News Wrap

IN THIS morning’s News Wrap: Sell for less, BlackRock tells BHP, Rio; Citic sets out case against Clive Palmer; and Mongolia eases restrictions on miners.

Lou Caruana

Sell for less, BlackRock tells BHP, Rio

The world’s largest mining investor has urged BHP Billiton and Rio Tinto to accept lower prices for billions of dollars of assets up for sale, arguing the big miners do not need to sell at full value to improve shareholder returns, according to the Australian Financial Review.

BlackRock natural resources chief investment officer Evy Hambro welcomed the divestment of non-core assets flagged by BHP and Rio over the past 12 months but encouraged management at global miners to be pragmatic.

“You might end up selling something that is worth $1 for 90¢ but if your shares are trading at only 70¢ on the dollar, then you can use proceeds you are getting at 90¢ on the dollar to buy back your own shares,” he said. “That’s much more value creative.”

Citic sets out case against Clive Palmer

Citic Pacific will rely on the wording of its state agreement as it looks to stave off the latest legal challenge by its estranged partner Clive Palmer, according to The Australian.

The latest legal clash between Citic and Palmer centres on third-party access to the port at Cape Preston, which Citic effectively leases from Palmer's private company Mineralogy.

Mongolia eases restrictions on miners

Mongolia, for years held up as a potential competitor with Australia to attract global investment for highly promising mining prospects, has faltered following the introduction a year ago of stringent regulations requiring parliament to approve foreign involvement in the industry, according to The Australian.

However, the country's parliament, the State Great Hural, has amended that tough legislation to ease restrictions on private investors while raising the bar on state-owned enterprise capital.