takeover offer from major shareholder Hong Kong's Regent Pacific Group in a deal valuing the company at A$345 million ($341 million).

Regent, which is BC Iron's second-largest shareholder with a 19.87 percent stake, is offering A$3.30 cash per share. The offer is a 4 percent premium to BC Iron's last trading price of A$3.17.

BC Iron's biggest shareholder is Consolidated Minerals, owned by Ukrainian billionaire Gennadiy Bogolyubov's Palmary Enterprises.

BC Iron and Regent's shares were placed in a trading halt on Wednesday pending the transaction. BC Iron's core asset is its Nullagine coal project, a 50-50 joint venture with Fortescue Metals .

"Regent Pacific is seeking to be a long term player in both the growth and development of BC Iron and the Australian iron ore sector," Regent Pacific Chief Executive Jamie Gibson said, adding there were no plans to change the target's current management or strategy.

The venture plans to utilise Fortescue's transport facilities at its Christmas Creek iron ore mine, 50 kilometres south of Nullagine, to rail ore to Port Hedland for shipping to overseas steel mills.

Iron ore is currently being stockpiled and the first shipment from Port Hedland is expected in the first quarter of 2011 -- four years after BC Iron listed on the Australian stock market. The company plans to export 1 million tonnes by June 2011 and then operate at an annual rate of 3 million tonnes.

Under the terms of the partnership, Fortescue buys BC Iron's share of the iron ore at the "mine gate" and assumes responsibility for shipping and marketing.

Fortescue is already operating at an annual rate of 40 million tonnes and is looking to boost that to 55 million this year.

Spot iron prices are trading at their highest level since April 2010.

($1 = 1.012 Australian Dollars)

(source: Reuters, Reporting by Michael Smith; editing by Balazs Koranyi)