Australia's markets watchdog is suing the country's third-largest iron ore miner, Fortescue Metals, and its chief, Andrew Forrest, accusing them of misleading investors over Chinese deals struck five years ago.
The Australian Securities and Investments Commission (ASIC) said it would also ask the courts to consider barring Forrest, the company's billionaire founder, from being a company director.
Fortescue shares fell as much as 8% on Friday on the prospect of Forrest being forced out of the company, which said it would defend itself.
"We are very conscious that what's been presented has not been supported by the facts and we will defend it vigorously," executive director Graeme Rowley told reporters in Melbourne.
"We've done a considerable amount of work in preparing for this case and we are going to defend the given allegations."
The ASIC is also seeking fines of up to A$6m ($4.3m) against Fortescue and up to A$4.4m against Forrest, who had turned the company from a speculative penny stock into one of Australia's biggest mining stocks.
"It's more about him as an individual than the company," said Steve Robinson, fund manager with Alleron Investment Management, adding that the potential fines were insignificant.
"You would have to say, he was the driver of Fortescue," he said, noting, however, that the company would be much better able to manage without Forrest now than during its infancy.
Forrest was Australia's richest person at the height of the commodities boom last year. He was then worth $7bn.
The former stockbroker carved out his fortune with the help of Chinese firms, which were eager to fund Fortescue and create a rival supplier to Australia's two dominant iron ore miners, Rio Tinto and BHP Billiton.
Earlier this week, Fortescue won approval for a Chinese customer, state-owned Hunan Valin Iron and Steel Group, to take a 17.55% direct stake in the company for $438m.
The ASIC case was unlikely to affect that deal, Robinson said.
The commission said its case against Fortescue involved announcements the firm made between August and November 2004 about agreements with three state-owned Chinese firms that signed up to fund new mining and transport infrastructure.
Fortescue announced in November 2004 that China Railway Engineering Corp, China Metallurgical Engineering Construction Group Corp and China Harbour Engineering Corp had agreed to finance and build a A$1.85bn ($1.32bn) mining-rail-port project for Fortescue in northwest Australia.
Four months later, the Chinese trio's lead negotiator, China Metallurgical, was quoted by the Australian Financial Review as saying the agreements were not legally binding and as expressing doubts about Fortescue's iron ore reserves.
"ASIC alleges that Fortescue engaged in misleading and deceptive conduct by overstating the substance and effect of agreements with the three Chinese companies, in announcements and media releases made to the market and investors," it said.
Between the relevant dates cited by the commission for its complaints against Fortescue - 23 August and 9 November, 2004 - the company's share price jumped almost four-fold.
Tuesday, April 7, 2009
Shelby Fined for Mine Safety
Shelby Mining has been fined $280,000 by the US Government after two of its miners were seriously burned in an incident last year.
The Mine Safety & Health Administration (MSHA) said that worn cutter bits at the firm’s coke mine came into contact with the roof of the rock and friction ignited the air-methane mixture in October 2008.
In addition, it found Shelby had failed to carry out effective water sprays or take air readings.
MSHA deputy assistant secretary for operations Michael Davis said that Shelby failed in its responsibilities as a mine operator.
“The stated obligation of every mine operator is to seek out and eliminate safety and health hazards that may adversely affect its employees. In this instance, the foreman sailed to so that and a serious, yet avoidable accident, occurred,” he said.
In total, Shelby was charged with three unwarrantable failure violations.
The Mine Safety & Health Administration (MSHA) said that worn cutter bits at the firm’s coke mine came into contact with the roof of the rock and friction ignited the air-methane mixture in October 2008.
In addition, it found Shelby had failed to carry out effective water sprays or take air readings.
MSHA deputy assistant secretary for operations Michael Davis said that Shelby failed in its responsibilities as a mine operator.
“The stated obligation of every mine operator is to seek out and eliminate safety and health hazards that may adversely affect its employees. In this instance, the foreman sailed to so that and a serious, yet avoidable accident, occurred,” he said.
In total, Shelby was charged with three unwarrantable failure violations.
AngloGold Q1 Output Lower Than Forecast
AngloGold Ashanti Ltd expects its first-quarter output to be 2.5% lower than its previous guidance partly owing to safety stoppages, it said on Thursday.
Output in the quarter to end March was seen at 1.1 million ounces compared with the previous guidance of 1.13 million ounces, a drop which would impact on per unit cash costs during the quarter, AngloGold said in a statement.
The group, which has 21 operations across four continents, also attributed the production downfall to a slower start-up in mines after the Christmas break and a plant breakdown at its Geita mine in Tanzania.
Geita has had a few difficult years with output below expectations.
AngloGold said all the issues at the affected mines had been resolved, adding all other mines either achieved or exceeded their targets set for the quarter.
AngloGold recorded strong performances from its Sunrise Dam in Australia, Siguiri mine in Guinea and Ghana's Obuasi mine, where the company said it was achieving its turnaround targets.
"We've successfully addressed a number of challenges in the first quarter, while continuing our drive to improve safety," chief executive officer Mark Cutifani said.
"I'm confident that we remain well placed to meet our objectives for the year."
The guidance for the full year of production between 4.9 million to 5.0 million ounces at a total cash cost of $435 to $450 an ounce was based on a rand-dollar conversion of R9.75 and a fuel price of $50 per barrel remained unchanged, it said.
In 2008, AngloGold produced 4.98 million ounces of gold from its operations, an estimated 7% of global production.
By Agnieszka Flak and James Macharia, Reuters
Output in the quarter to end March was seen at 1.1 million ounces compared with the previous guidance of 1.13 million ounces, a drop which would impact on per unit cash costs during the quarter, AngloGold said in a statement.
The group, which has 21 operations across four continents, also attributed the production downfall to a slower start-up in mines after the Christmas break and a plant breakdown at its Geita mine in Tanzania.
Geita has had a few difficult years with output below expectations.
AngloGold said all the issues at the affected mines had been resolved, adding all other mines either achieved or exceeded their targets set for the quarter.
AngloGold recorded strong performances from its Sunrise Dam in Australia, Siguiri mine in Guinea and Ghana's Obuasi mine, where the company said it was achieving its turnaround targets.
"We've successfully addressed a number of challenges in the first quarter, while continuing our drive to improve safety," chief executive officer Mark Cutifani said.
"I'm confident that we remain well placed to meet our objectives for the year."
The guidance for the full year of production between 4.9 million to 5.0 million ounces at a total cash cost of $435 to $450 an ounce was based on a rand-dollar conversion of R9.75 and a fuel price of $50 per barrel remained unchanged, it said.
In 2008, AngloGold produced 4.98 million ounces of gold from its operations, an estimated 7% of global production.
By Agnieszka Flak and James Macharia, Reuters
Afghanistan Opens Giant Iron Ore Deposit to Tender
Afghanistan is looking for mining firms to open up a huge iron deposit, holding an estimated 1.8 billion tonnes of high quality ore, but potential bidders face a volatile security situation in a remote, mountainous region.
The Ministry of Mines is offering mineral rights to the Hajigak iron deposit and surrounding areas through a tender process expected to end in a mining contract, it said in an undated statement posted on its website.
The ore has a high iron content of 62%, and the deposits are suitable for open pit mining, ministry documents said. There are 16 ore bodies, extending for as much as 5km and to depths of over 550m.
The deposits are only 130km west of the capital Kabul, but the terrain is remote and mountainous.
It is also situated on the edge of an area which has seen a sharp rise in insurgent activity over the last two years, as the government struggles to fight a growing Taliban offensive.
Maps in a prospectus for potential bidders showed veins of ore reaching down the side of a hill and there is potential for more deposits in the surrounding area, although there is also some room for the mine's prospects to disappoint.
Measured, proven, indicated and probable reserves are only 111 million tonnes. The remainder of the advertised deposit, identified by Afghan-Soviet exploration teams in the 1960s, is inferred, possible and hypothetical reserves, a brochure said.
Nearby seams of coking coal would make it possible to set up an integrated iron and steel complex with a blast furnace.
Mineral wealth
Afghanistan currently relies on aid for around 90% of its budget, but its mines minister told Reuters last month the country is sitting on vast reserves of mineral wealth.
A US Geological Survey (USGS) had shown the war-torn nation may hold far higher amounts of minerals than previously thought, with iron deposits alone estimated at between five to six billion tonnes, minister Mohammad Ibrahim Adel said.
He urged foreign firms to invest in the sector, and said he did not think the security situation would deter them.
China's top integrated copper producer, Jiangxi Copper Co, and China Metallurgical Group Corp, are going ahead with exploration of the vast Aynak Copper Mine, south of Kabul, after they won the contract to develop it last year.
Potential bidders for the Hajigak project must have evidence of successful investment and technical management of iron ore exploration and development, and of operating in a socially and environmentally friendly way, the ministry said.
Expressions of interest must arrive by the end of April, the document said, and Kabul is keen to speed development.
"Given that natural resources are a priority for the economic development of Afghanistan, the ministry is interested in those companies that will commit to development of the Hajigak deposit on an accelerated basis," the statement said.
By Emma Graham-Harrison, Reuters
The Ministry of Mines is offering mineral rights to the Hajigak iron deposit and surrounding areas through a tender process expected to end in a mining contract, it said in an undated statement posted on its website.
The ore has a high iron content of 62%, and the deposits are suitable for open pit mining, ministry documents said. There are 16 ore bodies, extending for as much as 5km and to depths of over 550m.
The deposits are only 130km west of the capital Kabul, but the terrain is remote and mountainous.
It is also situated on the edge of an area which has seen a sharp rise in insurgent activity over the last two years, as the government struggles to fight a growing Taliban offensive.
Maps in a prospectus for potential bidders showed veins of ore reaching down the side of a hill and there is potential for more deposits in the surrounding area, although there is also some room for the mine's prospects to disappoint.
Measured, proven, indicated and probable reserves are only 111 million tonnes. The remainder of the advertised deposit, identified by Afghan-Soviet exploration teams in the 1960s, is inferred, possible and hypothetical reserves, a brochure said.
Nearby seams of coking coal would make it possible to set up an integrated iron and steel complex with a blast furnace.
Mineral wealth
Afghanistan currently relies on aid for around 90% of its budget, but its mines minister told Reuters last month the country is sitting on vast reserves of mineral wealth.
A US Geological Survey (USGS) had shown the war-torn nation may hold far higher amounts of minerals than previously thought, with iron deposits alone estimated at between five to six billion tonnes, minister Mohammad Ibrahim Adel said.
He urged foreign firms to invest in the sector, and said he did not think the security situation would deter them.
China's top integrated copper producer, Jiangxi Copper Co, and China Metallurgical Group Corp, are going ahead with exploration of the vast Aynak Copper Mine, south of Kabul, after they won the contract to develop it last year.
Potential bidders for the Hajigak project must have evidence of successful investment and technical management of iron ore exploration and development, and of operating in a socially and environmentally friendly way, the ministry said.
Expressions of interest must arrive by the end of April, the document said, and Kabul is keen to speed development.
"Given that natural resources are a priority for the economic development of Afghanistan, the ministry is interested in those companies that will commit to development of the Hajigak deposit on an accelerated basis," the statement said.
By Emma Graham-Harrison, Reuters
Australia's Fortescue on Trial over China Deals
Fortescue Metals Group, Australia's third-largest iron ore miner, misled markets five years ago about deals it struck with Chinese firms, Australia's securities watchdog told a court hearing on Monday.
The Australian Securities and Investments Commission laid the charges last week, seeking fines of up to A$6m ($4.3m) from Fortescue and A$4.4m from its chief executive and billionaire founder, Andrew Forrest.
At the heart of the five-week trial is a series of statements Fortescue made in 2004 about agreements with China Railway Engineering Corp (CREC), China Metallurgical Engineering Construction Group Corp (CMCC) and China Harbour Engineering Corp (CHEC) on the financing and building of a A$1.85bn rail and port project for Fortescue in north-west Australia.
ASIC said the nature of the agreements was overstated as they were actually framework agreements and were not legally binding.
"Despite their knowledge of the terms of the three framework agreements and the many opportunities to release the true position, Fortescue and Forrest maintained and fostered the cloud of illusion that its position with respect to the three Chinese companies was better than it was," Neil Young, a lawyer for ASIC, told the court in opening submissions.
Forrest, who did not appear on the first day of the Federal Court hearing in the western Australian city of Perth, could also be barred from being a company director if ASIC wins its case.
Fortescue, represented by law firm Clayton Utz, said the agreements signed with the three state-owned Chinese firms were subject to various conditions, including the feasibility of the project being met, according to court papers.
Fortescue said on Friday it would defend itself.
"We are very conscious that what's been presented has not been supported by the facts and we will defend it vigorously," executive director Graeme Rowley told reporters on Friday.
Shares in Fortescue fell 2% to A$2.45 on Monday in a broader market up 0.6%.
By Fayen Wong, Reuters
The Australian Securities and Investments Commission laid the charges last week, seeking fines of up to A$6m ($4.3m) from Fortescue and A$4.4m from its chief executive and billionaire founder, Andrew Forrest.
At the heart of the five-week trial is a series of statements Fortescue made in 2004 about agreements with China Railway Engineering Corp (CREC), China Metallurgical Engineering Construction Group Corp (CMCC) and China Harbour Engineering Corp (CHEC) on the financing and building of a A$1.85bn rail and port project for Fortescue in north-west Australia.
ASIC said the nature of the agreements was overstated as they were actually framework agreements and were not legally binding.
"Despite their knowledge of the terms of the three framework agreements and the many opportunities to release the true position, Fortescue and Forrest maintained and fostered the cloud of illusion that its position with respect to the three Chinese companies was better than it was," Neil Young, a lawyer for ASIC, told the court in opening submissions.
Forrest, who did not appear on the first day of the Federal Court hearing in the western Australian city of Perth, could also be barred from being a company director if ASIC wins its case.
Fortescue, represented by law firm Clayton Utz, said the agreements signed with the three state-owned Chinese firms were subject to various conditions, including the feasibility of the project being met, according to court papers.
Fortescue said on Friday it would defend itself.
"We are very conscious that what's been presented has not been supported by the facts and we will defend it vigorously," executive director Graeme Rowley told reporters on Friday.
Shares in Fortescue fell 2% to A$2.45 on Monday in a broader market up 0.6%.
By Fayen Wong, Reuters
Gold price continues lower
Spot gold prices continue lower this morning. Last Thursday’s weakness and close beneath a six-month trendline ($908) precipitated additional selling pressure that has continued into this morning’s reaction low at 873.00 – so far. Let’s notice that the 200-day moving average now is slightly rising at $860.75, with the daily RSI pointed down and making new lows for this move. The juxtaposition of the declining RSI with the falling price structure argues for still-lower prices that likely will test the 200 DMA in the upcoming hours. Let’s also notice that $845 represents the 50% support area of the entire upmove from the October low ($680.75) to the February high ($1007.20), as well as the lower channel line off of the February high. Both also could be “technical magnets” for a forthcoming significant low in spot gold prices and the corresponding
Wednesday, April 1, 2009
Grand Dir Jirga voices concern over lawlessness
The Jirga was attended by the elders and notables of the Sultankhel and Paindakhel besides the district administration and high officials of the police. Addressing the jirga elders that included Malik Faiz Muhammad Khan, Malik Behram Khan, Malik Jehanzeb Khan, Akhunzada Inayat Said, Dir Upper District Nazim Tariqullah, Fazal Wahab, Rasool Khan, Bakht Baidar Khan and Sultanyar expressed concern and anger over the killing of the innocent persons in the recent days. They said protecting the citizens was the basic responsibility of the state, however, despite spending 90 percent of the nation hard-earned money on country抯 defence, the security forces were unable to save the people from the terrorists, kidnappers and saboteurs.The speakers said in the recent days dozens of innocent persons were kidnapped who included Sardar Abdul Hakeem and his son Sardar Muhammad Arif but the government did nothing for their recovery for the last three months. They said another senior lawyer Abdul Jameel advocate was abducted in the broad daylight and was killed while his killers were yet to be bought to justice.The speakers said despite the presence of a large number of security forces personnel in the area, there was no action to establish the writ of the state in the area. They said that now things had come to a stage where even the district police chief was not protected and killed by the so-called kidnappers.The speakers added that when such was the ground reality in the area then all the elected members should resign and the administration should be sent home. They said the people would themselves strive for their protection as their government had failed to come up to the expectations.
Share this
Share this
Subscribe to:
Posts (Atom)