BHP and Rio Tinto mining futures hinge 2106 cash-flow budgets - iMINCO Mining Training Information

BHP and Rio Tinto mining futures hinge 2106 cash-flow budgets

Rio Tinto is set to hold its ground as mining activity is challenged in 2016

Between Rio Tinto and BHP, the giant of global mining, it looks like Rio is going to win the war of fortunes and stability over archrival BHP Billiton.

Before the current global resources challenge, BHP were seen as ‘big mouthing’ its position as the global leader in the oil and gas business, which was BHP’s second-biggest earner behind iron ore until 2014.

However, a recent run of failed investments in US shale oil and the collapsing oil and gas prices have turned the once booming petroleum markets into a liability.

BHP Rio Tinto mining battle is on in 2016

Rio Tinto, who were once seen as heavily reliant on iron ore, is now looking to become highly favoured by investors, which in turn has positive results for those who are employed in the sector.

Recently, Rio Tinto said its iron ore production surged 10 per cent in a strategy that has seen them forge ahead with an often criticised strategy of boosting iron ore shipments into an already oversupplied market to increase its market share.

Rio’s iron ore production rose to 87.2 million tonnes. That compares with 79.1 million tonnes in the year-earlier period.

Chief executive Sam Walsh said Rio will continue to focus on managing its costs and capital to maximise cash-flow generation for the whole of 2016. Iron ore output for Rio increased 11 percent to 327.6 million tonnes from 295.4 million tonnes in 2014, with forecasts for some of 350 million tonnes in 2016.

BHP struggling to maintain positive results for investors

Whilst BHP and Rio have suffered from plunging iron ore, copper and coal prices, BHP has had to deal with a severe 75 per cent drop in oil prices since June 2014 – which is a 12-year low.

BHP’s shares have under-performed Rio Tinto’s over the past 12 months, hurt by low oil prices plus the fallout from the dam collapse disaster in Brazil in November at a mine it half-owns. BHP’s Australian stock has dropped 38 per cent over the past year, against a 27 per cent fall for Rio.

It’s no secret the mining sector has fallen back to levels that have been dictated to by a decline in economic development, especially that of China – which Australian miners relied upon to help maintain high levels of profitability.

As with any industry, we see common patterns and cycles emerging and in the grand scheme of things, it is a natural progression because prices can not go skyward forever -there is always a yield point at which a correction has to occur.

The Australian Mining Jobs Market

In terms of the jobs market, there are still many opportunities out there for mining employment – especially for those who have mining experience and the skills that are in demand. For instance, take a look at the large numbers of jobs in mining that exist on SEEK.com.au or at Indeed.com.

Mining companies and contractors are still running mines and there is a need to keep personnel employed in those mines.

Check out the numbers of mining jobs on SEEK and Indeed. SEEK has 280 jobs plus for mining operators right across Australia. This includes jobs for dump truck operators as well as jobs for Process Plant Operators – plus many, many more.

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