Author: yinghui

Terex Corp. has received an unsolicited, non-binding acquisition proposal from China’s Zoomlion Heavy Industry Science and Technology Co. to acquire all of the outstanding shares of Terex for $30.00 in cash. The proposal is conditioned on, among other things, receipt of U.S. and Chinese regulatory approval and Zoomlion shareholder approval.

Terex announced last August that it had entered into a Business Combination Agreement with Finland-based Konecranes Plc providing for a combination of Terex and Konecranes. The Terex board of directors has not changed its recommendation of the proposed combination with Konecranes.

Terex acknowledged it has entered into a confidentiality agreement with Zoomlion and is in discussions with Zoomlion regarding the proposal. Consistent with its fiduciary duties, the Terex board of directors, in consultation with its legal and financial advisors, is carefully reviewing the Zoomlion proposal to determine the course of action that it believes is in the best interests of Terex shareholders. Terex will have no further comment until the board has completed its review.

Credit Suisse Securities (USA) LLC and Moelis & Company are serving as financial advisors to Terex and Fried Frank Harris Shriver & Jacobson LLP, Bryan Cave LLP and Avance Attorneys Ltd are acting as legal counsel to Terex.

Zoomlion is believed to be China’s second largest construction equipment manufacturer, valued at about $4.4 billion.

Terex stock, which closed Friday at $15.49, has jumped 37.1 percent to $21.24 as of 2 p.m. EST Jan. 26.

The third Australian manganese operator in two months has closed operations as the commodity price falls.

Shaw River, owner of the Otjozondu manganese project in Namibia, has entered voluntary administration “as a consequence of low manganese ore prices”, which halved in 2015.

It follows fellow Australian companies OM Holdings – which closed its Bootu Creek mine in December – and Consolidated Minerals – which shut down its Woodie Woodie mine last week – in shuttering its operations.

Shaw River is placing “itself in a trading halt and then in voluntary suspension while the company pursued a restructuring of debt as a precondition of a fund raising to be initiated in the New Year,” it said in a company statement.

It explained that while it still has a credit line with its major shareholder available, “beyond an initial loan amount all additional drawdowns were at the discretion of the lender….late in the year, the lender informed the directors that its capacity to advance further funds was limited.”

Shaw River carried out an SPP last month to reduce debt obligations, however it failed to raise enough from its shareholders.

“Unfortunately the company has not received any assurance from a third part that is it possible to raise funds in the short term for a company such as Shaw River that operates in the resources sector or more particularly in the manganese sector, particularly while the stock markets are volatile.”

Shaw stated it has already ‘aggressively’ pared back operating costs “t o levels not previously thought possible”, however the fact that manganese ore has fallen to levels not seen since 2003 negated its efforts.

“These low ore prices are having consequences,” the miner said.

“Within the manganese ore market, production of internationally traded ore has been severely pruned with full and partial closures of mines in many countries including notably South Africa and Australia, and the closures announced continue at least through January.”

However despite the wide scale slaughter manganese operators are facing , Shaw River managing director Peter Cunningham does see a future for the commodity.

“These cutbacks are resulting in shortages of some grades of manganese ore,” he said.

“Spot prices in China are showing early signs of recovery.

“However, demand in China has been constrained in advance of Chinese New Year, and so stocks of ore in China ports have yet to decline significantly. Demand is expected to improve after Chinese New Year, and this improvement should provide opportunity for restructuring of Shaw River and its subsidiaries.”

Approximately 380 workers jobs have been cut as Consolidated Minerals place the Woodie Woodie mine in care and maintenance.

Workers were informed of the decision late last week, which will affect the 330 FTE and 50 contractors on site, according to the ABC.

The miner blamed falling manganese prices as the driver behind the operation’s closure.

“Despite the relentless efforts and substantial achievements of our leadership group, our employees and our suppliers to transform Woodie Woodie into a globally competitive operation which we can all be proud of, the price for manganese ore is now so low that continuing to operate is no longer an option,” Consolidated Minerals managing director Paul Muller said.

Woodie Woodie is the second Australian manganese mine to close in as many months, after OM Holdings placed its Bootu Creek manganese mine – in the Northern Territory – into care and maintenance in December.

That same month South32 announced its plans to lay off more than 400 workers from its manganese operations in South Africa.

Consmin will keep approximately 30 workers on staff, 15 onsite and 15 at its head office in Perth, to restart operations once the commodity picks up again.

BGC Contracting has won a five year contract extension with Cliffs Natural Resources.

The $520 million contract will see BGC Contracting extend their operations at the Koolyanobbing iron ore project past the original end date of 2017 to 2022.

It has been on site since 2004, initially providing off-road haulage, which was expanded to include mining operations in 2007.

Under the contract BGC will continue to provide mining services, in including drilling, blasting, loading, haulage, dumping, crushing, screening, and train load-outs.

Greg Heylen, BGC Contracting’s CEO, explained the extension came on the back of the contractor’s “ability to meet Cliffs’ safety and production targets during a challenging period for iron ore producers”.

“This has been a tough period as the iron ore price has fallen, and I believe that by maintaining strong relationships with Cliffs at all levels of our organisation, we have helped them succeed at Koolyanobbing in what has been a difficult market for all iron ore miners,” Heylen said.

The project is located in WA’s Yilgarn region, 400 kilometres north east of Perth.

China has announced it will shut more than 1000 mines across four provinces in the country’s north and south.

The country currently has approximately 9620 legal coal mines.

It comes after the nation announced it will not approve any new coal mines over the next three years.

The move is part of a bid to dramaticallyreduce existing coal stockpiles.

The latest coal mines to be shut are in the Yunnan, Jiangxi and Guizhou provinces in the south, and the Heilongjian province in the north, according to China Daily.

China’s deputy director for the State Administration of Work Safety, Huang Yuzhi, explained it will reach its production and stockpile target by slashing the number of smaller operating mines.

“More than 1300 coal mines were closed last year, and small coal mines with a scale of annual production of less than 300,000 tons that had major accidents will be gradually closed this year, as well as those mines that are operating illegally,” Huang said.

A new IBISWorld report has highlighted petroleum refining, contract mining, and diamond mining as the country’s fastest declining industries in 2016.

Petroleum refining is slated to shrink 16.7 per cent this year, with industry revenue to decline at compound annual rate of 7.7 per cent over the five years through 2015-16 to sit at $19.1 billion.

In little surprise, as the mining industry declines contractor and support services are predicted to decline in line with the sector and as operators look to in-house production rather than outsourcing services.

The industry is highly dependent on trends in mining activity, particularly black coal and iron ore mining activity, as these are Australia’s largest resources in terms of both volume and value,” according to IBISWorld senior industry analyst Spencer Little.

“As commodity prices have fallen, many mining firms have ceased expansion and exploration projects, and instead shifted their focus to production.

“This has been to the detriment of contract miners in the industry, as many services that were previously contracted out have been brought back in house,” Little said.

IBISWorld forecasts a 6.3 per cent decline in contract mining, engineering, and services companies revenue down to $11.2 billion.

This follows the sharp 14 per cent decline in revenues recorded last year.

Diamond mining is also slated to fall, after a short rally in 2014, when it saw a 24 per cent growth in revenues.

Instead the industry is predicted to experience an annual compound decline of 4 per cent over the five years through 2015-26, to fall to $380.1 million.

“The industry’s performance has been volatile over the past five years, due to fluctuating production volumes and prices; a significant drop in revenue in 2013-14, and another expected fall in revenue in 2015-16 are expected to underpin the industry’s poor performance over the period, “ IBISWorld stated.

This fall, while in line with the general decline in mining, has been precipitated by Australia oversupplying the market.

“As a result, the industry is heavily export-oriented and industry players depend on global demand for diamonds. According to the Department of Industry, Innovation and Science, in 2013-14 export volumes of Australian diamonds dropped from 12.2 million carats to 10.4 million carats,” IBISWorld added.

“Industry operators also face strong competition from imports, which account for a large proportion of total domestic demand,” Little said.

The exit of Kimberley Diamonds, previously a major industry player, is expected to negatively affect the industry’s performance in 2015-16.

In July 2015, Kimberley Diamonds announced that it had ceased its local diamond mining operations at its Ellendale site and entered into voluntary administration.

This exit is expected to cause a major dip in diamond production volumes and contribute to a 13.3% decline in industry revenue in 2015-16.

There has also been additional shakeup in the diamond industry, with the announcement today Rio Tinto’s head of diamonds and minerals, Jean-Marc Lieberherr, has stepped down, to be replaced by the current head of salt and uranium, Simon Trott.