The resources industry was yet again the driving force behind Western Australia’s tearaway economy, but one commodity in particular stole the show.
The resources industry was yet again the driving force behind Western Australia’s tearaway economy, but one commodity in particular stole the show.
Iron ore, and more importantly China’s demand for it, has placed increasing attention on Perth’s backyard – whether it has been global heavyweights sniffing opportunities, or analysts scratching their heads trying to work out just how Andrew Forrest had managed to get his $2.7 billion iron ore project almost completed… and how they’d missed one of the best investments of the year.
Shares in Fortescue Metals Group have soared close to 400 per cent this year and its biggest beneficiary has been its chief executive, Andrew Forrest, whose stake in the group moved beyond $6 billion.
As Fortescue works away at moving from developer to Australia’s third biggest iron ore producer by next year its enormous neighbours, Rio Tinto and BHP Billiton, have been engaged in a stand off.
BHP prepared a $400 billion three-for-one share offer for Rio last month, but Rio remains unconvinced that the offer is reasonable.
To prove its case, Rio went on the offensive, touting a massive $2.7 billion expansion of its Pilbara iron ore mining operations.
Rio chief executive Tom Albanese also gave further support to those who think the resources boom will be “stronger for longer”, saying the rise in global mineral demand will continue for decades, and, of course, that the value of Rio was yet to be fully reflected by the market.
Meanwhile, there was a sensational twist in Rio’s David and Goliath battle over a tenement called Shovelanna, with Nathan McMahon’s minnow Cazaly Resources.
A parliamentary committee recommended criminal charges be laid against Mr McMahon for allegedly lying to an inquiry investigating attempts by lobbyist, Brian Burke, to get the government to launch an inquiry into iron ore, which would ultimately help Cazaly’s fight with Rio.
There were plenty of twists and turns in the battle for Consolidated Minerals.
Ukrainian group Palmary Enterprises finally secured more than 50 per cent of the manganese and nickel miner after eventually upping its offer to $5 a share to foil Pallinghurst Resources, which originally proposed $2.28 a share back for ConsMin in February.
The Ukrainians were not the only ones shopping. The Russians, the Chinese, the Japanese and the Indians were also doing deals.
Japan’s Mitsubishi signed off on a deal to acquire 50 per cent of Murchison Metal’s iron ore business, including Murchison’s flagship Jack Hills project. Murchison, in turn, has made a bid for neighbour Midwest Corporation.
That bid triggered Midwest’s partner, China’s Sinosteel Corporation, to make its own bid for the iron ore explorer.
Meanwhile, India’s Reliance Industries, which owns the world’s third-biggest refinery, won a licence in the Bonaparte Basin and proposed to spend about $30 million over six years developing oil and gas in the north west.
Not to be outdone, Russia’s Norilsk Nickel increased its presence in WA by acquiring US-based OM Group, which had a 20 per cent stake in the Black Swan and Silver Swan nickel mines north east of Kalgoorlie. Norilsk, which bought nickel giant LionOre this year, also secured a 20 per cent interest in the Honeymoon Well nickel deposit near BHP Billiton’s Mt Keith operation through the OM deal.
