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Released March 03, 2016 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--By most measures, last year was not kind to global metals and mining companies. Slammed with low commodities prices, at least four of the mining majors reported big losses for 2015. Still, executives maintain hope that prices have shown signs of bottoming out.
Much of the drop in metals and minerals prices has been pinned to China's economic slowdown. For related information, see January 19. 2016, article - Delayed Project Spending Characterizes Oceania's New Mining Cycle, January 20, 2016, article - China Remains the Elephant in the Room for 2016 World Steel Outlook and February 18, 2016, article - Mining Industry's Struggles are on Full Display at Africa's Indaba Conference, Industrial Info Gauges the Terrain.
Glencore
On Tuesday, Glencore plc (Baar, Switzerland) reported a net loss of $4.9 billion for 2015, compared with earnings of $2.3 billion in 2014. The company produces copper, zinc, nickel and ferroalloys. It also processes and sells bauxite, alumina primary aluminum and aluminum alloys as well as trading iron ore. In addition, it has substantial energy-related assets.
Glencore has cut its planned capital expenditures to $3.5 billion for 2016, down $300 million from its earlier guidance. Capital expenditures for 2015 totaled $5.7 billion. For related information, see December 11, 2015 article - Glencore Further Slashes 2016 Capex, to Defer Expansions.
As part of the cutback in expenditures, Glencore said it plans to slow down and defer expansions, including copper-related projects in Africa.
Industrial Info is tracking 95 active Glencore projects worth $15.99 billion. Roughly $14 billion of that amount is tied to projects still in the planning phases, where plenty of factors could increase, decrease or eliminate the expected spending. Less than $1 billion is for projects now under construction. Congo leads in project value at $4.4 billion, followed by Canada at $3.8 billion and Argentina at $3 billion.
The company's planned $3 billion El Pachon copper and molybdenum mine and concentrator would be located 180 kilometers west of San Juan, Argentina. The operation would produce 400,000 tons per year of fine copper and molybdenum. Construction is set for kickoff in early 2017, with completion in mid-2018.
Glencore executives say they are prepared for even lower prices, and have targeted $400 million in cuts to operating expenses this year.
Vale
Last week, Brazil-based mining giant Vale S.A. (NYSE:VALE) (Rio de Janeiro) reported it swung to a $12.1 billion loss in 2015 from a profit of $657 million in 2014, largely as a result of the fall in the price of iron ore and the 47% devaluation of the Brazilian real. Chief Financial Officer Luciano Siani Pires said during an earnings conference call that the company now has a capital expenditure target of $5.5 billion for 2016, compared with $8.4 billion in 2015.
The price of iron ore averaged $55.50 per ton in 2015, according to Vale, down 42% from 2014, driven by an oversupply of ore amid lower than expected steel production in China. Vale indicated that it expects conditions in 2016 to be about the same as last year, as no major stimulus is expected from the Chinese government to boost investments.
Vale was also affected last year by the Samarco dam disaster in Brazil. In what has been called one of the biggest environmental disasters in Brazil's history, a dam owned by Samarco Mineracao SA burst and killed 19 people and polluted a major river. Samarco is a joint mining venture between Vale and BHP Billiton (NYSE:BHP) (Melbourne, Australia). BHP Billiton announced Wednesday Samarco will pay between $1.7 billion and $2.3 billion through 2021 as part of a deal with the Brazilian government to settle a lawsuit stemming from the disaster.
Despite its woes, Vale said it is persevering with a number of capital investments, including the S11D mine project. Located 60 kilometers southwest of Parauapebas City in Brazil, the iron ore mine and concentrator, along with a supporting railway and terminal port expansion, are part of a $19 billion project. The 90 million ton-per-year open pit mine will expand capacity at the Carajas mining complex to 230 million tons per year.
Industrial Info is tracking $38.4 billion in Vale-related projects. Roughly 70% of those planned expenditures is tied to projects already under construction. Industrial Info is tracking $28.5 billion in Vale project development in Brazil, $6 billion in Canada and $2.6 billion in Indonesia.
Rio Tinto
Rio Tinto plc (NYSE:RIO) (London, England), meanwhile, reported an $866 million loss for 2015, compared with a $6.5 billion profit for 2014.
As a result, Chief Executive Sam Walsh said the company is "embarking on a new round of proactive measures to cut our operating costs by a further $1 billion in 2016 followed by an additional goal of $1 billion in 2017. We are also reducing our capital expenditure to $4 billion in 2016 and $5 billion in 2017, an overall reduction of $3 billion compared with our previous guidance." Capital expenditures for 2015 were nearly $4.7 billion.
Industrial Info is tracking $28.6 billion worth of Rio Tinto projects. Roughly 90% of that comes from projects still in their planning stages. The company's Australia projects amount to $7.4 million, while planned investments total $6.9 billion in the U.S. and $5 billion in Mongolia.
Rio Tinto's planned restart of the Magma Copper Mine near Superior, Arizona has a $6 billion price tag. The project, which includes a concentrator addition, would produce 600,000 tons per year. Construction is currently slated to start in mid-2017, with completion in mid-2020.
BHP Billiton
Finally, BHP Billiton reported a loss of $5.7 billion for the last half of 2015, compared with a profit of nearly $4.3 billion in the same period of 2014.
Capital and exploration expenditures totaled $3.6 billion for the six month period ended December 31, a 40% reduction from $6 billion for the same period in 2014.
For all of 2016, the company said it expects to spend $7 billion on capital projects and exploration. For the fiscal year ended June 30, 2015, the company reported $11 billion in capital expenditures.
In addition to producing copper, iron and nickel, BHP Billiton is heavily involved in liquefied natural gas (LNG) and oil production.
Industrial info is tracking $17.92 billion in active BHP projects. More than $7.8 billion is tied to projects still in the planning phases. Final commissioning for the company's $3.8 billion Escondida OPG1 Expansion Copper Concentrator Addition, located 50 kilometers southeast of Antofagasta, is expected this April.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Much of the drop in metals and minerals prices has been pinned to China's economic slowdown. For related information, see January 19. 2016, article - Delayed Project Spending Characterizes Oceania's New Mining Cycle, January 20, 2016, article - China Remains the Elephant in the Room for 2016 World Steel Outlook and February 18, 2016, article - Mining Industry's Struggles are on Full Display at Africa's Indaba Conference, Industrial Info Gauges the Terrain.
Glencore
On Tuesday, Glencore plc (Baar, Switzerland) reported a net loss of $4.9 billion for 2015, compared with earnings of $2.3 billion in 2014. The company produces copper, zinc, nickel and ferroalloys. It also processes and sells bauxite, alumina primary aluminum and aluminum alloys as well as trading iron ore. In addition, it has substantial energy-related assets.
Glencore has cut its planned capital expenditures to $3.5 billion for 2016, down $300 million from its earlier guidance. Capital expenditures for 2015 totaled $5.7 billion. For related information, see December 11, 2015 article - Glencore Further Slashes 2016 Capex, to Defer Expansions.
As part of the cutback in expenditures, Glencore said it plans to slow down and defer expansions, including copper-related projects in Africa.
Industrial Info is tracking 95 active Glencore projects worth $15.99 billion. Roughly $14 billion of that amount is tied to projects still in the planning phases, where plenty of factors could increase, decrease or eliminate the expected spending. Less than $1 billion is for projects now under construction. Congo leads in project value at $4.4 billion, followed by Canada at $3.8 billion and Argentina at $3 billion.
The company's planned $3 billion El Pachon copper and molybdenum mine and concentrator would be located 180 kilometers west of San Juan, Argentina. The operation would produce 400,000 tons per year of fine copper and molybdenum. Construction is set for kickoff in early 2017, with completion in mid-2018.
Glencore executives say they are prepared for even lower prices, and have targeted $400 million in cuts to operating expenses this year.
Vale
Last week, Brazil-based mining giant Vale S.A. (NYSE:VALE) (Rio de Janeiro) reported it swung to a $12.1 billion loss in 2015 from a profit of $657 million in 2014, largely as a result of the fall in the price of iron ore and the 47% devaluation of the Brazilian real. Chief Financial Officer Luciano Siani Pires said during an earnings conference call that the company now has a capital expenditure target of $5.5 billion for 2016, compared with $8.4 billion in 2015.
The price of iron ore averaged $55.50 per ton in 2015, according to Vale, down 42% from 2014, driven by an oversupply of ore amid lower than expected steel production in China. Vale indicated that it expects conditions in 2016 to be about the same as last year, as no major stimulus is expected from the Chinese government to boost investments.
Vale was also affected last year by the Samarco dam disaster in Brazil. In what has been called one of the biggest environmental disasters in Brazil's history, a dam owned by Samarco Mineracao SA burst and killed 19 people and polluted a major river. Samarco is a joint mining venture between Vale and BHP Billiton (NYSE:BHP) (Melbourne, Australia). BHP Billiton announced Wednesday Samarco will pay between $1.7 billion and $2.3 billion through 2021 as part of a deal with the Brazilian government to settle a lawsuit stemming from the disaster.
Despite its woes, Vale said it is persevering with a number of capital investments, including the S11D mine project. Located 60 kilometers southwest of Parauapebas City in Brazil, the iron ore mine and concentrator, along with a supporting railway and terminal port expansion, are part of a $19 billion project. The 90 million ton-per-year open pit mine will expand capacity at the Carajas mining complex to 230 million tons per year.
Industrial Info is tracking $38.4 billion in Vale-related projects. Roughly 70% of those planned expenditures is tied to projects already under construction. Industrial Info is tracking $28.5 billion in Vale project development in Brazil, $6 billion in Canada and $2.6 billion in Indonesia.
Rio Tinto
Rio Tinto plc (NYSE:RIO) (London, England), meanwhile, reported an $866 million loss for 2015, compared with a $6.5 billion profit for 2014.
As a result, Chief Executive Sam Walsh said the company is "embarking on a new round of proactive measures to cut our operating costs by a further $1 billion in 2016 followed by an additional goal of $1 billion in 2017. We are also reducing our capital expenditure to $4 billion in 2016 and $5 billion in 2017, an overall reduction of $3 billion compared with our previous guidance." Capital expenditures for 2015 were nearly $4.7 billion.
Industrial Info is tracking $28.6 billion worth of Rio Tinto projects. Roughly 90% of that comes from projects still in their planning stages. The company's Australia projects amount to $7.4 million, while planned investments total $6.9 billion in the U.S. and $5 billion in Mongolia.
Rio Tinto's planned restart of the Magma Copper Mine near Superior, Arizona has a $6 billion price tag. The project, which includes a concentrator addition, would produce 600,000 tons per year. Construction is currently slated to start in mid-2017, with completion in mid-2020.
BHP Billiton
Finally, BHP Billiton reported a loss of $5.7 billion for the last half of 2015, compared with a profit of nearly $4.3 billion in the same period of 2014.
Capital and exploration expenditures totaled $3.6 billion for the six month period ended December 31, a 40% reduction from $6 billion for the same period in 2014.
For all of 2016, the company said it expects to spend $7 billion on capital projects and exploration. For the fiscal year ended June 30, 2015, the company reported $11 billion in capital expenditures.
In addition to producing copper, iron and nickel, BHP Billiton is heavily involved in liquefied natural gas (LNG) and oil production.
Industrial info is tracking $17.92 billion in active BHP projects. More than $7.8 billion is tied to projects still in the planning phases. Final commissioning for the company's $3.8 billion Escondida OPG1 Expansion Copper Concentrator Addition, located 50 kilometers southeast of Antofagasta, is expected this April.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
