# RIO - Rio Tinto



## TraderPro (11 June 2006)

Doesn't look like there's a thread on Rio Tinto, So i'll start one.

I've posted my analysis for Rio Tinto Here. Citigroup and UBS has recently bumped up their share price target to $100 for RIO.


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## Mr_Liquidity (23 August 2006)

*RIO TINTO*

Rio is really starting to band out any other people in here trade RIO?


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## ducati916 (23 August 2006)

Current Price $199.11
Code RTP
Yield 1.6%
Market Capitalization $70493.4
TCI Price Target $91.00 to $122.95
Investment Sector Basic Materials
Price Earnings Ratio 13.1
Recommendation Watch List

Price Chart here

INDUSTRY STATISTICS

Description  
1 Day Price
Change %
Market
Cap
P/E
ROE %
Div. Yield %
Long-Term Debt to
Equity
Price to
Book Value
Net
Profit Margin % 	Price to
Free Cash Flow 	More
Info
Sector: Basic Materials	0.78	4268.0B	15.09	23.90	2.32	0.46	3.79	11.11	-102.47	N/A
Industries	
Agricultural Chemicals
-1.68	54.3B	34.10	9.70	2.62	0.49	4.50	3.70	-27.90	More Info

Aluminum
2.32	55.1B	21.10	10.40	2.03	0.94	3.93	4.40	-109.80	More Info

Chemicals - Major Diversified
0.44	154.9B	12.20	27.30	2.82	0.95	5.15	8.80	-64.30	More Info

Copper
-0.67	38.5B	10.30	42.00	5.65	0.34	4.29	22.10	-62.40	More Info

Gold
0.14	198.8B	32.00	11.00	0.98	0.27	4.18	12.00	428.30	More Info

Independent Oil & Gas
1.08	546.5B	11.20	26.50	1.58	0.41	3.12	17.20	-118.30	More Info

Industrial Metals & Minerals
0.84	367.3B	15.60	32.60	1.45	0.51	5.26	16.70	-87.00	More Info

Major Integrated Oil & Gas
0.81	1368.5B	11.60	25.40	3.13	0.28	3.30	8.80	100.50	More Info

Nonmetallic Mineral Mining
0.69	12.3B	24.60	23.90	1.28	0.81	4.68	14.20	-67.70	More Info

Oil & Gas Drilling & Exploration
0.68	252.9B	17.40	17.20	1.48	0.38	3.15	15.90	23.80	More Info

Oil & Gas Equipment & Services
1.17	246.6B	22.10	22.20	0.97	0.57	7.12	12.10	-2370.50	More Info

Oil & Gas Pipelines
0.63	130.8B	24.20	15.00	3.13	1.36	3.42	4.90	-98.10	More Info

Oil & Gas Refining & Marketing
0.66	480.0B	11.20	24.10	2.68	0.30	2.99	7.60	246.10	More Info

Silver
0.37	6.7B	0.00	0.00	0.00	0.51	5.01	-15.10	-25.20	More Info

Specialty Chemicals
0.60	51.0B	31.60	8.30	2.34	1.64	4.19	3.00	-97.80	More Info

Steel & Iron
1.34	209.4B	10.50	31.00	1.85	0.51	3.15	13.90	-403.20	More Info

Synthetics
0.33	94.4B	26.70	11.50	2.95	1.08	3.79	3.80	213.40	More Info




Rio Tinto has business interests to a greater or lesser degree within the sectors listed above.  All have a link to resources, which are currently from a price perspective in a strong bull market. As resources, or commodities are highly cyclical within their prices, buying resource producers at cyclical high commodity prices, can be fraught with peril.

From Rio’s own analysis, the following price history is illuminating;

Alumina
Low price $250
Current price $420

Aluminum
Low price $55
Current price $90

Coking Coal 
Low Price $45
Current price $130

Thermal Coal
Low price $35
Current price $55

Copper
Low price $75
Current price $160


Diamonds
Low price $150
Current price $200

Gold
Low price $350
Current price $550

Iron Ore
Low price $35
Current price $80

Iron Pellets
Low price $45
Current price $120

Molybdenum
Low price $5
Current $30

Silver
Low price $5
Current $7

The *low prices* are actually quite close to the average price. Based on the current prices, it would seem prudent to allow some leeway for prices closer to average prices, which tend toward the low end of the scale. Commodity prices have always been cyclical. The argument currently being put forward for *permanently high prices* is the durability and strength of economic growth in China & India.


CAPITALIZATION

Market Cap (intraday):	67.41B
Enterprise Value (28-Jun-06)	70.25B
Trailing P/E 	13.06
Forward P/E 	9.27
PEG Ratio 	0.78
Price/Sales 	3.62
Price/Book	4.61


The Capitalization structure is predominantly common stock. The Bond and Bank debt are currently negligible.  


INCOME STATEMENT

Profitability 
Profit Margin 	27.40%
Operating Margin 	34.05%


Management Effectiveness
Return on Assets 	16.27%
Return on Equity 	38.88%



On the basis of this exhibit, the evidence would suggest an extremely attractive stock to own. 
Unfortunately, it is a little misleading.

The ratio that highlights the problem is the *Return on Assets* Rio is only generating $0.81 of revenue per $1.00 of assets. This is indicative of a low return and capital intensive business.

The extremely attractive profit margins are attained in two rather important ways;
*The first are that profits generated are via, production + price received.
Production has been relatively static. Revenues have grown at 18.5% compounded.
Net Profits have grown by 37.0% compounded. Where is the disconnect?

Cost of Goods reveals the anomaly.  This cost had to be backed out as the figures were not available.  In essence Cost of Goods has remained within the compounded average growth of 14% and due to GAAP accounting, utilizing FIFO the rising prices available have had an impact on earnings via the large inventories that are kept on the Balance Sheet.



The ratio of Inventories to Revenues highlights the aggregate high Inventory levels [1.49]
Combined with Cost of Goods to Revenues [0.51] on aggregate, to the current ratio [0.38] Cost of goods has fallen, in part to the Inventory levels on hand, and thus through FIFO reporting has swelled the earnings dramatically.

Are these earnings sustainable?
We are really back to where we came in. Are the current high prices for commodities sustainable? Will China & India continue their extreme growth rates? Can Rio put off a rising cost of production, if so, for how long?


BALANCE SHEET

There has been no Balance Sheet provided, therefore, many of the figures have been provided from past Balance Sheets, and some figures backed out.
Rio Tinto has a weak cash position. Much of the Working Capital has been tied up within high Inventory levels. This has currently worked out very well, but, in times of weaker pricing, the effect can be the opposite.

The solution has been in the past to take short-term Bank borrowing. This is not really a major problem in regards to ultimate survival, but it impacts the cash-flows, reducing earnings per share via increased interest payments.

Capital Expenditures reveal a very high level of “property trading”. The huge number of transactions revolving around acquisitions and disbursements raise questions, but provide no answers.

Dividend policy has been somewhat stingy, with a 21% payout ratio. This is a very high Capital intensive business, therefore, with a low dividend payout ratio, have management utilized retained earnings in a productive manner for the owners?

On first blush, you would have to say yes, current figures suggest a 21% return on retained earnings.
This has been accomplished on twenty-five year high commodity prices. What has been the average return?
It has been 7.5%. This is low. It is also consistent with the low return on assets.

SUMMARY

Is this a solid business………………….yes it is.
Is this business likely to go bankrupt……………..no, it is not.
Is it fairly valued at current prices……………..no it is overvalued.

The intrinsic value is calculated at a range of $91.00 to $122.95
At a current price of $199.11 it is some 61% overvalued. If it could be purchased within the low $70 range, it would provide an excellent investment opportunity.


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## ducati916 (23 August 2006)

The above prices and valuations are based on US$ ADR values.
Sorry about the first table, didn't post well.

jog on
d998


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## doctorj (24 August 2006)

Ducati, thanks for taking the time to post your analysis.  It is incredibly thorough  and a very entertaining, informative read.  I look forward to reading more of it.

Thanks!


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## ducati916 (24 August 2006)

No problem Doc.
Glad you enjoyed it.

jog on
d998


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## Realist (24 August 2006)

ducati916 said:
			
		

> The intrinsic value is calculated at a range of $91.00 to $122.95
> At a current price of $199.11 it is some 61% overvalued. If it could be purchased within the low $70 range, it would provide an excellent investment opportunity.





Oh God, not again!!   

You are saying RIO is valued at nearly 3 times what it should be.     


What companies do you reckon people should buy? please publish at least one name, it must be the bloody bargain of the century if you see it is fairly valued.


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## Sean K (24 August 2006)

he he, I wonder what RIOs p/e would be at the lower value range? 1.5? 

RAOTFLMFHO!


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## Realist (24 August 2006)

kennas said:
			
		

> he he, I wonder what RIOs p/e would be at the lower value range? 1.5?
> 
> RAOTFLMFHO!




If someone can please point me to a large world leading company that consistently makes profits, has a good outlook, no major problems and has a P/E ratio of 2 - I will sell my kidneys, my car, my mother, and my life savings and punt them all into that company.

I'll be richer than Buffett in a year or two.

Anyone know of one?


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## RichKid (19 September 2006)

RIO looks like it's about to take another plunge in this wave C in Elliott speak, most good EW people would be able to see this (which is not the same as saying it's a certainty), also a gap fill expected on the retest of the breakdown that many would be watching (ignoring the common gaps)....a fair way to go before it reaches Duc's buy targets, don't think it'll get there imo but $55-60 (ASX listed price) looks within reach, the targets are guidelines only. 

Any alternative chartists' opinions out there? H&S, symmetrical/descending triangle measures, breach of multiple trendlines, high volume selling etc can add to the bearish picture...


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## Sean K (19 September 2006)

RichKid said:
			
		

> RIO looks like it's about to take another plunge in this wave C in Elliott speak, most good EW people would be able to see this (which is not the same as saying it's a certainty), also a gap fill expected on the retest of the breakdown that many would be watching (ignoring the common gaps)....a fair way to go before it reaches Duc's buy targets, don't think it'll get there imo but $55-60 (ASX listed price) looks within reach, the targets are guidelines only.
> 
> Any alternative chartists' opinions out there? H&S, symmetrical/descending triangle measures, breach of multiple trendlines, high volume selling etc can add to the bearish picture...




$60 looks like next support level. Pretty crummy chart. Hard to pick anything really. Broken down out of decending triangle last week I suppose. 

Interesting that broker concensus (from 9 brokers) has this as a buy/outperform with an average $96 price target!


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## Ken (13 October 2006)

is rio going into another spree. 

Who thinks its heading to all time highs. 

Just when people thought it was dropping just kicks back


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## Ken (16 October 2006)

$75.50

will rio and bhp send the market to all highs again by xmas.

i think so.... i am guessing RIO to be well over $80 by xmas.


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## Realist (16 October 2006)

Ken said:
			
		

> $75.50
> 
> will rio and bhp send the market to all highs again by xmas.




By xmas?    

It could be by 10:08am tomorrow!!


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## BSD (16 October 2006)

Rio has a limited growth profile and is therefore at the mercy of commodities prices. Not really too bad a thing though...

Copper (51%) - way above analyst's conservative (but rising) expectations

Iron Ore (24%) - remaining tight and rollover of massive prices still expected

Aluminium - (9%) spot still above most analysts forecasts 

Coal - (9%) ditto

BHP is better but RIO is still a cracking buy - regardless of the hopelessly wrong wave count voodoo

RIO suffered from the unwinding of the RIOSIDE BHP-clone trade (RIO/WPL as a parcel) and remains very cheap 

I (and a lot of market players) wish RIO would FIRE UP and buy some more assets for growth. 

If they do not get bigger they will become a target. Trading at less than 10 times with no debt.

Someone needs to gear this thing up. 


Oh, and does it amaze anybody else that rubbish like CDU, PMH, CGT, MOX (Dog **** Mining etal) can get 100's of posts and RIO is still at sub 100?


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## wayneL (16 October 2006)

BSD said:
			
		

> R....regardless of the hopelessly wrong wave count voodoo....




BSD,

Give it a miss will you? That is a very acrimonious comment and is not necessary.

Thanks


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## BSD (16 October 2006)

Sorry if it is offensive - at least I didn't swear this time


But surely an alternative view is required sometimes and I am happy to live by my opinions. I certainly get paid from them.

Shorting RIO at $66 (three days before the bottom) due to using a narrow method I believe is voodoo lost lots of money.  Shorting RIO on a questionable fundamental analysis like Ducati's, in my view, is also not going to make money. 

*. My disagreement has nothing to do with fundamental versus technical*

Plenty of funny stuff goes unquestioned on the forum and I would like to provide an alternative view point. Plenty of people also get bagged on here for various ideas - particularly those requiring the opening of a quartely production report or buying a company that actually has earnings. 

Go to the CDU thread and check out some of the really well researched and backed-up rubbish I have been exposed too. I got called a commie FFS!

Nobody gets it right all the time and hindsight is 100% but an alternative view should always be accepted. My points of view during the time in question are as public as the next guy's. Sometimes I think that if you learnt all you know about stocks from this forum you wouldn't have a stock in your portfolio that actually made money.

If someone wants to say that buying BHP and RIO at 9 times earnings is foolish when they are cum-upgrades is voodoo or rubbish or dumb or silly I am happy to hear why. You and me have had some excellent discussions...

I am not so precious to be concerned by someone disagreeing with me. I think I learn more by being in discussions where not everyone is thinking the same. 

Is RIO still going to $50?

If not - why not and what has changed since Sept apart from the chart?


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## wayneL (16 October 2006)

BSD said:
			
		

> Sorry if it is offensive - at least I didn't swear this time
> 
> 
> But surely an alternative view is required sometimes and I am happy to live by my opinions. I certainly get paid from them.
> ...




BSD,

Your opinion is always researched, well thought out and should be valued for what it is. Your opinion should stand by that, and doesn't require the disparagement of other methods of analysis which you admitted to not understanding.

Let us consider two shops next door to each other. Lets use furniture because thats the industry I come from. 

One shop sells a 5 piece lounge suite with lamps and a coffee table thrown in for $599. Yet next door at the other shop, $599 wouldn't even buy half a chair. That shop sells a 3 piece lounge suite for $8,995.

Both shop owners drive home to the leafy suburbs in their merc 560 and kids go to private schools etc etc.

I need not continue on because how each makes money is quite obvious.

This lesson may seem overly elementary to someone who is obviously employed as some sort of analyst or something. But it seems to have been a lesson lost on you. Both approaches are valid and both make money, yet they are philosophically poles apart.

So it is with trading/investing. Different philosophies using the very same instrument. How about that, yet both make money.

We must assume then that disparaging remarks such as "voodoo", "questionable analysis" etc is nothing more than philosophical snobberey. It is totally unwarranted, and as I said, you analysis stands up without it.

You can be a great role model for others who feel they must use this sort of rubbish to reinforce substandard analysis. Those of us who know better, should set the tone.

Thanks


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## Realist (16 October 2006)

BSD said:
			
		

> Oh, and does it amaze anybody else that rubbish like CDU, PMH, CGT, MOX (Dog **** Mining etal) can get 100's of posts and RIO is still at sub 100?




Oi watch what you say about PMH!!    

RIO is worth $34B
PMH is worth $43M

Which one is more likely to triple in value first?


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## Ken (17 October 2006)

which one is more likely to halve first...


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## tugga (17 October 2006)

My broker seems to think rio will hit about $90-95.

I hope he is right.


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## Realist (17 October 2006)

Ken said:
			
		

> which one is more likely to halve first...




Don't be negative!


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## Ken (17 October 2006)

lol. 

i just got rio tinto last week.  so may the race begin to triple


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## Ken (19 October 2006)

RIO is up on the NYSE.  

will be interesting how it goes for the rest of the week on the asx.


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## Ken (20 October 2006)

$77.27 i think we are knocking on the door of $80 pretty damn hard....


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## pacer (20 October 2006)

Bought 500 yesterday and sold this arvo at 1.30 for 1k profit.....like the graph, but it was just a position overnight....realy wanted to keep over the weekend.......but set my rules at a 1 day profit for that one.....but can see a big week on the bulls coming.......

NEWS for me was the 10% hike on iron ore price expected, and the partnershp in more good dirt......a good day all round for the market.......and fridays are usualy pretty calm.....monday highs?.....don't care now...it's the weekend.....going fishing..........


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## Ken (20 October 2006)

Rio is getting 3 votes from me this week.

just so strong in contest.

bring back the biff!


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## TraderPro (28 October 2006)

pacer said:
			
		

> Bought 500 yesterday and sold this arvo at 1.30 for 1k profit.....




Hey Pacer...are you buying using cash/margin/cfd's/warrants?

just wondering... cheers...


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## dlineinvestor (24 January 2007)

*Re: RIO - Rio Tinto moving back to $ 76.00*

Finally copper prices have firmed and will rebound on rising industrial and housing demand in China and the U.S. The metal has tumbled far enough from an all-time high last May to have reached ``fair value,'' 
CVRD to pay out 1.65 billion in dividends in 2007
All base metals now clawing their way back up above the water line !
www.basemetals.com


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## scsl (27 January 2007)

> RIO - SB Citigroup rates the stock as Buy, Medium Risk
> BROKER NEWS - 25/01/2007
> 
> The broker notes there is upside to its valuation on the stock given current valuations being applied to uranium stocks.
> ...



pacer, are you still trading RIO CFDs on a short term basis? What do you think of a opening a CFD position on this for at least the next few months?


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## shinobi346 (27 January 2007)

From that article posted, what allows RIO to spin off its uranium deposits which BHP can't?


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## scsl (27 January 2007)

shinobi346 said:
			
		

> From that article posted, what allows RIO to spin off its uranium deposits which BHP can't?



I think that it's because BHP's Olympic Dam not only has uranium, but also huge deposits of copper (gold, and silver). Seeing as copper is one of BHP's core metals, it's very unlikely that management would ever think about spinning off Olympic Dam.


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## scsl (27 January 2007)

A couple of quick Google searches shows that RIO has _interests_ in two (producing) uranium mines: a 68% interest in Australia's ERA and a 69% in Namibia's Rossing. Both of these are solely uranium mines. 

So perhaps Citigroup thinks RIO could spin-off a 'holding company' with just these two stakes in the above, which are both significantly sized mines. With the outlook for uranium, there would no doubt be many bidders.


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## Garpal Gumnut (28 January 2007)

RIO seems to have been in a sideways move since early 2006, finding support at $65-70 and finding it difficult to break up through $80. It seems to have gapped up in the last  3 trading days on increasing volume, and indicators such as RSI and 5/15/30 day moving averages are promising. I have  a reasonable number in my SMSF and feel comfortable with its trading range.    Garpal


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## MiningGuru (1 February 2007)

I think there is a good chance that the profit figures will surprise on the upside tonight.

We have seen a rise, and I think that will continue through the day. We will have a strong close. Above $28 IMO


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## BREND (1 February 2007)

Yes, result is good.

Rio Tinto Group, the world's third- largest mining company, posted a 20 percent gain in second-half profit after prices for copper and iron ore surged on demand from China. 

Net income rose to $3.64 billion in the six months to Dec. 31, from $3.03 billion a year earlier, the company said in a statement. Second-half profit, which was calculated from full- year figures reported today by the London-based company, compares with the $3.72 billion median estimate of six analysts surveyed by Bloomberg. Rio raised its final dividend 54 percent. 

A five-year commodity rally, fueled by China's economic boom, has spurred profit at Rio Tinto, enabling Chief Executive Officer Leigh Clifford to buy back shares. He's also investing billions to expand iron-ore production and develop the company's uranium assets to maintain growth as prices for copper and other metals decline. 

``The big challenge for Rio will be to maintain earnings growth when commodity prices are coming down and cost pressures remain,'' Nick Hatch, an analyst at Investec Securities in London, said today by telephone. He has a ``hold'' rating on the stock. 

Shares of Rio Tinto fell 21 pence, or 0.8 percent, to 2,694 pence as of 9:23 a.m. in London, giving the company a market value of 41.6 billion pounds ($81.6 billion). The stock closed 2.2 percent higher A$78.29 in Sydney, before Rio published its earnings. 

``We expect prices to remain well above their long-term trend over the course of this year,'' Chairman Paul Skinner said today in a conference call in London.


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## Realist (2 February 2007)

BREND said:
			
		

> Yes, result is good.




I don't think it is that good at all..   

Profit is less than what analysts expected, just.

The dividend rise is great.

The outlook good. But who knows really?

Overall a very average result I think.


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## BREND (12 February 2007)

There is a rumour spreading in the metal market that copper price will rebound after Chinese New Year. Just for your info only.  

Any idea why Rio keeps dropping?


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## Kauri (29 March 2007)

*Rare spider threatens to stop $12b iron mine *


_29th March 2007, 9:00 WST_





> The Pilbara mining town of Pannawonica is in danger of becoming a ghost town within three years after the Environmental Protection Authority rejected plans by mining giant Rio Tinto to extend the local iron ore mine because of a rare underground spider found in the area.
> 
> 
> From next year, Rio’s Robe River division planned to mine about 200 million tonnes of iron ore worth more than $12.5 billion over 10 years from its Mesa A and Warramboo deposits, 43km west of the historic town, which is home to about 700 people.
> ...


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## reece55 (13 April 2007)

Anyone still riding this one????

Rio has leaped through that $80.00 on high volume (however that doesn't really mean much at the moment with every other stock on the ASX universe surging!).

Today, it opened at about $83.00 and the rest of the day it was heavily traded upward, although was sold off towards the end of the session. Next stop for this one is the $90.00 area. IMO, with metal prices the way they are and the flow of money coming in before June 30, this cash cow should continue on its merry way. Brokers target prices are all the way up to $100 - not sure we will get there, but bullish outlook IMO never the less.

Cheers
Reece


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## CanOz (13 April 2007)

reece55 said:


> Anyone still riding this one????
> 
> Rio has leaped through that $80.00 on high volume (however that doesn't really mean much at the moment with every other stock on the ASX universe surging!).
> 
> ...




Took profits yesterday, ahead of my planned exit, but i exited everything in stocks yesterday. 

Copper looking toppy....but what do i know...lol!

Cheers,


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## nizar (13 April 2007)

CanOz said:


> Took profits yesterday, *ahead of my planned exit,* but i exited everything in stocks yesterday.




Second guessing the plan?
It could cost you next time...


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## CanOz (13 April 2007)

nizar said:


> Second guessing the plan?
> It could cost you next time...




Just a combination of things, copper price included. You know, i see why Wayne likes futures, aside from my worst experience they're much more stable in a trend.

Coffee doesn't care what Wall St. is doing.

Cheers,


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## CanOz (16 April 2007)

Got back into Rio today, good solid trend in copper now...see if i can hold a bit longer this time.

Cheers,


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## MiningGuru (4 May 2007)

What is happenning to RIO today?

It is surging ahead. Up $3.50 to over $86.50 today. A surge of over 4%!!


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## vishalt (4 May 2007)

high of $87.69... its within a whisker of its all-time high.. 

there's no news sensitive enough for a surge either, what a joke -_-


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## 56gsa (4 May 2007)

BHP takeover ?   ... well maybe not - ACCC may have some concerns...

may have been discussed elsewhere but given the value companies are creating from spinning of next to nothing U tenements makes you wonder whether private equity is eyeing BHP, RIO ?  there was an article a while back suggesting these conglomerates were not generating the returns they could if they were split into spearate companies based around the commodity types..

is this a possibility or totally unrealistic given share structure/holders, finance required etc?


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## Sean K (4 May 2007)

*BHP, Rio vulnerable to private equity *
Citigroup release private equity risk rankings 

By Charlie Corbett
Wed 02 May 2007 

Resources giants BHP Billiton and Rio Tinto have topped a list of Australian companies most vulnerable to private equity takeovers. 

The rankings were released this week by Citigroup Research, which also included energy firm Santos, explosives maker Orica, leisure group Tabcorp, miner Zinifex, retailer Coles Group and Woodside Petroleum in its top 10 most vulnerable.

http://www.investordaily.com/1802.htm


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## Punter (4 May 2007)

Private equity don't touch mining...in fact they have no expertise in running mining operations...not a single private equity firm has taken over a mining company, its always mining/mining company mergers.


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## Kauri (4 May 2007)

Punter said:


> Private equity don't touch mining...in fact they have no expertise in running mining operations...not a single private equity firm has taken over a mining company, its always mining/mining company mergers.




Unless of course you look at Glencore International and its tie up with Xtrata, Minara, et al..... and also there is Gilbertson trying for Consmin..


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## 56gsa (4 May 2007)

thanks kennas - you've got the world at your fingertips... so do you think this could explain the rises in BHP RIO in last two days - or am i giving investor daily too much credit - anyway i don't think this is a new idea?

what do you think are the chances of such a bid?


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## Sean K (5 May 2007)

56gsa said:


> thanks kennas - you've got the world at your fingertips... so do you think this could explain the rises in BHP RIO in last two days - or am i giving investor daily too much credit - anyway i don't think this is a new idea?
> 
> what do you think are the chances of such a bid?



I doubt the two biggest miners would go. Maybe too much debt associated with transaction, and complications in then breaking them up. Would be mighty audatious of private equity. For BHP, maybe one of the big oilers with private equity assist. The oiler could take the oil and gas assets and private equity spin off the other divisions, or sell them to other parties. Maybe. The next tier players would be easier of course. WPL, NCM, STO, OXR. 

The speculation could have been the rise. I heard that there was a lot of overseas buying on Friday. (Thanks Sam)


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## MiningGuru (7 May 2007)

Has surged up over $4 today! Amazing!

Is private equity stalking RIO in order to breakup and make a fortune from this undervalued company?

With Iron ore mining to massively increase and the share on a PE of around 10 this company is way undervalued!


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## MiningGuru (7 May 2007)

Maybe BHP is about to launch a takeover bid?

Something is sure happening now over $91 a share

1309 [Dow Jones] BHP (BHP.AU) would be most likely bidder for Rio (RIO.AU) in takeover scenarios analysed by Citigroup. "Rio Tinto's strong cash flow and nominal gearing may bring it into the crosshairs of private equity, but we think BHP Billiton is a much more likely bidder given synergies and nationalistic control issue of Australian assets," says broker. Says deal is highly earnings accretive using conservative assumptions, with main consideration being concentration of iron ore/coking coal market shares and lack of BHP CEO elect. Adds acquirer could unlock 40% discount that RIO trades at A$117/share sum-of-parts valuation. Says 30% premium seems to be benchmark market expectation for takeover. Keeps BHP at Hold with A$33/share price target. Keeps RIO at Buy with A$94 target. BHP up 2.4% at A$31.33, RIO up 2.8% at A$89.25. (DWR)


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## BREND (7 May 2007)

A report from Citigroup late last week rated the top ten Aussie companies most vulnerable to a takeover from private equity or a competitor. "Resources giants BHP Billiton and Rio Tinto have topped a list of Australian companies most vulnerable to private equity takeovers. The rankings were released this week by Citigroup Research, which also included energy firm Santos, explosives maker Orica, leisure group Tabcorp, miner Zinifex, retailer Coles Group and Woodside Petroleum in its top 10 most vulnerable.

Despite Rio Tinto being the 2nd biggest miner in the world, its valuation is lower compared to smaller miners in Australia, UK or Canada. In my view, this is unjustifiable, fair value is AUD200 according to my calculation, while current share price is only AUD89. I believe private equity had discovered this mispricing too, hence Rio is the target of buyovers by private equity now. One way to unlock this mispricing opportunity is to buy up the whole company, break it up into parts, and sell to the market again.

I had bought more Rio Tinto last Friday, doubling up my holdings on this stock, on the back of higher base metal price and rumours of buy-over by private equity. Though I do not believe that private equity are big enough to buy over this mining giant, the rumour alone is sufficient to push the share price higher.

Rio Tinto director had bought more shares recently in the early May07.


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## bigdog (7 May 2007)

http://www.wabusinessnews.com.au/en...urge-amid-take-that-BHP-could-make-a-tilt/dba

Rio shares surge amid speculation that BHP could make a tilt
7-May-07 by AAP

Shares in Rio Tinto Ltd surged above $90 for the first time today amid speculation that BHP Billiton Ltd could take out its rival in a $122 billion-plus deal.

The stock closed up more than five per cent after Citigroup analysts fuelled takeover talk about the company.

Citigroup said while Rio Tinto's strong cashflow could make it an attractive target for private equity firms, BHP Billiton was a more likely bidder given the synergies that could be generated.

"Rio Tinto's strong cashflow and nominal gearing may bring it into the crosshairs of private equity, but we think BHP Billiton is a much more likely bidder given synergies and nationalistic control issue of Australian assets," Citigroup said.

"Applying even a modest bid premium means that any party will need to finance $US100 billion ($A121.99 billion)-plus through debt and equity.

"The deal is highly earnings accretive using conservative assumptions, with the major obstacle being concentration iron ore/coking coal market share and lack of BHP CEO-elect."

Rio Tinto shares surged $4.53 or 5.22 per cent to end a closing high of $91.38 while BHP Billiton put on 96 cents or 3.14 per cent to $31.56.

Rio Tinto's closing price gives the company a market value of $105.92 billion.

A union between BHP Billiton and Rio Tinto would create the world's largest producer of coking coal, thermal coal, copper and position the company as the equal largest iron ore producer with Brazilian giant CVRD.

"The greatest gains would be achievable in the iron ore assets in the Pilbara through optimising product specifications, mining fleet, rail distances to the port, etc," Citigroup said.

"Considering the scale and importance of these businesses to both companies, it is hard not to see $US500 million ($A609.94 million)-plus in synergies and cost savings in this area alone."

The brokerage said cost savings and synergies would also be achieved at the Australian coal assets, Canadian diamond mines, product marketing, logistics and global procurement.

Apart from competition concerns, Citigroup listed the lack of an anointed chief executive to replace Chip Goodyear as a major near-term impediment to any bid.

The brokerage said the disposal of non-core assets could overcome the competition concerns.

Citigroup ruled out any interest in Rio Tinto from the major oil companies and suggested private equity would need to team up with an existing industry player like Xstrata to formulate a potential bid.

"From a pure market capitalisation perspective, the major oil companies like BP and Royal Dutch Shell have the size and balance sheet capability to entertain such a transaction, but we do not believe they are interested in returning to investing in the Metals & mining sector after exiting the space in the 1980s and 1990s," Citigroup said.

"Strategic and diversification drivers could prompt other corporates to bid, but ultimately BHPB can pay the most given it has the most synergies to extract."


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## vishalt (7 May 2007)

Jump on to BHP & RIO, they're starting to fire and when they do they are unstoppable, + either one of them may be taken over, i'll laugh if RIO is the one who leads a consortium against BHP lol

But yeah jeez, these things are really blowing out their cylinders, I was tipping CSL to be the first to reach $100, then macquarie, but jeez Rio $92 out of nowhere, just amazing


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## BREND (9 May 2007)

Today the story of takeover continues, and helps to push the price of this undervalued giant:

Shares of Rio Tinto Group, the world's third-largest mining company, surged as much as 8.4 percent amid speculation it may be the target of a takeover bid.

Rio Tinto shares rose as much as A$7.49 to A$97.19 and traded at A$95.90 at 12:53 p.m. Sydney time on the Australian Stock Exchange.

Citigroup Inc. analysts said May 7 BHP Billiton Ltd., the world's biggest mining company, could afford a $100 billion plus offer for its smaller rival.

``Rumors are that they have knocked back a bid,'' said Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. in Sydney.``BHP could be part of that mix. It's just a rumor.'' Ian Head, a Melbourne-based spokesman for Rio Tinto,declined to comment on the share gains, citing company policy to not respond to ``market speculation.''

``We have people looking at a lot of different things,''BHP's president of carbon steel Chris Lynch said at a conference in Melbourne today when asked about a bid for Rio Tinto. ``We won't comment on specific potential targets,'' he said.

Disclaimer: Vested in Rio Tinto

Praise the Lord!


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## Ken (9 May 2007)

If we are dealing with just rumours I think this is very dangerous for the whole market.

When BHP and RIO fall we know what happens across the board.

The all ords plummet...  if RIO and BHP have made ground on takeover talk which isn't going to happen it could turn nasty....

The consequences would be that fund managers sell down stocks that they buy according to the index.

Telstra would be hit hard, as that is an index weighted stock for fund managers.

Just a thought.. but everything looks rosey at the moment.


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## barney (9 May 2007)

Ken said:


> If we are dealing with just rumours I think this is very dangerous for the whole market.
> 
> When BHP and RIO fall we know what happens across the board.
> 
> ...






Got to agree with that Ken ................ I'm just a bit suspicious about this "takeover" being "the real deal", especially when it happens right at the May-June time of year which is historically known as a precurser to a market drop ............. Any one else considered the insto's might be ramping this up to offload a lot of stock at inflated prices prior to the "down season"? ............. Maybe I'm just being skeptical ...................... both RIO and BHP were traded like spec stocks today ................ Interesting stuff.


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## Ang (9 May 2007)

barney said:


> Got to agree with that Ken ................ I'm just a bit suspicious about this "takeover" being "the real deal", especially when it happens right at the May-June time of year which is historically known as a precurser to a market drop ............. Any one else considered the insto's might be ramping this up to offload a lot of stock at inflated prices prior to the "down season"? ............. Maybe I'm just being skeptical ...................... both RIO and BHP were traded like spec stocks today ................ Interesting stuff.




You are right on the money look at the announcement after market, down she goes tommorow, I just hope it doesn't affect the rest of the market. Hopefully the small cap mining co start moving a little more.
kind reg
ang


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## Garpal Gumnut (9 May 2007)

barney said:


> Got to agree with that Ken ................ I'm just a bit suspicious about this "takeover" being "the real deal", especially when it happens right at the May-June time of year which is historically known as a precurser to a market drop ............. Any one else considered the insto's might be ramping this up to offload a lot of stock at inflated prices prior to the "down season"? ............. Maybe I'm just being skeptical ...................... both RIO and BHP were traded like spec stocks today ................ Interesting stuff.





Then again if this were a 0.09 speckie and it had gone up from .088 to .095 , pushing through a reasonable consolidation recently, every man and his dog would be tipping an advance.

The dogs of war are loose. 

A heap of cash, future fund, qantas, millionaire factory is out there chasing these stocks.

It may retrace tomorrow to the top of the range, $88 , interesting to see how the volume goes tomorrow. chart encl.

Garpal


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## Ken (9 May 2007)

It is not a speccy.

It has been a consistant performer.  Rio will most likely break $100 at some point.

Some big money is being put into RIO, so it is impossible to manipulate the same way a 10 cent share would be.

If Rio falls by 5% tomorrow, I have no doubt ZFX and OXR will be punished as well.

It's only a price tag though. BHP, and RIO are expecting to head north.  Its just creating some hype because it has happened so fast.


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## Freeballinginawetsuit (9 May 2007)

Ken said:


> It is not a speccy.
> 
> It has been a consistant performer.  Rio will most likely break $100 at some point.
> 
> ...




Not sure where youre coming from Ken.

Constant performer............RIO,BHP and for that matter Oxiana> not really!. All in the midst of a commodity boom, they've had basically squat SP appreciation for a year.

Investment wise I would agree they have presented opportunities to accumalate a safe entry. From a forward perspective the arguement for a fundamental entry has always stacked up. A relatively sound place to park a substantial holding ......... punting on at some point in time the wheel turning full circle.

IMO if you weren't prepared to go long with a decent holding in the 'index weighters', you may as well not have maintained any long termers in the minnows as well .

Thiers every chance BHP/RIO will leg up further, odds on for much of the new super money (exiting property) parking up in these guys near term


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## telstrareg (9 May 2007)

Would todays FTSE be an indication of what's going to happen on the ASX tommorrow? Remember RIO and BHP are traded there as well. Up 1% on the open which is around 5pm our time, and now down below yesterdays previous close...


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## quarky (10 May 2007)

Well, on ABC Lateline, investors in London are speculating more equity partners to make a bid for Rio Tinto.
But the interviewee said that BHP does have the money to buy it and maintain it.

Amazed at RIO's shares soaring to almost $100 in a day!?


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## bigdog (10 May 2007)

http://www.theaustralian.news.com.au/story/0,20867,21704827-31037,00.html

Rio, BHP soar on takeover talk
By Mandi Zonneveldt and wires 
May 10, 2007 

Rio Tinto shares soar 21% in London trade BHP Billiton is touted as a buyer of Rio Tinto BHP shares jump 5.4 per cent in London trade SHARES in Rio Tinto (rio.ASX:Quote,News) soared 21 per cent in London trading overnight as traders cited market talk that rival miner BHP Billiton (bhp.ASX:Quote,News) was close to tabling a bid for the company. 

"Markets are betting that an offer is due soon," one trader said. 

BHP Billiton (bhp.ASX:Quote,News) was up 5.4 per cent. 

A spokesman for Rio Tinto said the share price move was based on speculation and said the company had not received a bid and was not aware of any offer from BHP Billiton.


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## Garpal Gumnut (10 May 2007)

bigdog said:


> http://www.theaustralian.news.com.au/story/0,20867,21704827-31037,00.html
> 
> Rio, BHP soar on takeover talk
> By Mandi Zonneveldt and wires
> ...




I believe o'nite rise in US and Uk was 11-12% rise for RIO. 
It will be interesting to see how far it goes today.
Still no offer.
How long does one stay on a bolter like this.
Fibonnaci not much use when greed staring one in the face.
$144 sounds like a reasonable target, as reasonable as anyone else, and its a fib number.

Garpal


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## swhmale (10 May 2007)

"A spokesman for Rio Tinto said the share price move was based on speculation and said the company had not received a bid and was not aware of any offer from BHP Billiton.[/QUOTE]"

will BHP pass up the opportunity to become the unrivalled dominant miner in the world?

will ASIC let BHP  take RIO over?

interesting times ahead.


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## wavepicker (10 May 2007)

swhmale said:


> "A spokesman for Rio Tinto said the share price move was based on speculation and said the company had not received a bid and was not aware of any offer from BHP Billiton.



"

will BHP pass up the opportunity to become the unrivalled dominant miner in the world?

will ASIC let BHP  take RIO over?

interesting times ahead.[/QUOTE]


Looks like it may open up a little weaker today


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## bigdog (10 May 2007)

Two big RIO trades this morning at $95.50

Time---- Price ---Volume -Value --------Condition Codes 
08:47:19 95.5000 100,000 $9,550,000.00 OSXT 
08:17:08 95.5000 40,000 $3,820,000.00 SPXT 

BHP early trades
Time---- Price ---Volume -Value --------Condition Codes 
08:59:19 32.1710 200,000 $6,434,200.00 LTXT 
08:58:20 31.5906 200,000 $6,318,120.00 LTXT 
07:55:35 32.2738 20,000 $645,476.00 LTXT 
07:17:32 32.1836 40,000 $1,287,344.00 LTXT


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## Gundini (10 May 2007)

You would think that RIO gave a response to an ASX speeding ticket at 4.10pm yesterday, that the share should have pulled back in London. But it went up 11%. Considering it went up only 6% in the finish here, it stands to reason that the big boys think there is still something in the wind.

I would expect a positive open based on this.


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## Garpal Gumnut (10 May 2007)

Gundini said:


> You would think that RIO gave a response to an ASX speeding ticket at 4.10pm yesterday, that the share should have pulled back in London. But it went up 11%. Considering it went up only 6% in the finish here, it stands to reason that the big boys think there is still something in the wind.
> 
> I would expect a positive open based on this.




agree gundini, unlike the speckies for a share like RIO to advance as it has requires considerable "inside guessing" by market makers. opening soon. lets see what happens 

Garpal


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## bigdog (10 May 2007)

Up 24 cents this morning

Code   Last   Move % Move Buyers Sellers --Open --High ---Low Volume ----Value -----------Last Traded 
BHP   $32.17    +$0.24  +0.75  $32.15  $32.17  $32.31  $32.36  $32.05  2,171,434  69,924,898  10-May 10:07:16


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## Gundini (10 May 2007)

Well, a different Rio today after the usual morning flurry.

Volitility has gone, wont be as much fun to trade as yesterday it seems.

$3 speculative premium built in, for the moment.

Maybe the rumour mungers slept in this morning...


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## Kauri (11 May 2007)

Almost tempted to pyramid in on RIO into a possible W5 but will wait a while and see if all the dust has settled..My stop is still set at $80.50   sometimes discipline in sticking to your plan can cost..in the short term anyway..


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## reece55 (11 May 2007)

Hi Kauri, good to see you back posting regularly again.

Same view from here, on any other day technically you would have a stab I would have thought.... But with the market so volatile, it does make you have a think......

I have opened a small long position today, enough to make some dough but not big enough for me to get too nervous.... Looks to be recovering nicely as we speak..

Cheers
Reece


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## Kauri (22 May 2007)

I wonder if RIO is starting off another push.... will watch to see if there is a pyramid opportunity coming up.. at least I can move my stop up to just above $89 (W4 low??)..


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## Sean K (23 May 2007)

Just in from DJ Newswires:



> MELBOURNE (Dow Jones)--Australia's Energy Resources of Australia Ltd. (ERA.AU) has suffered a blow to its ambitions to develop the Jabiluka uranium deposit with traditional owners of the land Wednesday restating their opposition to a mine.
> 
> The Mirarr people are upset that ERA's parent company Rio Tinto Ltd. (RTP) earlier this week indicated it was hopeful they would soon approve mining at Jabiluka.
> 
> ...




Read: Not enough money has been offered to appease the Sacred Beer Gods.


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## Kauri (23 May 2007)

Have pyramided on my original position, ideally would have liked to see the W*b* high taken out first, so wouldn't be surprised to see a late sell-off again today if it fails to break it..


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## MiningGuru (23 May 2007)

Currently above this point. It is making a late afternoon aurge. Now at $94.71

Look slikely to hold above that point and indicate a further push on towards the price target of $105.


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## billhill (23 May 2007)

More rumors about takeovers. This time speculation is that RIO, BHP or CVRD will outbid alcoa for canada's alcan.

http://www.canada.com/nationalpost/...=62eb2b41-8dd0-42fd-b56c-60125e260708&k=99592


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## Kauri (1 June 2007)

Looks like RIO might be in the very early stages of building a little ledge?????


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## Kauri (9 June 2007)

The short-term part of the trade has closed out a loss, the original and pyramid longer-term trade are still hanging in there. Looks like my original W*4* labelling was a little premature... may cost me my longer-term trades... but it happens..  ..


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## samfisher18 (12 June 2007)

Found this interesting article at bloomberg:

Diamonds by Linares, Gemesis May Cut De Beers, Rio Tinto Sales 

By Danielle Rossingh

June 11 (Bloomberg) -- It may be time to lighten up on Rio Tinto Plc and Anglo American Plc, not to mention Petra Diamonds Ltd. and Firestone Diamonds Plc, if Bryant Linares has anything to say about it. 

The 45-year-old Boston native can replicate in two weeks the 100 million years that nature needs to make diamonds from coal, and his success may soon cost the world's mining companies $2.5 billion annually. 

Sales of laboratory-produced gems will rise 10-fold to 1 million carats at $2,500 each within three years, compared with $8,000 for a mined diamond, says David Hargreaves, a Cobham, U.K.-based analyst who has followed the industry for 25 years. The stones, created by Linares's Apollo Diamond Inc. of Boston and Gemesis Corp. of Sarasota, Florida, are so fine that De Beers says it has spent $17 million, or about two weeks of profit, to build machines needed to spot them. 

``We'd all be foolish if we didn't admit we were a little nervous,'' says Keith Johnson, chief executive officer for diamonds at London-based Rio Tinto, which controls the world's largest diamond mine, called Argyle in Australia. 

The man-made gems may hurt profits and margins at companies that dig up the stones, said Andrew Ferguson, who has about 5 percent of his holdings in diamond miners at New City Investment in London, which oversees about $637 million of natural-resource stocks. 

Most to Lose 

London-based Anglo American, the owner of 45 percent of De Beers, has the most to lose. Anglo says De Beers accounted for $463 million, or 5 percent, of operating profit last year. For Rio, also based in London, diamonds contributed $205 million, or 2.8 percent, of earnings in 2006. Jersey, U.K.-based Petra Diamonds, which mines in South Africa and is exploring in Angola, and Firestone Diamonds are betting their entire future on the gems. 

Man-made diamonds are molecularly the same as those panned from Angolan rivers and mined in the Canadian Arctic. Output is set to increase from the current 100,000 carats a year, says Gemesis, which started production in 2002. 

That compares with annual production of rough, mined diamonds totaling 155 million carats, three-quarters of which are cut into stones smaller than a half-carat, said Hargreaves, a former head of mining research at London-based James Capel & Co., a unit of HSBC Holdings Plc. One carat equals 200 milligrams; when round, it's 6.5 millimeters across, or almost the width of a pencil-top eraser. 

The Gemological Institute of America, an independent assessor of diamonds for Tiffany & Co. and Cartier that's based in Carlsbad, California, started grading the synthetic stones this year to ensure consumers can know the difference. 

A Yellow Stone 

Fiona McEwen, an advertising executive at McEwen Advertising in Johannesburg, knows the difference and doesn't care. Her natural white diamond was stolen from her finger in an armed robbery earlier this month. She wears a man-made yellow diamond of more than a carat now. 

``It's a beautiful alternative and an affordable alternative,'' McEwen said. ``I just couldn't afford an earth- grown yellow diamond. It would be completely out of my reach.'' 

Synthetic gems can be produced in labs in as little as four days, are on average 40 percent less expensive and have the same chemical, physical and optical properties as any natural rough stone, according to Gemesis and Apollo. Rough diamonds are mined from volcanic-rock structures called kimberlites. 

``The industry should be very concerned about this,'' Hargreaves says. ``Synthetic diamonds may not come out of the ground or the sea, but they are the real thing and will pass any test.'' 

Not so, says De Beers, the world's largest diamond company and which sells machines for as little as $10,400 that can spot the man-made stones. 

Diamonds and Wars 

``All synthetics can be quickly and easily detected,'' Lynette Gould, a London-based spokeswoman for De Beers, said in an e-mailed response to questions. ``Synthetics are a totally different product.'' 

The growth of synthetic gems has raised concern among diamond-mining companies at a time when public scrutiny of gems from war-ravaged countries is increasing. ``Blood Diamond,'' a movie starring Leonardo DiCaprio and set in Sierra Leone during the 1990s, heightened awareness of so-called conflict diamonds, gems sold by rebels who control the mines to pay for arms. 

Former Liberian President Charles Taylor is among those accused by the United Nations of financing wars with diamond sales. 

Under a 2002 international agreement known as the Kimberly Process, diamonds must be shipped in tamperproof containers with certificates verifying their origin as legitimate sources. 

Garage Technology 

``The intrinsic appeal of a diamond is its emotional appeal,'' Charles Wyndham, a former De Beers director and chairman of PolishedPrices.com, an Antwerp-based diamond-price researcher, said in an interview in London on May 17. ``Anything that attacks this emotional appeal is dangerous. The industry has got to become much more transparent.'' 

Apollo was founded in 1990 by Bryant Linares's father, Robert, who holds a doctorate in materials science from Rutgers University in New Brunswick, New Jersey, and received a master's degree in business at Fairleigh Dickinson in New Jersey, according to Apollo. The elder Linares, who started his career at Bell Laboratories and worked on the diamond technology in his garage in Boston, is now chairman. 

The company has already made more than 1,000 gemstones and is targeting production of ``several hundreds of thousands of carats'' by 2012, Bryant Linares said in an interview. It's also considering an initial public offering to raise cash, he said. 

Russian Science 

``Man-made diamonds will be the fastest-growing segment of the entire jewelry market,'' said Linares, who predicts so-called cultured gems will be 20 percent of the $74 billion-a-year market for diamond jewelry within a decade. ``This is a product extension. It's like Californian wine production, which helped grow U.S. wine consumption.'' 

Gemesis, the first company to produce cultured diamonds, was founded in 1996 after U.S. Brigadier General Carter Clarke paid $170,000 for three machines created by a Russian scientist. Clarke moved the table-sized units to the U.S., where he started the company with help from the University of Florida in Gainesville. 

The machines grow gems from a diamond seed, which is put under the pressure of 58,000 atmospheres and heat of 2,300 degrees Fahrenheit, close to the melting point of steel. 

``The aim is to take 10 percent of the rough market, in value terms, in five years,'' says Stephen Lux, chief executive officer and president of Gemesis, who used to work at Engelhard Corp. ``The sky is the limit.'' 

`Room for Everyone' 

John Teeling, founder and chairman of African Diamonds Plc, a Dublin-based mining company in which De Beers has a stake, doesn't see synthetics as a threat. 

``If you meet a woman that you are going to spend the rest of your life with and have babies with, are you going to give her a diamond made in a lab in Pittsburgh or are you going to give her the real thing?'' Teeling said. ``I'd be killed if I did that.'' 

Synthetics first emerged in 1955, when a team of scientists at General Electric Co. transformed graphite into diamonds, according to GE's Web site. The gems are mainly used in industrial applications, such as cutting tools. About 1 billion carats of synthetic diamonds are produced a year, according to Apollo. 

Man-made gems may end up compensating for an expected shortage of mined stones, said James Picton, a diamond analyst with W.H. Ireland Ltd., who has followed the market for three decades. Diamond miners produced $13.2 billion of rough stones last year, while demand was $15 billion, he said. 

``At the edge of the market, there is room for these synthetic diamond businesses to thrive,'' said Graham Birch, who helps manage about $8.5 billion of precious-metals equities at BlackRock Investment Management Ltd. in London. ``Look at the balance of supply and demand in the rough market. There just haven't been enough diamond mines discovered.'' 
From "http://www.bloomberg.com/apps/news?pid=20601109&sid=ax6nfaTs6FKg&refer=home"

Just thought it would be helpful information for all rio tinto followers, although it shouldnt be an immediate worry/


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## Kauri (14 June 2007)

Is the RIO take-over/merger speculation going to get another boost... seems like it is the current *rumour* ... has lifted RIO in the U.K. overnight...




> Bullish comments about 2007 earnings by Antofagasta and recurring talk of a tie-up between Rio and Xstrata is lifting the mining sector sharply this afternoon, said Andrew French, a sales trader at E*Trade Securities in London.
> 
> Rio Tinto, the world's third-largest mining company ranked by sales, climbed 3 percent.........


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## Kauri (14 June 2007)

Kauri said:


> Is the RIO take-over/merger speculation going to get another boost... seems like it is the current *rumour* ... has lifted RIO in the U.K. overnight...




   Whether they have any factual foundation or not the *rumours* have given RIO a little boost locally today.... nudging up agin a tentative oversized triangle currently..


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## Kauri (15 June 2007)

Taken the opportunity to move the long-term stop up to the top of what I see as the possible minor W1...


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## Sean K (15 June 2007)

Kauri said:


> Taken the opportunity to move the long-term stop up to the top of what I see as the possible minor W1...



Kauri, you must be making a killing at the moment! Great work. 

What the brokers say, out of interest, with target price:

Credit Suisse......15-Jun-07......Outperform ........... $97.72    
Merrill Lynch.......13-Jun-07.... .Buy, Medium Risk .. $100.00  
Citi  .................06-Jun-07.... .Buy, Medium Risk .. $103.00   
ABN Amro  ........30-May-07.... .Buy .................... $103.30    
Macquarie  .......22-May-07......Outperform .......... $93.46    
UBS  ................22-May-07..... Buy 2................. $108.00  
JP Morgan  ........10-May-07 .....Overweight.......... $110.00    
Deutsche Bank  ..20-Apr-07 ......Buy  ..................$102.00


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## Sean K (15 June 2007)

I think the rumour mill will keep this cooking for a while, pending any major market hiccups.

1211 [Dow Jones] Mega-merger in resource sector perhaps not far off, says Southern Cross Equities director Charlie Aitken. "With A$10 billion plus of free cash flow and no gearing, you can see why the world is starting to see Rio Tinto (RIO.AU) as an obvious takeover target." Adds, BHP (BHP.AU) remains "a grossly cheap stock on all investment criteria." Favors aggressive buying of BHP, RIO, Fortescue (FMG.AU), Oxiana (OXR.AU), Alumina (AWC.AU) and Kagara (KZL.AU). (DWR)


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## >Apocalypto< (15 June 2007)

I see a small pull back then straight to 100 and more. Unless speculators pull away from the current driver.


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## Kauri (15 June 2007)

kennas said:


> I think the rumour mill will keep this cooking for a while, pending any major market hiccups.
> 
> 1211 [Dow Jones] Mega-merger in resource sector perhaps not far off, says Southern Cross Equities director Charlie Aitken. "With A$10 billion plus of free cash flow and no gearing, you can see why the world is starting to see Rio Tinto (RIO.AU) as an obvious takeover target." Adds, BHP (BHP.AU) remains "a grossly cheap stock on all investment criteria." Favors aggressive buying of BHP, RIO, Fortescue (FMG.AU), Oxiana (OXR.AU), Alumina (AWC.AU) and Kagara (KZL.AU). (DWR)



  Hi Kennas,
               Agree there will be some consolidation before long, my favourite play is for RIO to be taken out, hopefully by BHP :aus: . Even though there are a lot of *rumours *floated I think if BHP were to make a move they would wait for the new boss to get in the chair first, and also with so much *apparent interest* who would want to place the first bid, undoubtably one of the other players at least would come in and knock it over .. much like WMC... now where is that _egg on face_ smilie when you want it....
   Cheers
  Kauri


----------



## MiningGuru (18 June 2007)

Opened at above $99 today.

Will be today be the day RIO cracks the $100 barrier?

IMO there is a great chance it will breach $100 sometime today, even if it does not close above this level.

Once it closes above this phsychological level it will probably quickly spurt onwards higher, as nothing will be holding it back.


----------



## Kauri (18 June 2007)

Bingo...we have a winner...Rio has hit the $100.00 mark... a bit of psychological-selling maybe-or will it power on???


----------



## vishalt (18 June 2007)

We're part of history folks, a very special moment in the stock market today. 

Congratulations to anyone who had RIO, and to its Clifford for leading the company for a solid performance.


----------



## MiningGuru (18 June 2007)

Just broke past the resistance at $100

Watch it run now!
Now that pysc barrier has been crossed.

I think it will close at above $100 now and quickly move up further over the next few days


----------



## Awesomandy (18 June 2007)

MiningGuru said:


> I think it will close at above $100 now and quickly move up further over the next few days




Ah... closed at a frustrating $99.99 - much like you are on 99 and the umpire calls stumps. 

Doesn't matter, it's definitely been a nice ride from around $70.


----------



## vishalt (19 June 2007)

old news now, looking forward to $110 soon lol

the ASX is too lazy to issue a speeding ticket or launch and inquiry really, HURRY UP AND BID FOR IT BHP


----------



## Kauri (21 June 2007)

Am now using a Moving average as a stop... for no other reason than I am moving house(I hope  ) and will not be able to follow it as closely as I should.
Cheers
Kauri


----------



## Kauri (25 June 2007)

RIO looks like it may be starting to fly a flag.. even possibly the first stages of a triangle...
...Cheers
........Kauri


----------



## Kauri (27 June 2007)

Well, my trailing Moving average stop for RIO has been hit at $97.40 and I am out.... watch the flag break up now..   ...
.....Cheers
..........Kauri


----------



## the barry (12 July 2007)

Can't believe no one has posted about rio's take over of alcan yet. Would love to know peoples thoughts, seem to have paid a hefty premium over the share price. Some 60 percent over all time highs. Would people think this will move the share price up, or have they paid to much of a premium even though alcan have a supposed quality portfolio?


----------



## Uncle Festivus (12 July 2007)

the barry said:


> Can't believe no one has posted about rio's take over of alcan yet. Would love to know peoples thoughts, seem to have paid a hefty premium over the share price. Some 60 percent over all time highs. Would people think this will move the share price up, or have they paid to much of a premium even though alcan have a supposed quality portfolio?




Yes it is a bit quiet? I think after some analysis is done the price may be shown to be generous, at a big premium over the nearest offer and share price. But, who am I to argue with the experts in the business? Depends if it's debt funded I suppose. I think the share price will initially rise the next few days but take a dip when all the maths is added up.

Combined debt jumps from approx 8.4B to 46.3. Maybe someone who is familiar with these arrangements can point out the positives here???


----------



## Garpal Gumnut (12 July 2007)

I was looking at some support and resistance points for RIO going back over the past 10 years and noted an amazing pattern of support and resistance points at $23 intervals. The next "$23" resistance point is $111.

I'm not given to predictions and am no Yogi. I am however smarter than the average bear, and would be interested should RIO retrace from $111 back down to $88 which was the last previous resistance.

Enclosed is the monthly chart of RIO back to 1997 

Garpal


----------



## Ferret (14 July 2007)

Market psychology sure is a strange thing.  

RIO have been going up on rumours of this takeover, but it was always going to be expensive at this time.  When a deal is finally done, the share price takes a knock.

Meanwhile, BHP is going up on rumours that it will takeover Alcoa, but of course to pull this off they will have to pay top dollar too.  So if BHP do announce something will their share price also be hit?

Ferret


----------



## vishalt (14 July 2007)

the market is confusing. when worleyparsons acquired some canadian firms, and zinifex acquired wolfden, the shareprices surged. 

so its a gamble really.


----------



## purple (14 July 2007)

depends on how much the market values the purchase price...Alcan was viewed as an expensive buy.

from today's news here are some interesting ratios :
http://www.smh.com.au/news/business/rio-bets-on-prices-holding/2007/07/13/1183833769360.html

_"EBIT to sales margin (Rio 57 per cent, Alcan 12.6 per cent), 
return on equity (Rio 41 per cent, Alcan 16 per cent)."_

but the bottom line  imho, is that the market is sometimes tunnel visioned.

_"Assuming Rio's bid for Alcan does succeed, the combined group would be the global aluminium industry leader, with about 17 per cent of the world's bauxite production, 12 per cent of alumina production and a similar share of the aluminium market."_

good long term strategy for Rio...the market's too jittery, and most of them are not the deep analyst type..


----------



## Ferret (3 August 2007)

I can't believe RIO's half year result hasn't attracted some comment.  

Here we are all counting on big profits from the miners to keep the market moving ahead, and RIO announces a drop in profit due to cost pressures.  

BHP must be feeling the same pressures, are they going to dissappoint too?

How about the small miners and explorers? They don't have the income of the big guys to offset increased costs.  Does this mean they are struggling?


----------



## Gundini (3 August 2007)

Garpal Gumnut said:


> I was looking at some support and resistance points for RIO going back over the past 10 years and noted an amazing pattern of support and resistance points at $23 intervals. The next "$23" resistance point is $111.
> 
> I'm not given to predictions and am no Yogi. I am however smarter than the average bear, and would be interested should RIO retrace from $111 back down to $88 which was the last previous resistance.
> 
> ...




Interesting an excellent perspective how it has panned out Garpal, well done!

Ironically your post was made 1 day befor the all time high, but low today was $88.01, an amazing retracement indeed. The $23 theory seems to have some substance albeit I'm not sure why. Hope you shorted this one, cheers.


----------



## ehwebba (9 October 2007)

i see the recommendations for rio is still buy, forcasting $122.00 as the value. interesting with the $23 theory. its been sitting on around $100 for awhile. also interesting to see how it will go tomorrow with the alcan takeover bid approved by the gov.


----------



## vishalt (9 October 2007)

Morningstar, a company I'm doing temporary work with just recommended it, and I totally agree with the report!



> Morningstar - http://www.investordaily.com.au/stockoftheweek.htm
> 
> Stock of the week
> 
> ...


----------



## vishalt (27 October 2007)

It has begun!

Rio Tinto has stepped up to the next level in the commodities fight, I hope everyone who holds Rio is excited as I am about the Alcan acquisition. 



> Alcan joins Rio Tinto to create global aluminium leader
> 
> Alcan today joined the Rio Tinto group following the successful Offer for Alcan by a subsidiary of Rio Tinto. The expanded aluminium product group, formed by the combination of Alcan and Rio Tinto's existing aluminium assets, today became the new global leader in aluminium and will be known as Rio Tinto Alcan.
> 
> Rio Tinto chief executive, Tom Albanese and Rio Tinto Alcan chief executive, Dick Evans hosted special events at Rio Tinto Alcan's Montreal headquarters and highlighted the opportunities created by bringing Alcan into the Rio Tinto Group, and the potential for continued strong growth in the aluminium sector. Similar employee events took place in Brisbane.




Last I checked analysts at Morningstar & I think UBS and several others rated it $122+, but I think it could go much much higher given aluminum's potential.


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## overule (27 October 2007)

vishalt said:


> It has begun!
> 
> Rio Tinto has stepped up to the next level in the commodities fight, I hope everyone who holds Rio is excited as I am about the Alcan acquisition.
> 
> ...




Not really sure if RIO will rise to $122. How long before RIO will rise to $122 ? in Months time?

Read from news saying that "Rio Tinto ratings downgrade due to Alcan".
http://news.ninemsn.com.au/article.aspx?id=311508


----------



## vishalt (29 October 2007)

Agencies are just jumping on a bandwagon and downgrading most big deals because of the sub-prime collapse. 

Judge Rio & Alcan merge for yourself, it soared $6 today, they can keep downgrading howmuchever they want, these are 2 of the best managed businesses out there.


----------



## michael_selway (29 October 2007)

vishalt said:


> Agencies are just jumping on a bandwagon and downgrading most big deals because of the sub-prime collapse.
> 
> Judge Rio & Alcan merge for yourself, it soared $6 today, they can keep downgrading howmuchever they want, these are 2 of the best managed businesses out there.




RIO still has great forward numbers do you believe it (different to BHP)!

*RIO - Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 686.6 678.0 871.7 996.7 
DPS 131.4 132.7 136.9 142.6 

BHP - Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 305.4 356.0 316.6 
DPS 55.4 62.4 74.1 76.1 *

thx

MS


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## vishalt (29 October 2007)

Yeah but note that CommSec has not published Rio's 2010 forecast, and Rio is the first one to have dropped its profit while BHP has maintained substantial rises.

Anyway those numbers could substantially appreciate should demand keep at current levels and US housing reverse past 2009.


----------



## michael_selway (29 October 2007)

vishalt said:


> Yeah but note that CommSec has not published Rio's 2010 forecast, and Rio is the first one to have dropped its profit while BHP has maintained substantial rises.
> 
> Anyway those numbers could substantially appreciate should demand keep at current levels and US housing reverse past 2009.




Different FY's it appears

*RIO - EPS(c) PE Growth 
Year Ending 30-12-07 678.0 15.8 -1.3% 
Year Ending 30-12-08 871.7 12.3 28.6% 

BHP - EPS(c) PE Growth 
Year Ending 30-06-08 305.4 15.0 11.0% 
Year Ending 30-06-09 356.0 12.9 16.6% *

thx

MS


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## Rainmaker2000 (29 October 2007)

Hey guys.......just a valuation question, are you guys happy to pay 14 X 2010 earnings for mining companies.......it just seems like things are getting a little out of hand......these aren't growth companies, they are cyclicals who just dig stuff out of the ground and sell it......unless these are last available deposits of these resources on earth making these guys an 'asset play', one would have to have grave doubts about these valuations.....just wouldn't mind discussion is all


----------



## vishalt (29 October 2007)

Rainmaker2000 said:


> Hey guys.......just a valuation question, are you guys happy to pay 14 X 2010 earnings for mining companies.......it just seems like things are getting a little out of hand......these aren't growth companies, they are cyclicals who just dig stuff out of the ground and sell it......unless these are last available deposits of these resources on earth making these guys an 'asset play', one would have to have grave doubts about these valuations.....just wouldn't mind discussion is all



The valuations are fair, even the world's biggest company (Mobil) has a valuation of 13, and China/India demand is huge. 

I don't see the point of sticking around and not doing anything while these companies keep soaring?


----------



## Rainmaker2000 (29 October 2007)

Yeah, so I guess you want to make some cash trading....its tough to understand the valuations, like for the actual companies, cause Mobil or whatever may well actually be on a PE 13 for this year but BHP and RIO are PE 14 for 2010 which is still 3 years off.....they are closer to PE 20 for this year.... there are like, real growth companies trading at about PE 14 now.....it's going to be an interesting few years for the Aussie index!


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## vishalt (29 October 2007)

Yes, yes it is. 

I for one refuse to sit on the sidelines though!

P/E's get out of hand when they reach like 20+ anyway, so BHP/Rio are fair value, I'd start getting worried when they reach 19+, but right now just enjoy the bull.


----------



## mlevit (4 November 2007)

I had bought into RIO when it was $88 in September and have seen a nice escalation in price over the past few months.

Taking into consideration last Thursdays $115 price, would you guys hold RIO (long term)? or would I be better off selling and awaiting the talked about US market recession to buy back in again?


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## vishalt (4 November 2007)

mlevit said:


> Taking into consideration last Thursdays $115 price, would you guys hold RIO (long term)? or would I be better off selling and awaiting the talked about US market recession to buy back in again?



I'm holding on, most of Rio's profits are from suppling China, not UslessSA. 

And what is this recession people speak of? The one that they kept talking about since 2003 that still hasn't happened lol?


----------



## explod (4 November 2007)

vishalt said:


> I'm holding on, most of Rio's profits are from suppling China, not UslessSA.
> 
> And what is this recession people speak of? The one that they kept talking about since 2003 that still hasn't happened lol?




I held RIO up to a month ago and got out at $112.   Had a friend works with NAB was in US recently and said many over there are accumulating gold and gold stocks.   I have my portfolio now primarily in NEM and it is a blue chip gold co., was recently sold down due to some problems which it has now overcome and is on the rise again.  Other aspect is that local gold stocks are being effected to some degree in the negative by our rising dollar. The correction is on in my view but the time line is in doubt.   In the big fall of 1929 to 1933 it took that long to find the bottom.  As with the US dollar fall. it has been massive but it has been gradual so few have taken a lot of notice.  But if you put those things together then the smart thing to do becomes fairly clear.  

I am looking to bottom trawl back into stocks like Rio and BHP after it all happens, but to me making money in the meantime is essential to my strategy.   There is not enough in it for the old buy and hold strategy when currencies are losing value.  The rise in the cost of goods such as food, oil, etc., is actually the loss of value in money.


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## jurn (8 November 2007)

LONDON, Nov 8 (Reuters) - BHP Billiton   said on Thursday it had made a takeover approach to Rio Tinto   in a move that could create a $300-billion-plus mining giant, but that its smaller rival had rejected the proposal.

Rio Tinto shares leapt as much as 24 percent in London after BHP, the world's biggest miner, said it continued to seek talks with Rio over its proposal.

"BHP Billiton now confirms that it recently wrote to the Board of Rio Tinto outlining a proposal in relation to a potential combination with Rio Tinto on terms incorporating a premium," BHP said in a statement.

"Rio Tinto rejected the proposal. BHP Billiton has again written to Rio Tinto and intends to continue to seek an opportunity to meet and discuss its proposal with Rio Tinto."

At 1110 GMT, Rio shares in London were up 20.7 percent at 5,250 pence, after hitting a record 5,399 pence. BHP was up 1.7 percent at 1,785 pence.

A marriage between BHP and Rio would assemble a massive controlling force across a range of industrial-use commodities such as copper, aluminium, iron ore and coal, but would likely face competition concerns.

"In preparing its proposal, BHP Billiton has examined in detail the regulatory issues and other practicalities of a combination," BHP said in its statement.

"There can be no assurance that any transaction or offer will result from BHP Billiton's proposal."

Long-standing speculation of a tie-up between BHP and Rio has gathered pace after Rio, the world's third-biggest miner, completed its $39.1 billion purchase of aluminium group Alcan on Wednesday.

BHP declined further comment. Rio was not immediately available. (additional reporting by James Regan in Sydney) (Reporting by Mark Potter, Editing by Dan Lalor and Quentin Bryar) ((mark.potter@reuters.com; +44 20 7542 7717; Reuters Messaging: mark.potter.reuters.com@reuters.net))

Keywords: RIOTINTO BHPBILLITON


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## M34N (8 November 2007)

Does anyone think it's strange that on a day like today, where the ASX was down over 2%, that RIO shares were actually up? I was watching their shares closely today, and noticed a strong bullish trend on it all day from around 10:20AM. Some people have inside knowledge of this proposed takeover/merger coming? I don't think in all the years I've watched the market that a stock like RIO has gone up 1% on such a negative day with no news at all to mention?

Watched a similar trend in London trading last night, where RIO was up about 3% early morning (but after the US trading session ended up only 0.4%) while the rest of the FTSE was down strongly over 1%. Seem strange to anyone else? This is not normal market behaviour!


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## googly (8 November 2007)

RIO NOW UP 30% IN LONDON.

THIS WILL GO TO $140 ON THE ASX TOMORROW!!!!!!!!!!!!!!!!!
People are going to make so much money it will be sickening!!!!!


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## dutchie (8 November 2007)

G'day M34N

Nice pickup and observation regarding RIO's up move on a down day.

Theres ALWAYS inside information.

Cheers

Dutchie


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## M34N (8 November 2007)

dutchie said:


> G'day M34N
> 
> Nice pickup and observation regarding RIO's up move on a down day.
> 
> ...



Yeah seemed strange to see this announcement today after the movements in RIO, something is definitely going on there, that's no coincidence. Made me a little annoyed because I sold RIO shares just today for $110.00  LOL oh well


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## overule (8 November 2007)

googly said:


> RIO NOW UP 30% IN LONDON.
> 
> THIS WILL GO TO $140 ON THE ASX TOMORROW!!!!!!!!!!!!!!!!!
> People are going to make so much money it will be sickening!!!!!




For ASX, i don't think it will be up by that much given this announcement.

"Rio Tinto rejects bid from BHP Billiton"

http://news.ninemsn.com.au/article.aspx?id=66849


----------



## vishalt (9 November 2007)

overule said:


> For ASX, i don't think it will be up by that much given this announcement.
> 
> "Rio Tinto rejects bid from BHP Billiton"
> 
> http://news.ninemsn.com.au/article.aspx?id=66849



Yes it will?

It DOESN'T matter if Rio rejected it, all institutions/brokers/speculators care about is that BHP is GOING AFTER Rio, that its actually made a bid, rejection comes after.


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## Rainmaker2000 (9 November 2007)

I love this type of merger.....it only happens at the top of the cycle.....its a funny arrangement cause BHP will exchange its over priced shares for RIO's more overpriced shares and every just continues on with life and the corporate egos are soothed and they get higher paychecks...the investment bankers love it and the lawyers, there are many competition issues.....Remember Time/Warner and AOL......Gee it would have sucked to be a Time shareholder and to a lessor extent it sucks to be a BHP holder.....The 'professional shareholders' will cheer all of this on but this is a clear sell time on BHP......not that this is advice you all


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## The Once-ler (9 November 2007)

Rainmaker2000 said:


> I love this type of merger.....it only happens at the top of the cycle.....its a funny arrangement cause BHP will exchange its over priced shares for RIO's more overpriced shares. The 'professional shareholders' will cheer all of this on but this is a clear sell time on BHP......not that this is advice you all




Yeah, good one. 

And I remember people saying the same thing when BHP bought western mining and Olympic dam. The bargain of the century in hindsight and not the top of the cycle.


----------



## Rainmaker2000 (9 November 2007)

Mate, I must confess I thought BHP's buy of Western Mining was an astute deal....an exceptional buy.....imagine one of the world's best nickel deposits being a massive uranium pit at the start of the biggest uranium boom ever....you can see what a deal it was cause their high price bid was a killer bid......and then it was a seemless integration of assets.....this one well...hehehe...it certainly is a game changer


----------



## Garpal Gumnut (9 November 2007)

Gundini said:


> Interesting an excellent perspective how it has panned out Garpal, well done!
> 
> Ironically your post was made 1 day befor the all time high, but low today was $88.01, an amazing retracement indeed. The $23 theory seems to have some substance albeit I'm not sure why. Hope you shorted this one, cheers.




Thanks Gundini, sorry for the late reply. I didn't see your post. I haven't shorted RIO at any stage as was punting on a t/o. I was short of cash in August though so didn't get any on those beaut lows. Isn't greed n fear good for the soul!! 

The next "$23" point is $134 and then $159, at which point I think I'll rollover into BHP and take an overseas trip and watch that little bugger get into 3 figures.

I enclose a weekly chart of RIO.

gg


----------



## michael_selway (9 November 2007)

Garpal Gumnut said:


> Thanks Gundini, sorry for the late reply. I didn't see your post. I haven't shorted RIO at any stage as was punting on a t/o. I was short of cash in August though so didn't get any on those beaut lows. Isn't greed n fear good for the soul!!
> 
> The next "$23" point is $134 and then $159, at which point I think I'll rollover into BHP and take an overseas trip and watch that little bugger get into 3 figures.
> 
> ...




Are you sure BHP is still bullish at current prices (to $100+)?

*BHP - Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 301.6 346.8 312.2 
DPS 55.4 62.1 73.0 76.3* 

*RIO Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 686.6 653.5 833.4 966.8 
DPS 131.4 130.9 134.5 141.4 *

thx

MS


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## vishalt (9 November 2007)

I'm done trading Rio Tinto, it was an exceptional stock to play in , what a beautifully managed company too, it played its cards well. 

It's way too expensive to buy even in small amounts at those prices though, and the 22 P/E is quite scary, time to switch to the other big guns: BHP/Xstrata/CVRD.


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## Garpal Gumnut (9 November 2007)

vishalt said:


> I'm done trading Rio Tinto, it was an exceptional stock to play in , what a beautifully managed company too, it played its cards well.
> 
> It's way too expensive to buy even in small amounts at those prices though, and the 22 P/E is quite scary, time to switch to the other big guns: BHP/Xstrata/CVRD.




I wouldn't not invest in stocks with a high price. I'll post a chart in the BHP thread later as I believe it is capable of the same trajectory as RIO

gg



michael_selway said:


> Are you sure BHP is still bullish at current prices (to $100+)?
> 
> *BHP - Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




Michael, I'm not a funnymentalist, but accept your figures and take em on board. BHP has huge potential and with RIO assets will be a $100 stock soon. I've lived most of my life in towns/cities with a large BHP presence and respect their management style and assets. I'll post a chart in the BHP thread later to back up my projections. What these forward forecasts can't factor in is the vitality on the ground in these big mining operations. Given the right infrastructure, customers and luck, (yes luck with China, Aus governments etc.),  a continuing bull advance is possible.

gg


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## vishalt (10 November 2007)

Thanks garpal, 

I noted your $23 projections earlier and that was very good, post it soon id love to see what you think about it!


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## gfresh (11 November 2007)

$130 is just the beginning.. 

News over the weekend indicates BHP has secured another $US70B from Citigroup which could be added to their $140B offer of 3 for 1. This may allow them to try for a possible 4 for 1 to secure RIO. 

Given current market conditions, would anybody agree that BHP would like to stitch this up as quick as possible, so their SP doesn't drop too much further? Hence costing them more for the bid? Also under British takeover rules, apparently they must launch another offer within 8 weeks if they are to do so.


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## prawn_86 (11 November 2007)

Bloomberg has something about BHP securing $70 billion through citigroup, so the next offer (if there is one) might not be a total scrip offer.


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## Garpal Gumnut (11 November 2007)

I just came across this in The UK Telegraph.

The Chinese are building a stake in RIO and Tom Albanese CEO just happens to be in China "travelling".

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/11/11/cnrio111.xml

gg


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## vishalt (11 November 2007)

Yeah I think this is going to get a whole load uglier, its like Barclays vs RBS for ABN Amro, those were big bids and there were a lot of them. 

I might actually take up a small position in Rio again.


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## Garpal Gumnut (11 November 2007)

Yes, I agree, I think both RIO and BHP will go up on this news.

What did the Chinese say about living in interesting times ??

gg


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## haemitite (11 November 2007)

gfresh said:


> $130 is just the beginning..
> 
> News over the weekend indicates BHP has secured another $US70B from Citigroup which could be added to their $140B offer of 3 for 1. This may allow them to try for a possible 4 for 1 to secure RIO.
> 
> Given current market conditions, would anybody agree that BHP would like to stitch this up as quick as possible, so their SP doesn't drop too much further? Hence costing them more for the bid? Also under British takeover rules, apparently they must launch another offer within 8 weeks if they are to do so.



If they bid 4:1 their share price would sink out of sight. Mainly as RIO shareholders would own more of the merged entity, not a great outcome when BHP's cap is considerably larger 

The market has RIO at 3.1 right now - looks about right


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## Blank1979 (27 November 2007)

Tom Albanese has spoken to Business Spectator about the proposed merger with BHP. It's a great piece that reveals some good thinking behind the merger, the the value proposition to shareholders and what it means with / for China.

Check it out
http://www.businessspectator.com.au...m-Albanese-chief-executive-9BE2W?OpenDocument


----------



## jkool (7 December 2007)

An exciting stock to watch this RIO nowadays isn't it? 

I looked at its latest annual reports numbers (Dec2006...seems like light years away) from value prospective so for those of you interested in fundamentals you are welcome to have a look http://www.soundofgold.com/2007/12/05/australia-rio-tinto-ltd-2006-financial-results-analysis/

For my money: its a great company with seemingly not much clouds on horizon in the immediate future. If there is something to worry about than perhaps purchasing this stock at too high a price and overall cyclical nature of mining/resources/commodities industry. Oh yeh and don't forget the potential takeover related risks.


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## Nyden (7 December 2007)

haemitite said:


> If they bid 4:1 their share price would sink out of sight. Mainly as RIO shareholders would own more of the merged entity, not a great outcome when BHP's cap is considerably larger
> 
> The market has RIO at 3.1 right now - looks about right




Yes, why does everyone believe the offer has to go up in increments of 1 share? Offers do get made in .5 & the likes as well, guys :

The market doesn't seem to be biting at the current offer yet though, so - something is going to have to budge. I'm a BHP only holder, so I'm personally hoping they don't offer anymore (or very little), as we'd be overpaying then!  Which I'm sure you Rio Tinto holders would just love though


----------



## vishalt (8 December 2007)

Hope China bids for Rio and blows BHP's muscle out of the water, I don't want us to merge with Rio, the cultures and pipelines are so different and if you look at the biggest mergers in the past - bigger is not usually better!


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## vishalt (8 December 2007)

Wow, Rio has by far been one of the best big cap choices. 

India might bid for it now!!

A CONSORTIUM of Indian steel companies is being urged to join the bidding for Rio Tinto.



			
				smh said:
			
		

> An editorial in the influential Indian newspaper The Economic Times on Thursday advocated an Indian takeover of the mining giant backed by the Indian Government's growing reserves of foreign currency.
> 
> It proposed using a sovereign wealth fund being considered by the Government to help fund a consortium bid for Rio Tinto including the Indian producer Tata Steel.
> 
> ...


----------



## Fab (8 December 2007)

I would not bet on China or India buying RIO as the government will oppose it. BHP is your best bet but I don't think they will go much higher unless they are push to do so. I think the deadlock will have to be broken before Iron ore negociation at the beginning of the year


----------



## Kauri (10 December 2007)

Fact... or rumour... I guess all will be revealed in due course.. of course 
http://www.telegraph.co.uk/money/ma...GAVCBQWIV0?xml=/money/2007/12/10/cnrio110.xml 
Cheers
...........Kauri



> December 10:
> The UK Telegraph is reporting today that Blackstone is to join the battle for
> mining giant Rio Tinto. The report indicates that the consortium put together by
> Blackstone includes the China sovereign wealth fund.


----------



## DB008 (10 December 2007)

Cheers for the article Kauri.
 I suppose China's hunger for iron ore will continue for a while yet. Sort of a catch 66 for them. They are using so much iron ore, that they have driven the price up on themselves. 
Now with Private Equity set to join the battle over RIO. Other fund managers are talking of RIO s/p going to $180 in the next few months.


----------



## Kauri (11 December 2007)

Kauri said:


> Fact... or rumour... I guess all will be revealed in due course.. of course
> http://www.telegraph.co.uk/money/ma...GAVCBQWIV0?xml=/money/2007/12/10/cnrio110.xml
> 
> 
> ...




 From what I have managed to glean.... malarkey, bunkum,bollocks,.... i.e not on..
Cheers
........Kauri


----------



## lamot1 (11 December 2007)

Kauri said:


> From what I have managed to glean.... malarkey, bunkum,bollocks,.... i.e not on..
> Cheers
> ........Kauri




Hi Kauri, what makes you say this isn't likely?

With regards to the RIO announcement requesting a bid deadline from BHP, how far away is this deadline likely to be - days, weeks, months..?  

I was of the understanding that BHP, under UK stock exchange law once the merger proposal was announced, had 8 weeks in which to make a formal bid for RIO or walk away for a period of at least 6 months. Do I have my facts straight here?


----------



## Nyden (11 December 2007)

lamot1 said:


> Hi Kauri, what makes you say this isn't likely?
> 
> With regards to the RIO announcement requesting a bid deadline from BHP, how far away is this deadline likely to be - days, weeks, months..?
> 
> I was of the understanding that BHP, under UK stock exchange law once the merger proposal was announced, had 8 weeks in which to make a formal bid for RIO or walk away for a period of at least 6 months. Do I have my facts straight here?





I believe the deadline is one month after BHP made the formal announcement...but, I'm not sure on when that was!

As mentioned many times - The Australian government might not allow for a foreign entity to buy up one of our market-darlings, so I too doubt any of that will come to fruition.


----------



## vishalt (11 December 2007)

Hmm what I don't really get is why would Blackstone go after Rio? The sovereign Wealth Funds of China that what "supposedly" fund this deal can buy Blackstone like a fat man buying candy at a confectionery store... 

But then again UK Papers have a tendency to be overly wrong about takeover rumours (BHP for Alcoa, Advanced Bionics for CSL, Rio for Anglo American, Teck Cominfo for Zinifex, General Electric for Dow Jones to name a few  )



			
				AIR said:
			
		

> Another Rio Bid Fairytale
> December 11 2007 - Australasian Investment Review – (AIR)
> 
> Once again the credulous financial media in Britain is being used to float rumours about BHP Billiton and Rio that bear little resemblance to what has been going on in the real world.
> ...


----------



## 2020hindsight (29 December 2007)

just for the record 
here's RIO for the last 2 years (High Low Close) + averages 
Also RIO vs XAO for last 12 months (candlestix) + ditto (percent indicates relative preformance campared to datum of XAO)

PS I plan to do this to a few stocks - please feel free to either 
a) help out an divvy the job up between a few of us
b) suggest amendments to graphs
c) request some stocks you'd like me to post (maybe PM me)
d) tell me it's not necessary lol (or too wasteful of memory maybe?)


----------



## stockwhizben (20 January 2008)

hello, i keep saying to myself that its a no brainer and that with the bhp bid and rumours about about 3 and a bit shares and some cash in the offer as well that rio's price is undervalued. with the sp down quite significantly from previous highs, i would think that it should pick up again. evidence that my thinking is perhaps right on friday when rio up when most other stocks down. would anyone else agree that as far as picking stocks to go long in, that rio at the moment is as certain as it gets? 
was thinking too to make up for monster losses lately, to do a crazy thing and take out a large cfd long 200k on rio.
Any comments about this as well would be appreciated
cheers, ben


----------



## JimBob (20 January 2008)

There is a chance that BHP will walk away from the RIO takeover offer.  If that happens, then the RIO share price will most likely drop quite a bit.


----------



## 3MT (20 January 2008)

Stockwiz, you probably read in some trading book about not trading on emotion. Don't try and get even with the stock market because its done you wrong lately  and don't trade with money you can't afford to lose. 

Satisfying those 2 criterias, you ready to go then. 

The RIO bid for me is now looking almost unlikely to happen in the short 
term. tigthening credit market and increasing cost of credit, bad economic fundamentals depressing metal prices and the biggest downer, a falling BHP share price.

BHP was relying on its SP strength as a weapon. Back then at $45plus it was a potent weapon. 

For now anyway, the market has moved on (and I doubt RIO have reduced their expectations on what the right price should be). Regardless, BHP is now left with a situation where it needs to increase both script and cash(debt) substantially to succeed with this acquisition. 

Maybe the market was just desperate to inject some much needed good news in the last 10 days. A bid rumour does add spice to it.

So I guess a long on RIO is probably not the best move at the moment. Maybe after 6 months.

http://www.businessspectator.com.au...f-an-increased-bid-for-Rio-AZ5YB?OpenDocument


----------



## Kauri (20 January 2008)

An aussie bank was buying goodly amounts of AUD in the market Fri, *rumour* linked it to +ve AUD M/A activity... at the same time RIO puts on a spurt with vol (about $770mln traded for the day..) that takes it from a $110 opening to a close on its highs of $124 that suggests more than mums and dads are going in with their ears pinned back...       maybe...
Cheers
.........Kauri _of the pinned back ears variety.._


----------



## Captain_Chaza (20 January 2008)

RIO  was up nearly 7% in overnight trading in NY Friday night
BHP was up nearly 1%

Seems to me the deal is done or 
Could it be a blocking technique or 
The emergence of another Predator?

The Prey always moves higher than the Predator

Salute and Gods speed


----------



## Kauri (20 January 2008)

Captain_Chaza said:


> RIO was up nearly 7% in overnight trading in NY Friday night
> BHP was up nearly 1%
> 
> *Seems to me the deal is done or *
> ...




Hedge-funds,punters, Kennas and other associated peoples who might be in the know... possibly..
Cheers
.........Kauri


----------



## ithatheekret (20 January 2008)

I would think Kloppers would up the ante .

A lot of people think it's Wayne Swan who'll get the last say on the RIO takeover , I tend to think the decision will come from across the Atlantic , they own the most of it ..................


----------



## ithatheekret (20 January 2008)

I forgot to ask .

Do people realise what this takeover is all about ?

The way I see it Kloppers wants to become Mr.Coal , it's not about iron ore or anything else , it's coals . The cheapest available resource that there's plenty of , for a raging emerging market sector . Coal power .

Taking RIO will virtually give BHP a coal monopoly , that it can put to pressure on it's rivals or those that would aim to be .


----------



## tronic72 (21 January 2008)

WOW, I'm surprised there's no posts on the RIO forum. Has anyone seen the dozens of new articles about the BHP take over deal written in the last 24 hours. BHP are arranging finance to take over the Alcan loan from RIO.

It's a sign of the market that the share  goes up 5% on Friday and then down another 5% today for no real reason and yet the rumours mill is in over drive virtually saying it's about to happen. I topped up my RIO shares today.

Was I the only one?


----------



## shares (21 January 2008)

I picked some up as well, and as usual, as soon as my buy order went through, the price drops a $1 

Take a look at this ...

http://news.independent.co.uk/business/news/article3356225.ece

Quote: 

"Last week, analysts predicted that the offer may have to be as high as 3.8 BHP shares for each Rio share, in addition to a 30 per cent takeover premium."

_*If*_ the take over bid is just for 3.8 BHP Shares (at the current price of 34.24) for every 1 Rio share, the Rio share price may be at least $130.

I wish : 

But you would think the offer would be for more as the company rejected 3.58 BHP shares and $16.50 for each Rio share which would currently calculate to $138.22 per Rio share ...

Article about BHP arranging their finance:

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-22387391.htm


----------



## ithatheekret (21 January 2008)

tronic72 said:


> WOW, I'm surprised there's no posts on the RIO forum. Has anyone seen the dozens of new articles about the BHP take over deal written in the last 24 hours. BHP are arranging finance to take over the Alcan loan from RIO.
> 
> It's a sign of the market that the share  goes up 5% on Friday and then down another 5% today for no real reason and yet the rumours mill is in over drive virtually saying it's about to happen. I topped up my RIO shares today.
> 
> Was I the only one?





No I'm with you on them Tronic , have a holding from when Adam was a kid , pick some out at 118's the last week , thinking of doing it again as I sold the 150 I bought at 121.80 and I'm looking to buy that parcel back now the price has declined again . Many thanks to Kauri too , he's been spotting the moves in the FX , which I was pondering , but he clarified it , then the LSE confirmed it in price movement .


----------



## radar23 (21 January 2008)

Does something look wrong here?  After close someone is selling Rio shares at 10.5.....  Surely a mistake?


----------



## agro (7 February 2008)

just a note of observation

IAP of RIO is -$12 after nominating to oppose BHP's bid..

i wonder why this is esp when it rose in america to my understanding??

Shareholder disapproval?


----------



## tigerboi (7 February 2008)

*rio tinto finds 3bn tonnes of iron ore*

Rio tinto announced after the market closed of the discovery of 3bn tonnes

of iron ore,looks like bhp will have to go to 5/1 + now..rio looking good on 

open tomorrow..


----------



## dj_420 (7 February 2008)

radar23 said:


> Does something look wrong here?  After close someone is selling Rio shares at 10.5.....  Surely a mistake?




Prob no mistake, thats to make sure they get sold. It doesn't mean they would actually sell for 10.5, they would be matched up in pre auction.


----------



## mlevit (16 May 2008)

RIO opened at $155 today, its 52 week high. I've been holding since August last year and not too sure what to do with it these days.

1. Does anyone think BHP will attempt another bid for RIO, one that RIO will actually accept?
2. Since the resource boom in China is nearly at full steam ahead, are we expecting resource stocks like RIO to keep rising? or is $155 overpriced?


----------



## nizar (16 May 2008)

mlevit said:


> RIO opened at $155 today, its 52 week high. I've been holding since August last year and not too sure what to do with it these days.
> 
> 1. Does anyone think BHP will attempt another bid for RIO, one that RIO will actually accept?
> 2. Since the resource boom in China is nearly at full steam ahead, are we expecting resource stocks like RIO to keep rising? or is $155 overpriced?




Ive seen a few reports saying the next bid will be 3.8 BHP shares per RIO.
With BHP's share price at $50, that values RIO at a lot higher than $155. 

But the talk of a higher bid could just be rumours, still, when theres smoke theres fire.

But even at todays market price, RIO is trading at a discount to 3.4 BHP shares which was the original takeover bid.


----------



## njc.corp (17 May 2008)

mlevit said:


> RIO opened at $155 today, its 52 week high. I've been holding since August last year and not too sure what to do with it these days.
> 
> 1. Does anyone think BHP will attempt another bid for RIO, one that RIO will actually accept?
> 2. Since the resource boom in China is nearly at full steam ahead, are we expecting resource stocks like RIO to keep rising? or is $155 overpriced?




Mlevit-i can't advise u on what to do or when to buy or sell-

but when u bought in august-did u have a target of what u wanted the stock to go to?

has it been reached?-

thats how i operate-when i buy something-it has to have  a target or a good sale value-

Either good luck,and well done on buying in that time period-

Thanks

Nick--


----------



## Miner (23 June 2008)

*PATIENCE PAYS OFF *

China's Baosteel agrees 2008 iron ore term prices
SHANGHAI, June 23 (Reuters) - *China's largest steel maker Baosteel <600019.SS> has agreed to pay up to 96.5 percent more for its 2008 iron ore under a term contract with Australian miner Rio Tinto *(RIO.AX 


RIO TINTO23 June,200823/06/2008 23:15 Sydney, Australia. (REPORTED BY REUTER IN NINEMSN ) 
Value Change % Change 
137.580 -1.020 -0.740% 

Company overview
Real-time quote
RIO.AX , 137.580, -1.020, -0.740%), Baosteel said in a e-mailed statement on Monday.

Baosteel agreed to a 79.88 percent price rise of Pilbara blend fines and Yandicoogina fines, and a 96.5 percent price rise of Pilbara blend lump, the company said in the statement.


----------



## subaru69 (16 July 2008)

Apart from the recent volatility, I have a lot of trouble understanding RIO's SP lately.  I thought maybe it was overcooked at $135 but then the substantial increases in IO contracts came out which IMO should have at least maintained the SP.

Hopefully the Q2 results will pull things back up tomorrow, as I'm holding.

Assuming the BHP takeover goes ahead and BHP is ~$40, then that should value RIO @ $136 (3.4:1).

Is there something I'm totally missing?:bonk:


----------



## mshepherd (18 July 2008)

Maybe the take over isnt as likely as it once may have been. Rio released a very positive Q2 report, the more productive/profitable Rio is the more unlikely BHP will succeed in a hostile take over, hence drop in share price due to good report. BHP I beleive is due to release their Q2 report sometime soon.


----------



## oldblue (18 July 2008)

subaru69 said:


> Apart from the recent volatility, I have a lot of trouble understanding RIO's SP lately.  I thought maybe it was overcooked at $135 but then the substantial increases in IO contracts came out which IMO should have at least maintained the SP.
> 
> Hopefully the Q2 results will pull things back up tomorrow, as I'm holding.
> 
> ...




The biggest problem seems to be getting BHP to ~ $40 and holding it there!
We're dealing with a big bad bear market out there!


----------



## subaru69 (18 July 2008)

I was reading somewhere today (relatively reliable on net) that big brokers are advising dumping commodity stocks and then I read this:

'Just as investors have grown very negative about banks, there’s a looming possibility they are thinking the same way about resource stocks, despite continuing evidence to the contrary. A long view is needed, according to some analysts, to find value.' (Australasian Investment Review issue 208)

I know things aren't as simple as: RIO is digging up more stuff and selling it for more than before therefore the price should at least stay stable or heaven forbid go up.  Other factors such as priced in value, the big bad bear and predictions on future exports ie China slowing also play a part.

But the fact remains : more product, higher prices.

If BHP takeover doesn't occur then that should theoretically mean the RIO is valued at more than the takeover price NOT less. Or BHP got bored and didn't want RIO anymore :.

Aussie commodities (ie not oil) haven't had the speculative run that oil has had and the grow seems realistic to date, obviously we can't get doubling coal prices every year though.

The mentality of the market at the moment is making me mental or once again are I just missing something? I've noticed on a few threads (especially re POG) that some believe the world is doomed  (yes I know I've massively oversimplified the general sentiment) in the short to medium term.  

Finding a bottom and then some modest recovery, though not back to the levels of a year ago, would be nice .


----------



## oldblue (18 July 2008)

I don't think that we should assume that if the BHP t/o doesn't occur then RIO is " worth" more, not less.
There are a range of reasons why the t/o may not come to pass, from political ( out of a number of affected countries) to sheer cussedness or ego on the part of RIO management. I would think that it would be more likely that RIO SP would fall somewhat ( from P/E of around 18 ) if BHP is chased away.


----------



## vishalt (21 July 2008)

BHP can probably afford to go 3.8 to 4 for 1 on Rio Tinto. 

Rio is a great asset, I bought in again on Friday. Coal, uranium, aluminum, copper, lots of iron ore, great company.


----------



## Trader Paul (31 July 2008)

Hi folks,

RIO ... technically, the price action on 28072008 has confirmed 25072008, 
as a morning star pattern and working from a geo perspective, we can 
confirm 28082008 as another significant date. 

Here's our astroanalysis for RIO, over the next few months:

          11082008 ... significant and positive ... finance-related???

      13-14082008 ... 2 significant cycles and positive news expected here

           22082008 ... minor and positive lunar aspect

      28-29082008 ... 2 significant and conflicting time cycles, one 
                            positive and one negative = flat trading at a high ???

      03-05092008 ... significant and negative news expected here,
                            as 2 negative RIO cycles, come out to play

          29092008 ... 2 negative and one positive cycle, should focus
                           a negative spotlight on RIO, at New Moon

          06102008 ... minor and positive lunar aspect

     13-14102008 ... minor and positive cycle

          24102008 ... minor time cycle   

     29-30102008 ... minor and positive light on RIO

     07-10112008 ... minor and positive news expected

     17-18112008 ... significant and positive cycle - finance-related ???

     25-28112008 ... 3 time cycles to bring minor news

     15-16122008 ... 2 aspects to bring significant and positive news

          29122008 ... positive spotlight on RIO

     02-05012009 ... expecting a short and aggressive rally 

          07012009 ... minor news

     09-12012009 ... minor and positive ... finances ... ???

         15012009 ... minor news

         26012009 ... minor cycle

-----

After a strong start to February 2009, particularly around 02022009,
the next round of negative cycles should begin, about 11022009 ... 

More later

have a great day

  paul



=====


----------



## Garpal Gumnut (23 August 2008)

Trader Paul said:


> Hi folks,
> 
> RIO ... technically, the price action on 28072008 has confirmed 25072008,
> as a morning star pattern and working from a geo perspective, we can
> ...




Paul is predicting a negative Sept and a positive October for RIO, I believe.

I don't agree.

Any ideas? 

Enclosed a chart.

There seems to be a bounce at $110 , with previous support and resistance.

gg


----------



## Boggo (23 August 2008)

Just a quick  worth after a couple of reds :

There seems to be a lot of (mainly resource) stocks in potential wave 4 patterns at the moment.


----------



## Garpal Gumnut (23 August 2008)

Boggo said:


> Just a quick  worth after a couple of reds :
> 
> There seems to be a lot of (mainly resource) stocks in potential wave 4 patterns at the moment.




A very good observation Boggo, I reckon RIO would get heaps of support if it were to dip below $100, barring any major global catastrophe. Any other resource stocks you've noticed in this pattern ?

gg


----------



## shadow123 (3 September 2008)

looks like she is getting whipped today...

any big news out i dont know about?
surely drop in commodity prices couldnt do all that damage 

* spot on boggo


----------



## Seneca60BC (6 September 2008)

does that mean since RIO has breached 110, next resistance is 100 ?

Cheers
..................................................................................................
......................


----------



## Garpal Gumnut (6 September 2008)

Seneca60BC said:


> does that mean since RIO has breached 110, next resistance is 100 ?
> 
> Cheers
> ..................................................................................................
> ......................




Yep next support is $100. And then after that $80 then $65.

$87.50 could be another support as it was resistance on the way up. 

gg


----------



## Garpal Gumnut (27 September 2008)

I enclose a chart of RIO.

Its interesting there have been so few posts on RIO on the premier Australian Stock Forum recently.

Maybe the members feel it is not worth their time, its such a tiddler, and its under threat of takeover.

Its about $100 now, I predict a $200 price on expansion from the wave 3  before the end of this financial year. 

Then I'm just a mere Chartist.

On EW analysis its a goer.

gg


----------



## golfmos123 (28 September 2008)

GG - and I thought you were a RIO basher  $200 by next June would be nice indeed.  Some positive news on the takeover front would help stoke those fires too.

As indicated earlier in this thread, there must be a quite a number of resource companies in similar chart positions to this one.

At $100, I'm not sure that now is the time to buy - I'd be looking at either further falls and purchasing in low 90's, or waiting to see rises and looking at something just south of 110 with some fairly tight stops.


----------



## peter g (29 September 2008)

Rio is being hammered today $95.9 looks like it is about to go through a year long support level......All this with no announcemnt....is there any news that i have missed??


----------



## Garpal Gumnut (29 September 2008)

golfmos123 said:


> GG - and I thought you were a RIO basher  $200 by next June would be nice indeed.  Some positive news on the takeover front would help stoke those fires too.
> 
> As indicated earlier in this thread, there must be a quite a number of resource companies in similar chart positions to this one.
> 
> At $100, I'm not sure that now is the time to buy - I'd be looking at either further falls and purchasing in low 90's, or waiting to see rises and looking at something just south of 110 with some fairly tight stops.




Couldn't agree more golfmos123. It depends I guess on the reaction to the Wall St. bailout.

Some (Daily Telegraph UK ) are tipping a 33% fall in equities.

gg

gg


----------



## agro (1 October 2008)

ACCC not opposed to merger

look at live chart

just rocketed from 90 on that news

seems like it will hit 100 now, its not stopping


----------



## NightWolf (1 October 2008)

Didn’t make it too $100 today... Closed $5 below… I think if we see positive news from the states (if they actually vote on Thursday US time) on Friday we should see a bit of a spring back in most stocks, hopefully enough to bounce RIO over $100…


----------



## Garpal Gumnut (1 October 2008)

RIO is one stock I can see hitting $200 at some stage in the not too distant future. Its a takeover play, it is rich with good assets and it has good management, and there is even better of both in its predator. 

In the present circumstances BHP will have to sweeten the offer to get shareholders to agree, and this may not occur until the present credit crunch is over. 

Thus I see RIO continuing its upward course.

Todays recovery of 10% is one of the best in the market.

gg


----------



## NightWolf (2 October 2008)

Bit of a dive today... I think $200 is a bit optimistic... I think we will see $140-150... By the end of this month...


----------



## golfmos123 (2 October 2008)

NO matter how you slice and dice it, buying RIO under $100 is value if you are looking anywhere beyond a 2-3 month timeframe.

My earlier post was looking at low 90's entry, but I missed the chance to jump in in the mid 80s a couple of days ago.  It's a bummer when work takes you away from your computer!!  Picked up more today in low 90s and don't really expect it to fall much further.  Positive US news tonight will see oil up, commodities probably up and the world will look rosy again.

I think long term, RIO under $100 will look like one of the classic steals.......


----------



## eric35 (3 October 2008)

I bought RIO the other day at $94, intending to hold it. But boy, what a wild ride. That is one of my very few buys where I use intuition rather than charts. maybe I live to regret it, but I don't think so.


----------



## SM Junkie (3 October 2008)

Finally got into RIO today, just under $87 which I think is a good price.  It has been on my watchlist since it was $115, but it took off before I could get on board, so at this price, I thought it was a great pick up for the long term.  I'm hoping that:

1. Markets may look a little more positive next week if the bailout goes ahead.
2. We may see rate cuts here, which might uplift the mood even it the real costs are not passed down to the consumer.
3. And with BHP another step closer in it's takeover bid, favour may return to the stock.

And if none of this has any effect, well I'll just use it as an opportunity to buy more along the way.


----------



## Frank D (3 October 2008)

*Rio:-*  I'm bearish on resource stocks in the 4th Quarter.

I know where I'm Buying Rio.....

Resistance around 110.00.

downside target as shown, with probably  'Quarterly' bottoms sometime in November in the 4th Quarter.

Just my thoughts...


----------



## baja (7 October 2008)

this cant be too good for the SP with everything else going on, Chinas musings included.

Rios Pilbara train drivers to strike with further possible action.

http://business.theage.com.au/business/rios-pilbara-train-drivers-to-strike-20081007-4vhw.html


----------



## YOUNG_TRADER (16 October 2008)

hmmm here's something interesting

At $67 and BHP's 3.4 for 1 script offer, the implied cost/value price of BHP shares is $19

Arbitrage opp here or am I missing something?

Of course this assumes the merger goes ahead etc etc

Thoughts?


----------



## Warren Buffet II (16 October 2008)

YOUNG_TRADER said:


> hmmm here's something interesting
> 
> At $67 and BHP's 3.4 for 1 script offer, the implied cost/value price of BHP shares is $19
> 
> ...




I am sure that BHP is reconsidering the merger as the prices of commodities are dropping like a rock, China is slowing, US is in recession as EU, costs in AU keep going up and up with inflation getting close to 5% or more next year and debt being harder and harder to rise.

So what do you want, who wants that junk?

WBII


----------



## powerovdreams (19 October 2008)

Hey all,

I'm new to investing in the stock market and was wondering if anyone can predict how low rio tintos' shares will fall? Is it a good time to buy in now, or should I wait a bit longer. Please give me your opinions.


----------



## Joe Blow (19 October 2008)

powerovdreams said:


> Hey all,
> 
> I'm new to investing in the stock market and was wondering if anyone can predict how low rio tintos' shares will fall? Is it a good time to buy in now, or should I wait a bit longer. Please give me your opinions.




Hi powerovdreams,

Welcome to ASF!

Anyone's prediction about how low RIO's price will fall will be just a guess and you should not make important investment decisions on the basis of predictions by members of an internet forum.

Also, it is not legal for those on a forum such as ASF to offer you specific financial advice such as when to buy or sell particular stocks.

I would recommend you do as much of your own research as possible and if you are still in doubt about when (or if) to purchase RIO that you consult a licensed financial adviser about your situation.

All the best!


----------



## sammy84 (19 October 2008)

powerovdreams said:


> Hey all,
> 
> I'm new to investing in the stock market and was wondering if anyone can predict how low rio tintos' shares will fall? Is it a good time to buy in now, or should I wait a bit longer. Please give me your opinions.





Hey powerovdreams.

Now's probably not a good time to be guessing lows on any particular share as there is no common sense in the market. If your looking at RIO with a particularly long time frame then the price is looking cheap at the moment.  Might be good to look at the topic relating to whether the china boom is over in order to help work out if you want to buy in.


----------



## noirua (11 November 2008)

Rio Tinto are in a bid situation, that through the present share price, the market thinks will be dropped. Despite the different setup in the UK Rio Tinto the affects eventuate a ripple threw effect through the sterling equivalent. The reason I've added a few.


----------



## Miner (20 November 2008)

Woh !

The last person visited the RIO thread was 10th November. Why this share forum is not popular ? FMG and others are over inundated with posting 

Any way I noticed something very interesting after the market closed today at about 4.33 PM Sydney time.

The screen shots are given here

*Share Quote as at 4:33 PM Sydney Time, Thursday, 20 November 2008 Commsec Site *   RIO TINTO LIMITED FPO   
CommSec Margin Lending LVR: 70% 


Code	Bid	Offer	Last	Change*	% Change*	Open	High	Low	Volume	Trades	Value	News
RIO	57.240	57.300	57.250	-8.650	*-13.13*	61.200	61.380	56.030	5,085,742	16,382	302,570,596	 


  				Buy | Sell | Add to Watchlist | Research | Chart | Course of Sales 


				Trading Status: Pre Open

*Delayed share price (COPIED FROM ASX SITE AT WST 2.35 PM (MARKET CLOSED IN SYDNEY:  ON 20 Nov. 08) *Prices are delayed by at least 20 minutes. Retrieving any price indicates your acceptance of the Conditions.
Code
Last         % Chg    Bid        Offer      Open       High      Low         Vol 
57.500	-12.75%	70.150	43.900	61.200	61.380	56.030	4,748,817

*Differences are in percentage change, bid and offer values, volume of shares sold.* 

Even if considering ASX reports 20 minutes after actual sale the end price remained same and the report is 15 minutes after market was closed.

How come the offer price is so low accepted regardless the figures are not matching what quoted in ASX and Commsec site.

As per trading rules you can not put a target sell or buy too high or low figures
Any one can throw some light


----------



## skc (20 November 2008)

Miner said:


> How come the offer price is so low accepted regardless the figures are not matching what quoted in ASX and Commsec site.
> 
> As per trading rules you can not put a target sell or buy too high or low figures
> Any one can throw some light




It's all to do with ASX opening and closing auctions.


Mate, you are 1,000,001st person to ask this 
https://www.aussiestockforums.com/forums/showthread.php?t=11619


----------



## Miner (20 November 2008)

skc said:


> It's all to do with ASX opening and closing auctions.
> 
> 
> Mate, you are 1,000,001st person to ask this
> https://www.aussiestockforums.com/forums/showthread.php?t=11619




Thanks SKC for making me a millionaire for something even if in real money terms it is happening opposite 

The link was useful and educative. 

Regards


----------



## Miner (20 November 2008)

Nick Radge said:


> Here's how we saw it a week ago. The chart patterns were quite straightforward.
> 
> 
> 
> ...




Good stuff 

Let us see if RIO goes down further to give some buying opportunity

It also depends on DOW tonight


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## Family_Guy (21 November 2008)

Miner said:


> Let us see if RIO goes down further to give some buying opportunity




Gee.......and i thought $58 bucks was a bargin and went swimming with it today. I'm in, hope it bounces big time.


----------



## bluey (21 November 2008)

It's hit $54 today - when is this carnage going to end..

And my friend was telling me RIO is a bargain at $95 a couple of weeks back..

Given all the reports of how difficult it is conjure up funds/credit - surely there must be a point where the institutions come into play and start buying...


----------



## radar23 (25 November 2008)

BHP Drops Rio take over bid..  Rio's price on the FTSE has drop 40% from opening.  Will this cause the same free fall effect on the ASX RIO listed price.

Who knows...


----------



## eric35 (25 November 2008)

I imagine RIO will fall, while BHP will get a boost.

Maybe too late to go short in the morning (on RIO)

My opinion only


----------



## Prospector (25 November 2008)

RIO is currently down 36% in Britain.  This would seem to be your buying opportunity.  BHP up 6%. Market seems to like BHP's decision, well, BHP's market does.


----------



## Nick Radge (25 November 2008)

We were bearish, but that's a big move. Clearly the market was hoping BHP would help out with the debt. Here is our review from last night:



*BOTTOM LINE 
24/11:*
EW Trend: Corrective
Price Trend: Down
Trend Strength: Strong
Broker Consensus: Strong BUY  
*
TECHNICAL DISCUSSION *
*24/11:*
VIDEO ANALYSIS (2 mins 42 secs)
*LAYMANS:* The first target of $55.00 was met on Friday but there remains no evidence that a push higher is upon us just yet. Therefore we must continue to play the odds suggesting the larger trend will prevail and that $50.00, our second target, will come into play.  We will follow this smaller degree decline off the early November highs as the primary indicator of a reversal but in the interim we could slide below $50.00 if this current pattern traces out to its fullest. Only a move back above $70 would add some quiet bullish confidence but even so it will not be enough to turn the larger trend. A clear inhibitor to price action is the significant amount of debt RIO is carrying and its current inability to offload non-core assets. We don't need read too much into this nor predict when the market will be satisfied - its all written into the price action and ongoing patterns. When they change, then we will know.
*TECHNICAL:* The smaller degree wave-ii we discussed in the last review (see archived below) did transpire and so it is we're now impulsing lower in the wave-iii. The $70.00 is significant because it represents the lows of wave-i and therefore the point of invalidation, at least on this smaller degree pattern. This current 5-wave patterns stands within an intermediate degree wave-(v) which in turn stands within larger degree wave-3. After the completion of the two smaller patterns we will see a reasonable bounce, certainly one very tradable, but the larger degree pattern stays in play until $110.00 is surpassed. That's a big call in this environment which is why a lot of this RIO story is yet to unfold but a number of trading opportunities will be seen in the interim. $70.00 is the key level and we must stay bearish whilst prices stay below. 

*TRADING STRATEGY  
24/11:*
We're more than likely very close to seeing a moderate low point in general terms, although a slide into the $40.00 handle is still probable. I'm hesitant to look for selling opportunities here but also suggest we're not ready to try and pick a low point. There is minor bullish divergence on offer, but firstly not enough to get involved and secondly because we're exposed to BHP already. 


_
This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. _


----------



## DionM (25 November 2008)

Well a drop in RIO was expected when the takeover got canned - when BHP announced the plan, BHP went down, RIO went up.

Must admit - 40% is pretty extreme but in a jittery market that's what  happens I guess.

What was RIOs price before BHP's offer?  Around $100?

So using some simple maths:
- BHP recently hit 2/5 of it's peak ($20/$50)
- RIO therefore is due to hit 2/5 of it's peak prior to the offer ... e.g. $40 (2/5 of $100).

I'm not touching it with a big stick though ... I already have BHP and OZL (from ZFX days) and have suffered enough with those two.  I don't need a hat-trick.


----------



## Miner (25 November 2008)

DionM said:


> Well a drop in RIO was expected when the takeover got canned - when BHP announced the plan, BHP went down, RIO went up.
> 
> Must admit - 40% is pretty extreme but in a jittery market that's what  happens I guess.
> 
> ...




Well done 

I heard in ABC radio at 7 PM today (WA) that Rio shares have slumped by 49% and now FTSE records shows it is still down by 35%
That means tomorrow ASX the shares of RIO likely to be flogged and BHP will rise. There will be a mixed chain of reaction for those companies like MIN etc who largely depend on Rio as well

Want to sleep good night 
Rio Tinto PLC
Symbol: RIO

Alternative: GB0007188757
Quote
Last 	 1,587.00	 	
Intraday Chart

Intraday Chart

5 days	1 mth	1 yr	3 yrs	5 yrs	10 yrs
C*hange 	 -863.00
% Change 	 -35.22%*
Volume 	 37.56 Mil
Day's High 	 1,710.00
Day's Low 	 1,405.00
Open 	 1,620.00
Close 	 2,450.00
Bid 	 1,587.00	Bid size 	 NA
Ask 	 1,588.00	Ask size 	 NA
YTD High 	 7,167.00	YTD Low 	 1,958.00
Fundamental Data

P/E 	 3.60	 	Market Cap. 	 23.09 Bil
Earnings/Share 	 5.76	No. of Shares Out. 	 1.46 Bil
Dividend/Share 	 1.03	Exchange 	 London
Current Div. Yield 	 4.96		Stock Alerts
Prices in British pence
Other financial data in British pounds

Quotes Delayed 15 Minutes. Time of last update 11:19 London


----------



## drsmith (25 November 2008)

Up to the minute or possibly two. It could even be every 30 seconds.

http://finance.yahoo.com/q?s=RIO.L


----------



## noirua (25 November 2008)

Analysts views in the last 12 months on Rio Tinto:
http://markets.ft.com/tearsheets/analysis.asp?s=AU:RIO


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## noirua (26 November 2008)

Rio Tinto have plunged 37% in London on news of the dropping of the BHP Billiton bid.

Other stocks: Antofagasta -7%, BHP Billiton +7%, Anglo American +4%, Xstrata +3%, Vedanta -0.2%, BR World Mining IT -4% and Lonmin -2%.


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## Sean K (26 November 2008)

I anticipate it to be significantly oversold on the open and may finish off lows. Couldn't hang my hat on it, but a high likelihood imo.


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## amory (26 November 2008)

you know Kennas, that's exactly what I thought.  but ...

a) they seem to both be on a trading halt - no quotes BHP or RIO

b) these days our market often reacts in a very blase sophisticated manner:  it ignores the violent overnite fluctuations & sure it reacts ... but much more calmly than expected.

only guessing but would expect RIO .. once they let them trade again .. to open between 50 & 55  or slightly below & more or less stay there.  the "oversold" you refer to - vicinity 40???  worth watching out for.

FWIW


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## mattlaw (26 November 2008)

They both (BHP & RIO) start trading at 11am.

http://www.businessday.com.au/busin...s-trade-in-bhp-rio-delayed-20081126-6hnq.html

Cheers

Matt


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## Sean K (26 November 2008)

Yeah, I'm surprised the current match is $54 ish, I thought high $40s.

A few people might be thinking the same way and will buy on the smashing and sell the bounce, with it ending up in the middle. Maybe.


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## Sean K (26 November 2008)

Match now $44 so might be a good opportunity if you're game.

Or, it just keeps tanking!



Hope not for buy and hopers....


----------



## Nyden (26 November 2008)

kennas said:


> Match now $44 so might be a good opportunity if you're game.
> 
> Or, it just keeps tanking!
> 
> ...




Looks like it's going to open at 40 - just ouch. I might take a punt and buy a tiny piece :

This is really going to hurt holders


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## Sean K (26 November 2008)

I'm happy to get out at $43.10, only because I have to go out to dinner.

Good luck if you tried to catch the knife. 

It's paid for dinner, with a bottle of nice Grange.


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## Sean K (27 November 2008)

Could possibly be a little more bounce in the cat. Was 35% a justifiable fall? 

I suppose we'll have to wait and see.

That debt they're carrying around looks nasty now. eeeeek!


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## noirua (27 November 2008)

kennas said:


> Could possibly be a little more bounce in the cat. Was 35% a justifiable fall?
> 
> I suppose we'll have to wait and see.
> 
> That debt they're carrying around looks nasty now. eeeeek!



Whenever a bid is dropped people try to see if there is a problem not mentioned by the bidder.  High debt is a bad one, but could there be more.

Those American coal holdings were worth a fortune once, but priced in US$'s in America, they may now be a millstone around the neck of Rio.

Coal is only a lesser factor and BHP pulling out over debt, could mean Rio Tinto are in difficulties.

My guess, a deeply discounted rights issue and placing, unless Chinalco come to the rescue.

Enough of Rio as there is a more important vote taking place at compareshares. [size=+2]Aussie Stock Forums[/size] needs your vote at http://www.thebull.com.au/the_stockies/forums.html


----------



## Miner (27 November 2008)

noirua said:


> Whenever a bid is dropped people try to see if there is a problem not mentioned by the bidder.  High debt is a bad one, but could there be more.
> 
> 
> Enough of Rio as there is a more important vote taking place at compareshares. [size=+2]Aussie Stock Forums[/size] needs your vote at http://www.thebull.com.au/the_stockies/forums.html




IMO Rio must be having some serious hidden issues with their debt and assets which got multiplied with low commodity prices. This must have been seen by BHP which triggered the pull out and under confidentiality they will never say so. Interesting situation : two young CEO with lesser experience, global crisis and market expectation . If RIO goes down further I am eyeing on the large companies in St Georges Terrace who have been flexing their muscles on Rio's strength


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## Garpal Gumnut (27 November 2008)

* There are more things in heaven and earth, Horatio,
      Than are dreamt of in your philosophy.
          o Hamlet, scene v

I have sold all my holdings and am heavily bought now in RIO.

This chart illustrates an axis, below where RIO falls, we all fall.

gg


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## noirua (27 November 2008)

Garpal Gumnut said:


> * There are more things in heaven and earth, Horatio,
> Than are dreamt of in your philosophy.
> o Hamlet, scene v
> 
> ...



It looks like a tough and rough ride in Rio stock for quite some time.  I think it will feel, for stockholders, like a small mining stock diving around between adverse news and Chinese buyers being contemplated.

Just 7 days to go. Yes, to vote for Aussie Stock Forums at compareshares.  [size=+2]http://www.thebull.com.au/the_stockies/forums.html[/size]
http://www.thebull.com.au/the_stockies/forums.html


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## Miner (28 November 2008)

RIO seems to be going between frying fan to fire!!

$35 B net debt and now the rating down grading by credit rating agencies.

File size is more than 450 KB so please visit ASX site


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## Sean K (28 November 2008)

kennas said:


> Could possibly be a little more bounce in the cat. Was 35% a justifiable fall?
> 
> I suppose we'll have to wait and see.
> 
> That debt they're carrying around looks nasty now. eeeeek!



Still dead catting.

Nice little bounce but was a risky trade.

Just goes to show the seemingly fundamentals do not get in the way of a good trade.


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## noirua (2 December 2008)

The negatives on Rio Tinto are just too bad now, whether that be iron ore, coal or anything else. Coal is mainly in the States so even the places look negative.  Debts were too onerous for BHP and remain a worry. Cutbacks are set to be increasingly massive.


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## Naked shorts (2 December 2008)

I think it almost serves stuck-up RIO holders right. If they hadn't of keep telling BHP that their offers were "undervaluing" the company, they wouldn't be in this situation.


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## Kuri (2 December 2008)

Naked shorts said:


> I think it almost serves stuck-up RIO holders right. If they hadn't of keep telling BHP that their offers were "undervaluing" the company, they wouldn't be in this situation.




In defense of Rio Tinto holders we never got a chance to vote on the take over offer. The board of Rio rejected the offer but I can say for myself I was checking daily to see if the take over offer was going to go through so I could pick up my 3.4 BHP shares. 

Now I will never get that chance.


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## Naked shorts (2 December 2008)

Kuri said:


> In defense of Rio Tinto holders we never got a chance to vote on the take over offer. The board of Rio rejected the offer but I can say for myself I was checking daily to see if the take over offer was going to go through so I could pick up my 3.4 BHP shares.
> 
> Now I will never get that chance.




You are correct, as i just learnt a couple of minutes ago that the shareholders didn't even get a chance to vote. Just make sure you throw rotten tomatos at the board next annual meeting 

That's if you still want to hold those debt ridden shares....


----------



## Miner (3 December 2008)

Gees
what is wrong with RIO  and how far it can go really ?

RIO dipped at 35.8 or so and then moved up. Market slumped with a jerk start.

Commsec site appears to be crashing. Put an Internet order for RIO and still it is hanging and the price gone up to $36.35 and still my buy order is on the screen


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## drsmith (3 December 2008)

Did you pull that buy order or did you leave it there ?

I traded RIO in October when it was in the $80's but havent been game since.


----------



## GundamZeta (3 December 2008)

Miner said:


> Gees
> what is wrong with RIO  and how far it can go really ?
> 
> RIO dipped at 35.8 or so and then moved up. Market slumped with a jerk start.
> ...





i also wondering what happen to RIO while the market is rise and it drop over 8% today...

at the price $44 last week, i was thinking if it drop to $35 i may buy it to dilute my other $66 RIO shares.. but since now it drop so quick to reach $35.. i start thinking is RIO still a good buy now...


----------



## Miner (3 December 2008)

GundamZeta said:


> i also wondering what happen to RIO while the market is rise and it drop over 8% today...
> 
> at the price $44 last week, i was thinking if it drop to $35 i may buy it to dilute my other $66 RIO shares.. but since now it drop so quick to reach $35.. i start thinking is RIO still a good buy now...




Good perplexity is n't it ? I got the same feeling but I still hoping to buy RIO at the current price today but very nervous. Its up and down now more like FMG share behaviour. Commsec is ridiculously slow internet and phone system. 

The market behaves erratic than our imagination and we often get caught.

Phone order people just missing when you are waiting for so long.

I get to suspicious of this internet broker - they are coming of no use when really you want to act quick. May be they themselves are busy in placing orders for themselves with large buying power.


----------



## Kuri (3 December 2008)

Naked shorts said:


> You are correct, as i just learnt a couple of minutes ago that the shareholders didn't even get a chance to vote. Just make sure you throw rotten tomatos at the board next annual meeting
> 
> That's if you still want to hold those debt ridden shares....




I decided to cut my losses at got out at $44 the day after the deal fell through. Due to its high debt and lower margins I thought it would get dragged down further and it has. I will look at putting the money not back into a cheaper Rio but into BHO after it drops back down to $20 (fingers crossed).


----------



## drsmith (3 December 2008)

I'm wondering how long it will be before the share price of BHP is higher than the share price of RIO.


----------



## Boggo (4 December 2008)

drsmith said:


> I'm wondering how long it will be before the share price of BHP is higher than the share price of RIO.




Well if BHP can stay above $25 then probably early next week !!

RIO could be heading for the $25 area, just my


----------



## CoffeeKing (4 December 2008)

drsmith said:


> I'm wondering how long it will be before the share price of BHP is higher than the share price of RIO.




How will the market react to that, how long since that type of event has happened, some of the guys I work with are ex rio and keep in contact with mates over there, mates reckon the stock piles are getting quite big at the ports, slow or no sales maybe!


----------



## GundamZeta (4 December 2008)

CoffeeKing said:


> How will the market react to that, how long since that type of event has happened, some of the guys I work with are ex rio and keep in contact with mates over there, mates reckon the stock piles are getting quite big at the ports, slow or no sales maybe!




everyone is jumping boat....drop to $33.xx... i lost 50% on it already...when will it jump back........................


----------



## SoBadAtTrading (4 December 2008)

GundamZeta said:


> everyone is jumping boat....drop to $33.xx... i lost 50% on it already...when will it jump back........................




Rumours of a 3 for 1 rights issue could be pushing it down i think. At this stage, the next support level is $30.


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## noirua (4 December 2008)

Citigroup has upgraded Rio Tinto, the third largest mining group, to buy from hold. Citigroup's target price equates to AU$61 a share (allow for this being the London arm of Rio which is a slightly different setup.)
Citing from the London Evening Standard 3rd Dec 2008, under the Business  "PORTFOLIO" heading.


----------



## my03 (4 December 2008)

gees, rio is getting hammered! are these bargins shares at its current price or should they be avoided like a plague? will there ever gain any ground again?


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## YELNATS (4 December 2008)

At today's prices RIO looks very good value if you're looking at a 2-3 years hold or longer. 

I think many investors would look at this company this way, but most are keeping to the sidelines until they see any evidence that they have bottomed, or are close to it.

Based on current trends RIO may be as low as $25 and well under BHP's price before Christmas. 

BHP currently seems the better investment, certainly over the short to medium term.

Not trying to downramp RIO (I hold both RIO & BHP), just my observation, FWIW.


----------



## mobcat (5 December 2008)

*Re: RIO,s 42 Billion of debt and what comes next ?????*

I am so lucky to of had a stop loss on a huge parcel of RIO at $120 that i had held for just on five years but i still held the original $50k worth when i sold (silly me ) but i have moved on after five years and sold the lot at $35 after getting a whisper about whats about in the press ATM this is so sad to see but in the days of when debt was good looks like RIO is about to really get the message of what debt really costs 

Dec. 4 (Bloomberg) -- Rio Tinto Group, the world’s third- largest mining company, slumped to the lowest price in more than four years in Sydney trading on concern it may have difficulty refinancing debt due next year.

Rio Tinto, traded in Sydney and London, fell 12 percent to A$32.50 at the 4:10 p.m. Sydney time close on the Australian stock exchange. That’s its lowest level since May 17, 2004. It plunged 10 percent in London yesterday.

BHP Billiton Ltd. scrapped its bid for Rio Tinto on Nov. 25, citing turmoil in global markets, slumping demand for commodities and Rio’s $42.1 billion of debt. Rio’s debt levels prompted Moody’s Investors Service to review its rating on $5 billion of Rio’s debt on Nov. 26.

“All the focus seems to be about the bullet payment of $9 billion due next year,” said Tim Schroeder, who helps manage A$1.6 billion at Pengana in Melbourne, including both BHP and Rio. “It’s not a disaster but it is a lot more precarious than it was six months ago. I’m sure Rio are working feverishly at addressing that debt at this point.”

Rio’s Chairman Paul Skinner said Nov. 26 he was confident the debt position was manageable. The company still has undrawn credit facilities, he said.

“We don’t comment on movements in the market,” Amanda Buckley, a spokeswoman for London-based Rio, said by phone from Melbourne today. She wouldn’t comment on Rio’s debt situation.

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net 

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.qY1C_p43j0


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## Miner (5 December 2008)

I looked back RIO thread and the postings made  only less than couple of weeks by Kennas on 24 / 25 Nov and Garpal on 26 Nov and few others.

IMO both these guys proved they are  real smarts (I am not so rejoice their legacy). 

When Garpal posted his chart he did mention about RIO going down and unforunately that is happening.

Smart Kennas sold RIO at $43.5 so that he did not go late for dinner. What a prediction guys you have earned lovely dinner any way considering RIO is constantly tanking down without a stop sign (who checks RIO's driving license).

I hope in ASF we are allowed to appreciate the fellow participants for their good job to keep the spirit up in a sinking market


----------



## Boggo (5 December 2008)

Boggo said:


> Well if BHP can stay above $25 then probably early next week !!
> 
> RIO could be heading for the $25 area, just my




RIO is now below BHP in London !!
I thought it would happen eventually, just did'nt expect it this week.

Will be interesting on the ASX tomorrow.


----------



## noirua (5 December 2008)

The Rio Tinto in the UK is different to the UK version and often pays a different dividend and rarely comes into line on price.
Mining sector weak in UK, opportunity to buy, maybe, this morning on ASX at depressed price.


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## Garpal Gumnut (5 December 2008)

Miner said:


> I looked back RIO thread and the postings made  only less than couple of weeks by Kennas on 24 / 25 Nov and Garpal on 26 Nov and few others.
> 
> IMO both these guys proved they are  real smarts (I am not so rejoice their legacy).
> 
> ...




I'm down big time on RIO and hurting.



Advice to gg (self)

always follow your own advice gg

repeat that 100 times in front of a mirror gg

always have a stop gg

don't fall in love with a stock gg.

cut your losses , let your winners run gg

gg


----------



## white_crane (6 December 2008)

Anyone else think that RIO is about to go up (even if only for a short time)?

It closed higher than the open on good volume.


----------



## banska bystrica (6 December 2008)

I took a RIO $40 call option with a 29/1 expiry at a tick over $2 on Friday for a pork chop. BHP and RIO should have a Christmas/New Year rally.


----------



## |rockefeller| (6 December 2008)

Although Rio's share price is almost the same as BHP, I personally think you cant go wrong this company long term.


----------



## Glen48 (6 December 2008)

In the Gladstone papers there is a story about RIO closing up shop due to the price of Al. I am backing them down due to the debt....yet BHP is going down as well and they are suppose to be cashed up????


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## cutz (6 December 2008)

banska bystrica said:


> I took a RIO $40 call option with a 29/1 expiry at a tick over $2 on Friday for a pork chop. BHP and RIO should have a Christmas/New Year rally.




On the topic of RIO options, those Jan 25 puts are also looking pretty tasty
On the short side of course.


----------



## noirua (7 December 2008)

cutz said:


> On the topic of RIO options, those Jan 25 puts are also looking pretty tasty
> On the short side of course.



Rio Tinto still have to explain what is going to happen with their US coal holdings, once valued at US$11 billion.  These were due to be sold to play down debt.


----------



## mfp (7 December 2008)

white_crane said:


> Anyone else think that RIO is about to go up (even if only for a short time)?
> 
> It closed higher than the open on good volume.




I bought 1800 units @ $30 Friday. You may have noticed it initially rebounded to $30.80, then retested $30 before hitting $33.39 and closing at $32 on good volume. That's pretty convincing price action, for at least a short run anyway (and possibly a lot more), and considering the reversal on the DOW from -260 to +260 on catastrophic employment numbers, things are looking good for Monday and maybe for the week. RIO was also up 7% in the US.


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## Sean K (9 December 2008)

mfp said:


> I bought 1800 units @ $30 Friday. You may have noticed it initially rebounded to $30.80, then retested $30 before hitting $33.39 and closing at $32 on good volume. That's pretty convincing price action, for at least a short run anyway (and possibly a lot more), and considering the reversal on the DOW from -260 to +260 on catastrophic employment numbers, things are looking good for Monday and maybe for the week. RIO was also up 7% in the US.



Nice work.

Does seem a little oversold on long term chart. 

Looks pretty crap fundamentally but the market might have overshot for now.


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## Hank Moody (9 December 2008)

mfp said:


> I bought 1800 units @ $30 Friday. You may have noticed it initially rebounded to $30.80, then retested $30 before hitting $33.39 and closing at $32 on good volume. That's pretty convincing price action, for at least a short run anyway (and possibly a lot more), and considering the reversal on the DOW from -260 to +260 on catastrophic employment numbers, things are looking good for Monday and maybe for the week. RIO was also up 7% in the US.




I bought 320 units at $31, hoping to sell at $36, i dont think they are going to bounce back for too long

I cant imagine them staying that high for long though


----------



## Naked shorts (10 December 2008)

Hank Moody said:


> I cant imagine them staying that high for long though




............and what makes you think that?

Saying that doesnt provide anyone with any useful information.


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## radar23 (10 December 2008)

http://www.theaustralian.news.com.au/business/story/0,28124,24780826-643,00.html

Rio to axe 14000 jobs world wide.  

The key decisions are: 
• Reduction in controllable operating costs by at least $2.5 billion per annum in 2010;
• Reduction in global headcount of 14,000 roles (8,500 contractor and 5,500 employee roles);
• Consolidation of offices around the Group, including in London; 
• Rapid acceleration of outsourcing and offshoring of IS&T and procurement;
• Capital expenditure to be reduced to $4 billion in 2009 and towards sustaining capex levels in 2010, unless market conditions improve;
• An expanded scope of assets targeted for divestment, including significant assets not previously highlighted for sale.


Maybe they are worth a buy now with all this cost cutting.  I personally am concerned for all the redundancies.

thanks


----------



## Aussiejeff (10 December 2008)

------------------

**LATE NEWS FLASH**

After market close today, *RIO announces it is going to slash 14,000 jobs (8,500 contractor and 5,500 employee roles) and a swag of projects in an attempt to cut $10Billion of debt by end of 2009*.

*Dividend to be held at 2007 level of 136 cents with no prospect of growth in 2009*.

-------------------

RIO went up nicely today before that bombshell.

Any ideas where to now? Any thoughts on how this mass un-employment for at least 12-18 months might primarily affect WA economy and WA mining towns (as well as others)?

Doesn't sound good to me. But what would I know? SP might BOOM as a result 


(I don't hold)

aj


----------



## waz (10 December 2008)

Have a look at the 5 page pdf they have put out.

On the last slide there is a nifty table showing how a 10%+/- price change will change its underlying earnings for 2008.

If anyone can decode this, let us know if you think it makes sense. Its funny how it doesnt say if the impact is negative or positive.
The other factor besides price is the volume.

The table doesn't make sense. I think someone has copied and pasted out of Excel incorrectly in a rush to get it out before London opening.

Am I right in assuming the 201.69c/dmtu price for iron ore is US dollars?


----------



## white_crane (10 December 2008)

I think it will be seen favourably.
Debt reduction  and the fact that the dividend will be at least the same as last year, in spite of all the gloom, are positive news I think.

Find out tomorrow.


----------



## michael_selway (10 December 2008)

white_crane said:


> I think it will be seen favourably.
> Debt reduction  and the fact that the dividend will be at least the same as last year, in spite of all the gloom, are positive news I think.
> 
> Find out tomorrow.




Yeah I agree, and sounds liek a good business plan put into action, esp in these tough times

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 653.9 1,284.6 988.4 1,053.2 
DPS 154.3 198.7 283.1 288.0 *








> Date: 9/12/2008
> Author: Joel Gibson
> Source: The Sydney Morning Herald --- Page: Online
> The Australian Government's native title working group has recommended thatmining companies be provided with tax incentives for investing in indigenouscommunities. Tax breaks would also be available for investing in infrastructurein remote parts of the country, as well as venture capital firms which providefinancial support for indigenous business enterprises




thx

MS


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## Garpal Gumnut (10 December 2008)

michael_selway said:


> Yeah I agree, and sounds liek a good business plan put into action, esp in these tough times
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




The chart still looks pretty crap though.

Layoffs and native title lipservice are small bikkies.

the Chinese are the main game, apart from the lousy chart of course.

gg


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## Miner (11 December 2008)

Another knee jerk reaction.
It is the contractors who do the work for Rio
Many ex employees became contractors in Rio to earn more money of course but to deliver.

That is why many white elephant managers, top heavy non performers still winding with bull strategies etc. 

So those non performers will deliver now !!!! 

Well let us see what comes out even with some good rise today in RIO

PS I do not hold


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## noirua (11 December 2008)

Rio Tinto trade up 16.5% in London today.

Mining giant Rio Tinto is to axe 14,000 jobs in an attempt to slash operating costs and debt.

The company, which has iron ore operations in Australia is to cut spending on projects from US$9 billion to US$4 billion next year.

Rio blames sharp falls in commodity prices due to the global economic slowdown.  It aims to slash US$10 billion from its US$38.9 billion debts by the end of 2009.

Rio said contractors will make up 8,500 of the 14,000 jobs due to be cut but  did not provide details on locations for the redundancies.

The group became the world's biggest aluminium producer following the acquisition of Alcan last year.

Rio Tinto's Chief Executive Tom Albanese said the company's focus in the current climate is on maximizing cash generation and paying down debt.

Rio said it plans to hold its 2008 dividend at last year's level, while it will also consider the sale of assets not previously targeted for divestment.


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## Aussiejeff (11 December 2008)

noirua said:


> Rio Tinto trade up 16.5% in London today.
> 
> Mining giant Rio Tinto is to axe 14,000 jobs in an attempt to slash operating costs and debt.
> 
> ...




At first glance, the announcement has seen a very positive response overnight with a 20%+ surge in RIO's SP on international markets (GOOD for the relative few who hold RIO shares). Unfortunately, there will undoubtedly be some "hidden" and very serious collateral damage done to various economies as a result of RIO's announcement (BAD for everyone affected).

This is because there are an awful lot of small, medium & even large service, ancilliary and component supplier companies associated with RIO's current level of operations (even small town and settlement's economies) that are going to suffer extremely badly or in many cases go under, as a result of these mass layoffs and sharp cutbacks in Rio's production & development over an extended period. RIO is only looking as far forward as end 2009. If China wallows into 2010-2011 the ramifications are going to be far worse.

So the 14,000 job cuts for workers directly associated with RIO may actually cause a knock-on unemployment number at least twice that, throughout affected local economies as other associated businesses (pubs, clubs, delis, grocers - you name it) are also forced to tighten up or fold. I can understand why RIO shareholders might be smiling today (I'm not a holder) but I'm cringing at that likely knock-on effect to many economies and the insidious prospect of far greater unemployment in affected areas than the immediate 14,000 that Rio quotes.

There's 2 sides to every story....

So I'll wish Good Xmas Luck to RIO share holders today. 


aj


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## Sean K (11 December 2008)

Aussiejeff said:


> At first glance, the announcement has seen a very positive response overnight with a 20%+ surge in Rio's SP on international markets
> aj



aj, might depend to some degree where these jobs are being lost. 14,000 people in Africa or South America, then it's a drop in the bucket. 14K from central Perth a bigger drop in a smaller bucket. And remember, those bodies are probably on contracts extending out some time so will still have some cash flowing, and time to move back to Melbs and their taxi or garbage run. I'm probably underestimating the effect of course.


----------



## noirua (11 December 2008)

Perhaps the opening is here for a Chinese company or companies, to pick the right point to substantially raise or take a stake in Rio.

China may want to block the likes of BHP Billiton from ever making another pitch for Rio Tinto. 
With the Aussie economy looking weak and China looking as if it may take the opportunity of taking a chunk of Australia, Kevin Rudd & Co are likely to become willing partners in this, the easier way out.

China may well then become keener in taking all their iron ore supplies from Australia and thereby safeguarding the industry and jobs in WA.


----------



## Aussiejeff (11 December 2008)

noirua said:


> Perhaps the opening is here for a Chinese company or companies, to pick the right point to substantially raise or take a stake in Rio.
> 
> China may want to block the likes of BHP Billiton from ever making another pitch for Rio Tinto.
> With the Aussie economy looking weak and China looking as if it may take the opportunity of taking a chunk of Australia, Kevin Rudd & Co are likely to become willing partners in this, the easier way out.
> ...




Accordingly, I think it is time Ms Gohard re-jigged the school curriculi to include new compulsory Chinese Language Studies for EVERY student. 

Xie xie.


----------



## jono_oz (11 December 2008)

I totally agree with the compulsory Mandarin for kids - we might as well adjust to the Chinese takeover of our companies quickly! 

I am also perplexed as to why RIO is only up 7% on the ASX Vs 20% on the FTSE and the DOW?? 

But then again I am also confused about why the XAO is now 800 points behind the FTSE, and 15% behind the DOW? I stupidly thought that we had the better economy and the stronger banks, and the lower unemployment and a government, at least partially in surplus for the moment. Go figure!!


----------



## TheAbyss (11 December 2008)

I do not understand why RIO is up at all. Surely the news will only get worse for RIO before it gets better? Only positive i can see is a take over offer otherwise the reality of a discounted SPP.

Sure they have announced savings via job cuts etc but they have that same amount of debt committment via Alcan next year alone ($US10b).

Either Rio cuts costs via reduced capital and operational expenditure and sell some assets or a share issue is on the cards. I cant understand why the price has jumped so quickly but i am no analyst either.

What if Rio cant sell the assets at a reasonable price due to the downturn? Then they need money to pay debt. Where does that come from? SPP, to institutional or private or a mix but either way it will be at a discount to the prevailng SP.

That or they will need to do something else with the $US38 billion debt load that Rio took on when it bought Alcan.

Why the rally? Wish i got some yesterday to sell today. Either way Rio will be around long after i am gone but short term i think they have to get cheaper yet.


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## banska bystrica (11 December 2008)

banska bystrica said:


> I took a RIO $40 call option with a 29/1 expiry at a tick over $2 on Friday for a pork chop. BHP and RIO should have a Christmas/New Year rally.




That was money for jam. Haven't closed it out either. Panic creates opportunities and I was only too pleased to buy that $40 call.


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## white_crane (12 December 2008)

Put in my sell order last night and it filled at the open (20% raw return).  I'm thinking that it's going to go down further than the last low.  If it bounces off $30 again with good volume, it might be worth another punt.


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## cutz (13 December 2008)

For all you techies out there is $30 a fair level of long term support on RIO? looking at volume at that level it seemed to be unusually high also a couple of indicators I use are turning up (MACD Daily).

MACD weekly is still in decline but I guess that may take a while to catch up.

Any thoughts.

(Apologies for sounding simplistic but I’m fairing green when it comes to charting.)


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## Sean K (13 December 2008)

cutz said:
			
		

> For all you techies out there is $30 a fair level of long term support on RIO?



Yes, see post on the last page here:

https://www.aussiestockforums.com/forums/showpost.php?p=370545&postcount=269


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## noirua (13 December 2008)

Rio Tinto may find the only assets reasonably priced are the ones they don't want to sell.
It looks as if they're lining up the coal companies to sell, as suggested in the press, but these may be worth only 20% of the price last May.
Between the rock and a coalface may not be much pay dirt.

Big saver is to shutdown every one of the difficult iron ore and coalmines and sack most of the workers. Watch Rio back out of near every development going.


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## Sean K (13 December 2008)

Could RIO fail?

The first MAJOR miner to fall into the abyss?

Is their debt too great, and fall in demand and prices too swift?


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## amory (13 December 2008)

purely on T/A ... looking at a number of charts ... they've suffered a severe selloff for many weeks & now showing the odd buy-signal ... Macd, stochastic, countback-lines ... but the Coppock which would show safe entry into a new trend, no happiness there & the various oscillators not as yet showing signs of life.

unlikely to move against the market ... BHP & the XAO in particular ... for the time being.  put it this way:  they look comfortable where they are now, unless overall bearish sentiment sets in again.


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## noirua (14 December 2008)

kennas said:


> Could RIO fail?
> 
> The first MAJOR miner to fall into the abyss?
> 
> Is their debt too great, and fall in demand and prices too swift?



Perhaps the words of Dr Marc Mobius of Templeton Asset Management, a few days ago holds the answer, "...are we heading for a deeper collapse or a turnaround?"
He was referring to Asian countries who he says will be hit the hardest.


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## AS414 (15 December 2008)

Rio got some coverage in the Economist this week, lumped in with other 5 very large materials and mining multinationals who look pretty overextended from expansion commitments.  I have discussed this further here:

http://internationalbs.wordpress.co...ionalbs.wordpress.com/2008/...-in-a-downturn/


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## AS414 (16 December 2008)

The link appears to be playing up.  It should be:
http://internationalbs.wordpress.com/2008/12/14/chasing-synergies-in-a-downturn/


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## Tukker (6 January 2009)

Rio jumps 8% on no news and not a single post about it. Ill be the first then.  Although I am not a holder, i am curious to see how rio handles its current situation. Lots of debt, M&A commitments, weak commodity prices, global slowdown, not a lot going well for Rio atm.  

Chart is at a point where in my opinion share price can go either way. Not impressive volumes to substantiate a trend, but the gradual growth of the sp over the last 6 days with the 8% jump yesterday speaks contrary.  I'm skeptical tho, with news coming out this week on US job and retail sales i think the whole market is going to get jittery again, so im forced to side with a short on Rio later on this week if not today.


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## Tukker (7 January 2009)

lol do yourselves a favor, and don't listen to what i say.  No matter what kind of conditions i trade under, i always get it wrong, thank god for TA and stops.


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## michael_selway (7 January 2009)

Tukker said:


> Rio jumps 8% on no news and not a single post about it. Ill be the first then.  Although I am not a holder, i am curious to see how rio handles its current situation. Lots of debt, M&A commitments, weak commodity prices, global slowdown, not a lot going well for Rio atm.
> 
> Chart is at a point where in my opinion share price can go either way. Not impressive volumes to substantiate a trend, but the gradual growth of the sp over the last 6 days with the 8% jump yesterday speaks contrary.  I'm skeptical tho, with news coming out this week on US job and retail sales i think the whole market is going to get jittery again, so im forced to side with a short on Rio later on this week if not today.




yeah interesting two days for RIO!

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 653.9 1,195.4 787.0 870.3 
DPS 154.3 198.9 198.9 201.9* 

thx

MS


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## Miner (16 January 2009)

I noticed that the thread on RIO has been rather quiet for last 8 days compared to many low profile stocks are heavily discussed. Even if Paul Skinner removal put little effect. 

Irony of the situation is that although many senior managers and junior managers have been asked to get out of the door for poor performance recently,stop projects etc the real culprits are given time to enjoy the bonus and four months to look for a job. End of the day Mr Skinner will get out of the door with some $30 M or more. No one has said any thing against Tom (CEO) though these are the people should get out of the door for their billion dollars mistake affecting not only Rio employees  but depending businesses and the country 

Market has reacted positively with the new incumbent coming to replace Mr Skinner . Now should the market react positively. He is a Tata Steel man. Well tecnically that is true because Corus (British Steel) was taken over by Tata Steel. He became Chairman as a part of the deal and was desperate to get out as Tata in the process of consolidating Corus Steel as a part of Tata Steel. So cost efficiency to see Mr Glen to go. Further under the stewardship of Mr Glen British Steel has been performing not so well giving Tatas to acquire them. Traditionally Tata Steel and Rio never liked each other in real term and Tatas did everything to see Rio does not enter into India in a big way and aligned with Posco. It will be therefore interesting to see how Rio will do any better just changing the Chairman. What synergy does the new Chairman brings just being stationed in London nearer to Rio office with no raw materials experience ! 

Time will tell of course and if Rio turns over great - that will help economy as well as share holder confidence. If it turns over in two years time as Tom asked then it is no credit for these two top guys but normal economics where depression is always followed by an inflation : Mr Keynes please come back from 1930 or Mr Paul Samuelson (famous economist) return to the field to help us .


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## vincent191 (16 January 2009)

Maybe RIO wants to take up a position in India. It is the next mega emerging market (I think). That's why they choose someone from Tata who is familiar with the Indian steel making market.


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## Miner (16 January 2009)

vincent191 said:


> Maybe RIO wants to take up a position in India. It is the next mega emerging market (I think). That's why they choose someone from Tata who is familiar with the Indian steel making market.




I am pretty sure the gentleman from British Steel . Corus now Tata Steel has as little knowledge on Indian market. He has never worked in India and became Dy Chairman because of massive take over by tata steel in Jaguar, Corus (also see RIV they are a major share holders).

Please also keep in mind Tata Steel shares have gone down to INR 200 about from INR 850 (rough figures order of magnitude) like any other companies.

We should be wary of Indian companies now : Satyam IT has become an enron and National Bank and others IT are badly affected due to this company's collapse.


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## CoffeeKing (16 January 2009)

Found this from another link in the forum...

Rio rocked by metal meltdown

http://www.news.com.au/business/story/0,27753,24919886-462,00.html

Lot of money being lost maybe from low metal prices, alum seems one


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## Tukker (30 January 2009)

Can Someone please tell me the highest high for today 30th Jan?  I got stopped out at 42.83, and neither of my broker platforms show it going higher than 41.53

Appreciate it.


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## Tukker (30 January 2009)

Well i got stopped out in the last 3 mins of trading when someone dropped a few million into Rio and bought out the entire lower half board.  What good are end of day systems in times like these?..... My 10th stop out in a row now with some crazy slippage....  *Rubs Behind*  when will it end


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## noirua (30 January 2009)

RIO are still plugging away at selling assets to play down debt and should be admired for keeping their word without excuses. 
Getting away the Corumba iron ore assets for US$1.6 billion to Vale may be better than it looks when the RIO share price fall is compared.
Worth watching events here.


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## Tukker (5 February 2009)

I got a short signal from 2 of my systems today for RIO, and it's up 10% in London , considering my trading systems have stopped me out every time for the past 2 weeks I'm guessing this is very good news for Rio holders 

When are Rio's financial s comming out?


Tukker


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## Garpal Gumnut (8 February 2009)

RIO seems to have been giving some very good signals on a 15d simple moving average and is now trending up.

Interesting times.

gg


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## noirua (8 February 2009)

Garpal Gumnut said:


> RIO seems to have been giving some very good signals on a 15d simple moving average and is now trending up.
> 
> Interesting times.
> 
> gg



Quite a powerful move by RIO and may give some a chance to bailout in coming weeks. Would take a lot to reach that $65 - $85 trading range, that came after a previous long downturn.
Still interesting to watch with the Chinese never that far away from the action.


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## vincent191 (11 February 2009)

I don't understand why ROI is selling assets instead of a rights issue to pay down debt.

ROI claims it is selling "underperforming assets" but are the Chinese stupid to buy underperforming assets??

How can shareholders know that ROI is not selling it's good assets at give away prices? What is under performing may become performance stars when the markets recover.

At least with a rights issue shareholders will suffer a dilution but they are given the opportunity to buy-in at a discount.

The only reason I can see is an asset sale will not necessary drop the share price and therefore will not effect the bonus calaculations as much as a rights issue.

Am I way off the mark with my assumptions???


----------



## noirua (11 February 2009)

vincent191 said:


> I don't understand why ROI is selling assets instead of a rights issue to pay down debt.
> 
> ROI claims it is selling "underperforming assets" but are the Chinese stupid to buy underperforming assets??
> 
> ...



They may have to talk to major holders about a rights issue and get their agreement, as they may not have the cash.  Xstrata are having big problems over their rights issue.


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## oldblue (11 February 2009)

Obviously the Chairman-elect shared some of these concerns and in the end decided to walk so that the rest of the board could get on with things.
I guess we'll never know what would have been the best course of action.


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## vincent191 (11 February 2009)

Noiru....that is why we have underwriters, in case the institutions don't take up the entire rights issue the underwriters will have to fill in the "void".

Oldblue....i guess you are right...we will never know. But the newspapers are still talking about a possible rights issue.


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## drsmith (11 February 2009)

One potential problem with a rights issue could be the scale required for a long term solution to RIO's debt. $5bn or so may only not be enough in the long haul.

Press speculation suggests any assets/equity deal with Chinalco could be worth around $30bn.


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## oldblue (11 February 2009)

Not just the size of any issue is in question but also the degree of discount needed to " get it away".
Underwriters should be able to be found but the fee involved may be pretty steep, particularly if the issue price is too finely priced.

Who was it said " Life wasn't meant to be easy" ?


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## andione1983 (11 February 2009)

i got  few grand a month or so ago at $38 a share, what should i do? sell up at 50???? or hang on and see where they go?

P.s. By the way what are Rios returns? and dividends like?


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## Joe Blow (11 February 2009)

andione1983 said:


> i got  few grand a month or so ago at $38 a share, what should i do? sell up at 50???? or hang on and see where they go?




Hi Andi,

Just so you know, nobody here can offer you buy or sell advice on particular stocks. Only licensed financial advisors can provide this kind of specific financial advice.

If you are trying to figure out whether to hold or sell I would consider why you bought the shares in the first place and what you hoped to achieve. Are you looking to the short or long term? I'm sure that by considering these kind of questions, and by doing your own research, you will have a much better idea of how long you want to hang onto your RIO shares.

All the best!


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## noirua (11 February 2009)

vincent191 said:


> Noiru....that is why we have underwriters, in case the institutions don't take up the entire rights issue the underwriters will have to fill in the "void".
> 
> Oldblue....i guess you are right...we will never know. But the newspapers are still talking about a possible rights issue.



If a substantial holder states they may not be in a position to take their rights, then underwriters are unlikely, in these markets, to go near it. Also, if substantial holders vote against it the rights issue could flounder anyway. RIO would have to get the substantial holders onside before going forward with a rights for about US$10 billion or more.


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## noirua (12 February 2009)

RIO are now in a trading halt as they finalize their sales to China of interests in mines in a complex bond exercise.


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## Ghetto23 (12 February 2009)

Do we think that the SP is going to go up or down after the trading halt is lifted?

I haven't had good experiences with trading halts of late...


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## Largesse (12 February 2009)

i guess you need to figure out which is going to have more of an effect on the price

a monster capital raising (at an inevitably large discount) vs a monster reduction in debt as a result of asset sales.

consider that they are selling off a large portion of their future earning potential aswell....


----------



## sammy84 (12 February 2009)

Ghetto23 said:


> Do we think that the SP is going to go up or down after the trading halt is lifted?
> 
> I haven't had good experiences with trading halts of late...




I gather from the share price run up RIO had in the last few days, that many consider this good news.


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## Largesse (12 February 2009)

http://www.businessspectator.com.au/bs.nsf/Article/A-stinker-of-a-deal-for-Rio-$pd20090212-P6R79?OpenDocument&src=sph


one of the rare occasions i completely agree with kohler


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## vincent191 (12 February 2009)

It will be very interesting to watch the SP in the next few weeks. Lets see how the magicians can make debt disappear. 

I think this convertable notes and the Chinalco deal is all smoke & mirrors. It is much less transparent than a straight out rights issue.

I still think the board is all about maintaining the SP because the value of their performance options are linked to the SP and of course their reputations.

It still dont understand how a Company can be worth more (in terms of market capitalisation)  by selling it's assets. The biggest fear is ROI selling off some of Australia's best iron ore deposits at a basement bargain price.


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## oldblue (12 February 2009)

I think there's a bit more than smoke and mirrors involved here.
RIO have a lot of debt, some of which has to be paid down in the medium term either by the sale of assets or by issuing more capital. Whichever way, some hard cash is going to change hands and end up being paid back by RIO to the financiers.


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## oldblue (12 February 2009)

It still dont understand how a Company can be worth more (in terms of market capitalisation) by selling it's assets. QUOTE.

Only because if done well, it avoids having to later sell off at a much less advantageous price. In theory, the company is stronger, financially, after the sale and the shares are worth more.
OZL is in this position. Their risk is that if they can't make good sales they will pass into the hands of their bankers who will sell out for the amount of their loans leaving little or nothing for shareholders. RIO's situation is nothing like this, of course.


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## Dangerous (12 February 2009)

Rio make me so mad.  They typify the bullish short term approach of the current era.  Why did they have to go into mining?  They should have just kept on doing what they did best - making underwear.


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## Miner (12 February 2009)

Dangerous said:


> Rio make me so mad.  They typify the bullish short term approach of the current era.  Why did they have to go into mining?  They should have just kept on doing what they did best - making underwear.




Dangerous

Rio is still making underwear.

Excepting there products developed  some holes from the excessive size of their assets. They got exposed so now Rio decided to trim the size of their assets  and repair the holes in the underwear with Chinese mending.


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## vincent191 (12 February 2009)

I hate been screwed three times.

Once when the Directors paid too much for the assets.

Twice when the assets get sold off cheap cheap.

Trice when the covertable bonds mature and shareholders get diluted.


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## Nick453 (13 February 2009)

Interesting article!!!

http://www.theaustralian.news.com.au/business/story/0,28124,25046776-5005200,00.html


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## vincent191 (13 February 2009)

Since I disagree with the decisions of the Directors of RIO,
the only course of action available to me is to sell my shares in RIO.  At $50 I am not complaining. This I will do.

But as an Australian I am disappointed that some Pom in the UK can sell off part of Australia. I agree with media pundits that Rudd & Swan should take a close look into the proposed deal and put the interest of Australia ahead of Skinner & Albanese.

From some commentators the stake in Hammersley is already worth the entire 19 billion.


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## investorpaul (13 February 2009)

vincent191 said:


> Since I disagree with the decisions of the Directors of RIO,
> the only course of action available to me is to sell my shares in RIO.  At $50 I am not complaining. This I will do.
> 
> But as an Australian I am disappointed that some Pom in the UK can sell off part of Australia. I agree with media pundits that Rudd & Swan should take a close look into the proposed deal and put the interest of Australia ahead of Skinner & Albanese.
> ...



I guess the question has to be though, do you let RIO sell its assets to strengthen its balance sheets? or allow it to continue on its merry way and potentially be smashed later on if market conditions continue to worsen.


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## oldblue (13 February 2009)

I don't hold RIO but it seems an incredibly short sighted decision to sell off so much of the business rather than raise new capital, albeit at a hefty discount presumably. After all, companies such as Wesfarmers, Westfield and Suncorp have been able to raise capital, admittedly smaller sums but substantial nevertheless.
Unless one subscribes to the view that capital and commodity markets will never recover it appears to be one of the worst boardroom decisions for a long time.
The fact that the chairman-elect walked, or was pushed, indicates to me that the capital-raising option was never properly explored.


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## vincent191 (13 February 2009)

Oldblue......I agree with what you say. Selling your income producing assets (especially the jewels in your crown) is just like selling off your best sources of future earnings.

This is bad unless you are in dire straits and have no further venues (like Oz minerals) and this is not the case with RIO.

Sure, a rights issue will push the SP down but at least it gives the existing shareholders the option to buy in at the discounted price and enable the Company to hold on to its prized assets and the sources of it's future earnings.

Secondly, if your 20% shareholder is also your major customer, can he have an undue influence on your on-going selling price??

Not only have RIO sold 20% of the farm, but have they also compromised the selling price of it's future produce???


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## oldblue (13 February 2009)

As an aside, the proposed deal says a lot about the different approaches to business by  Chinalco and RIO.
The former is adopting a strategy that delivers substantial benefits now but will take 60 years to come to full fruition.
RIO is looking for an instant solution to its problems.


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## sammy84 (13 February 2009)

The deal does give RIO a great strategic placement/competative advantage in the Chinese market however....


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## long$$ (26 March 2009)

Not much interest in this thread - is this why?

Commentary
7:26 AM, 26 Mar 2009
 http://www.businessspectator.com.au/bs.nsf/Article/Trust-is-lost-$pd20090326-QGRQD?OpenDocument&src=ei


Robert Gottliebsen

    Trust is lost

The Rio Tinto-Chinalco 600 page agreement morass is just another illustration of how trust in the business community is rapidly evaporating. Over time, lack of trust in business executives and organisations will emerge as one of the biggest problems in the world, with repercussions that go way beyond the immediate difficulties we are now facing.

Who could have thought the chief executives of banking/insurance organisations like Citibank, Merrill Lynch, Bank of America, AIG, Lehman, Royal Bank of Scotland and many others would be so stupid as to be involved in loaning billions to people who had no hope of servicing the debt; gambling that big US companies would go broke; lending to Eastern European residents in Swiss francs and many more such crazy schemes.

And many banking and insurance executives responded by arrogantly paying themselves multi-billion dollar bonuses for their 'good work' in sending or almost sending their organisations to the wall. These are people whom we looked up to and who betrayed our faith. Trust has been lost.

In Australia we saw property trusts go on massive borrowing binges even though their stock holders were retirees who wanted income, not high risk. Again, trust has been lost.

Banks gave lines of credit and loans and are now pulling the rug from under their customers. Trust has been lost.

We believed the ratings that the rating agencies gave us. They were next to useless. Trust has been lost

Directors signed contracts with CEOs that involved big exit payments even if the CEO failed. Trust has been lost.

The accounting bodies set up accounting standards that produced results that were not suitable for stock analysts so the institutions and companies set up their own albeit imperfect standards. That is now being fixed, but once again trust has been lost.

I could go on and on but in a society where big corporations have lost the trust of the community there are going to be big reductions in executive salaries globally. The publication of executive salaries which originally started a bidding auction will work the other way as companies say: “Our rivals have cut their CEO salary – we should do the same.”

In the absence of trust there will be much stricter regulations and, as always, we will go too far. In Australia we are going to greatly reduce productivity with a set of industrial relations laws that go back a quarter of a century. The workers say the executives have been feathering their nests – “and now it's our turn”. Unemployment will go through the roof, but too bad. Trust has been lost.

There's plenty more to be said on this topic, but back to Rio Tinto. With the benefit of hindsight the company paid too much for Alcan and, worse still, did not raise sufficient equity at the time and/or did not work fast enough to sell assets to reduce borrowing so that they were selling and/or raising capital at the same price level as the Alcan purchase. They should also have at least talked with BHP. Trust has been lost.

My experience is that once trust is lost, particularly if there are large losses, then the group who created the problem rarely have the talents to get out of it. Executive and board ranks usually must be changed. And so America and the UK need to flush out all the executives who made the bad decisions and replace them with lower paid people who can do the job.

The 600 page Rio Tinto agreement morass is a series of agreements that are often included in joint ventures. They have been strung together without any understanding of the total control effect of the combination of all the transactions and agreements.

A Leigh Clifford (former Rio Chief) who had total trust might have been able to convince people that all was well. Conversely he may never have gone down such a path.

The Alcan and BHP errors that are on the slate of Clifford's successors means that trust in Rio Tinto has been lost. That’s why we will look very suspiciously at what it being proposed and what we see looks very different from what the parties say is there.


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## mfsperth (16 April 2009)

*RIO and Chinalco*

Rio have just paid a dividend of about 2% on the current share value. Chinalco is being offered convertible bonds at 9.2%.

How does this work for current shareholders?


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## tommymac (16 April 2009)

*Re: RIO and Chinalco*

And RIO announced yesterday it would offer 5 and 10 year bonds with respective rates of 8.95% and 9.00%.

I haven't read the prospectus so I don't know if these are also convertible.


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## nikemi (7 May 2009)

One thing i find very interesting is how adamant Rio's chairman was about BHP's takeover, even when it was obvious that as conditions deteriorated it was actually in the shareholder's best interest at the time. 

Now he is equally adamant that Chinalco's proposal is the best for Rio, despite the fact that a lot has changed since that agreement was reached at the current bottom of the resources sector. They are not even prepared to look at options in light of changed circumstances. 

a lot of companies have now that the markets recovered from their lows gone back to the markets to raise capital and the result of that on their share price is far less detrimental than what it would have been a few months back. And how come Chinalco's offer his not reevaluated in the current circumstances. i do remember reading somewhere that CEO's do get rewarded for clinging deals for asset sales etc, but apparently don't get anything under share issues. does any one have any insight on that? and is it really the best for Rio right now to carry on with Chinalco despite the fact that they are selling their better performing assets as part of the agreement, not to mention that the bond issue part does not seem so attractive anymore either....

Or is the silence on this thread speaking for itself...


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## nikemi (7 May 2009)

nikemi said:


> One thing i find very interesting is how adamant Rio's chairman was about BHP's takeover, even when it was obvious that as conditions deteriorated it was actually in the shareholder's best interest at the time.
> 
> Now he is equally adamant that Chinalco's proposal is the best for Rio, despite the fact that a lot has changed since that agreement was reached at the current bottom of the resources sector. They are not even prepared to look at options in light of changed circumstances.
> 
> ...




Well it looks like i am not the only one asking these questions

0502 GMT [Dow Jones] Rio Tinto (RIO.AU) says logic of Chinalco deal remains compelling. But Southern Cross Equities director Charlie Aitken disagrees. He calculates currency-adjusted value of first tranche of proposed US$7.2 billion convertible bond issue at A$68.90 vs current share price of A$70.70. "In the space of just three short months, 'the superior value for RIO shareholders' has now become 'superior value for Chinalco shareholders'." Even more damaging for management, says Aitken, is recent AUD/USD strength, which makes Chinalco deal even less attractive. More important is how much more undervalued Chinalco's offer would be when commodity prices begin to recover to anywhere near peak cycle levels. "I suspect the answer will be that RIO is giving away stakes in strategic assets at firesale prices," says Aitken. RIO's comments made at CEDA conference in Melbourne, on topic of foreign investment and the mining industry. RIO last up 2.6% at A$70.89. (DWR)


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## mfsperth (14 May 2009)

So in the love story between Chinalco and Rio, the two are now being called Colleen and Robert.
Colleen is reportedly being directed by the State Council of China. Not surprising really. The increased stake is seen by China as a strategic investment in the face of the pricing behaviour of the Australian iron ore majors in 2007-8 which certainly wasn't designed to sustain long term Australia-China relationships, and the onetime threat of a BHP-Rio merger. 
Follow it from the Chinese perspective in http://english.caijing.com.cn 
And keep in mind that Vale has twelve 400,000 tonne carriers on order from Chinese shipyards. Dredging needed at Pt Hedland perhaps under the federal government infrastructure package to remain competitive?


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## MR. (14 May 2009)

> "Nothing has been announced by the company. It is all speculation."




http://www.thebull.com.au/articles_detail.php?id=2976

down 11.9%,  keeps on sliding. Stops hit?  
Both BHP and Rio adding some weight today.


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## gaps (15 May 2009)

Rio Tinto and Chinalco announced today that they have obtained clearance from the 
Committee on Foreign Investment in the United States ("CFIUS") regarding the proposed 
issue of convertible bonds to Chinalco and the indirect minority investment in Kennecott 
Utah Copper Corporation, as contemplated by the strategic transaction announced by Rio 
Tinto and Chinalco on 12 February 2009. Rio Tinto and Chinalco jointly filed a voluntary 
notice with CFIUS in connection with the transaction.  The receipt of CFIUS clearance 
satisfies a regulatory pre-condition to the transaction. 


what significance does this have actually? thanks in advance!


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## bonkerrs (15 May 2009)

gaps said:


> Rio Tinto and Chinalco announced today that they have obtained clearance from the
> Committee on Foreign Investment in the United States ("CFIUS") regarding the proposed
> issue of convertible bonds to Chinalco and the indirect minority investment in Kennecott
> Utah Copper Corporation, as contemplated by the strategic transaction announced by Rio
> ...




+1
Would like to know too. If I've read the news correctly - this is a good thing for RIO share price.


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## Garpal Gumnut (15 May 2009)

bonkerrs said:


> +1
> Would like to know too. If I've read the news correctly - this is a good thing for RIO share price.





The chart as always gives you some guidance.

If RIO dropped below support/resistance at $60 I'd be out.

Its still in an uptrend though and its mostly pommy funds who are driving the price at present.

Our $ is good.

They are in huge ****.

I'll hold at present 

gg


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## Trevor_S (5 June 2009)

So, with the Chinalco deal falling through, and a rights issue on the cards, anyone know when the hold date for RIO shares might be to be entitled to the rights  and will they even have an issue for the private investors ?


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## drsmith (5 June 2009)

The $15bn rights issue is at a whopping 58% discount to RIO's $AUD last sale price.

http://www.asx.com.au/asxpdf/20090605/pdf/31hy91869pldpn.pdf


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## searsr (5 June 2009)

This may seem like stupid question but im only new to the stock market, but does that announcement basically say if you have less than 40 shares you cannot participate in the rights issue?


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## nunthewiser (5 June 2009)

****[nunthewiser] 9:25 am: holds rio
**** : prolly gettem cheaper
**** : but is at one with it ****
****  gawd bless oztralia ..jam sand up ya clacker you cheeky chinese

that time shown is from chatroom which is shown as WA time for me

NOT a ST trade .. wants the discounts on issue


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## drsmith (5 June 2009)

searsr said:


> This may seem like stupid question but im only new to the stock market, but does that announcement basically say if you have less than 40 shares you cannot participate in the rights issue?




From the chairmans letter to shareholders.



> Entitlements to New Shares will be rounded down to the nearest whole number and fractional entitlements will not be allotted to Shareholders but will be aggregated and sold in the market for the benefit of Rio Tinto.....




http://newsstore.smh.com.au/apps/previewDocument.ac?docID=GCA00958716RIO&f=pdf

So I would say no. As an example if you have 20 shares you will have the right to purchase 10 more at $28.29. It is only the fractional entitlement above 10 that is lost (0.5 of a share).


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## oldblue (5 June 2009)

Trevor_S said:


> So, with the Chinalco deal falling through, and a rights issue on the cards, anyone know when the hold date for RIO shares might be to be entitled to the rights  and will they even have an issue for the private investors ?




Shares are trading cum rights at the moment.
Record date is 11 June so with 3 day settlement they should still be cum rights on Monday but check with your broker.
It's a 21 for 40  entitlement issue so private investors participate. I don't know what happens for holdings of less than 40 shares.

Edit. Previous post covers fractions.


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## Nyden (5 June 2009)

oldblue said:


> Shares are trading cum rights at the moment.
> Record date is 11 June so with 3 day settlement they should still be cum rights on Monday but check with your broker.
> It's a 21 for 40  entitlement issue so private investors participate. I don't know what happens for holdings of less than 40 shares.
> 
> Edit. Previous post covers fractions.




No, for Australian investors the record date is the 22nd. The 11th is for RIO plc.

It really is a substantial discount, I must say; I just might take it up : Either way, my BHP holdings are sitting very pretty


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## benwex (5 June 2009)

Nyden said:


> No, for Australian investors the record date is the 22nd. The 11th is for RIO plc.
> 
> It really is a substantial discount, I must say; I just might take it up : Either way, my BHP holdings are sitting very pretty




With the window open for alittle while to get involved in this heavily discounted capital raising, anyone with some cash would be seriously considering getting into RIO prior to the 22nd in OZ and the 15th in the UK.

I am really surprised by the size of ther discount. You would expect RIO post record date will tank very big to say the least. But OST has not yet after there discount raising..

benwex


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## furiouswilly (5 June 2009)

Nyden said:


> No, for Australian investors the record date is the 22nd. The 11th is for RIO plc.
> 
> It really is a substantial discount, I must say; I just might take it up : Either way, my BHP holdings are sitting very pretty




I couldn't the record date for Australia, please advice where you get this information from? 

thank you


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## Nyden (5 June 2009)

furiouswilly said:


> I couldn't the record date for Australia, please advice where you get this information from?
> 
> thank you




Read through the announcement "Expected timetable and key dates"
That announcement states that the date for Australia is the 22nd.


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## drsmith (5 June 2009)

furiouswilly said:


> I couldn't the record date for Australia, please advice where you get this information from?
> 
> thank you



RIO announcements a-plenty. The allocated space for announcements on RIO's ASX page has been filled with today's offerings.

It's in the timetable announcement. Shares trade ex-rights on the ASX on the 17th.


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## ronski456 (5 June 2009)

What do people think will happen to RIO's share price once the rights issue has been subscribed to?
In the short term will it be a big short selling target making it plummet?
Will RIO ever get over the magical $100 a share mark?


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## tommyben (5 June 2009)

Sorry I'm quite new to the market and have some RIO Shares

Would you be allowed to buy more than you're entitled too in the rights issue?


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## oldblue (5 June 2009)

Nyden said:


> No, for Australian investors the record date is the 22nd. The 11th is for RIO plc.
> 
> It really is a substantial discount, I must say; I just might take it up : Either way, my BHP holdings are sitting very pretty




Not quite right either, Nyden.

Record date for Rio Tinto PLC is close of business on 15 June.
Must admit I don't quite follow this business of "Record Mailing Date for first posting of Rio Tinto Limited...  11 June " but it seems  pretty clear that RIO shares are cum issue at the moment and are quoted ex rights on 17 June.


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## Nyden (5 June 2009)

oldblue said:


> Not quite right either, Nyden.
> 
> Record date for Rio Tinto PLC is close of business on 15 June.
> Must admit I don't quite follow this business of "Record Mailing Date for first posting of Rio Tinto Limited...  11 June " but it seems  pretty clear that RIO shares are cum issue at the moment and are quoted ex rights on 17 June.




Yes, I meant that the record date is 22nd of June, sorry : At least that's how I understand it. Quite complicated, really - the way they've set all of these different dates for the 2 different markets ...

Perhaps that 11th of June represents the first round of offers?


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## oldblue (5 June 2009)

tommyben said:


> Sorry I'm quite new to the market and have some RIO Shares
> 
> Would you be allowed to buy more than you're entitled too in the rights issue?




Its a rights issue. You will have to buy extra rights on the market. Trading commences on 17 June and ends on 24 June.


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## shag (5 June 2009)

tommyben said:


> Sorry I'm quite new to the market and have some RIO Shares
> 
> Would you be allowed to buy more than you're entitled too in the rights issue?




they said on boardroom radio, punters in macbank and that recent steel cap raising/spp, got more than their entitlements when the paid up more dosh. check it on the australian weekly roundup.
i guess when it all comes down to it, moneys money to these fellas and personal holdings/value mean little to them. still seems a little strange.


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## oldblue (5 June 2009)

shag said:


> they said on boardroom radio, punters in macbank and that recent steel cap raising/spp, got more than their entitlements when the paid up more dosh. check it on the australian weekly roundup.
> i guess when it all comes down to it, moneys money to these fellas and personal holdings/value mean little to them. still seems a little strange.




Not a hope!

It's an entitlement issue. And it's underwritten so any shortfall will be a great freebie for the underwriters. At today's cum issue price, the theoretical rights value is near enough to $29!
If they trade under about $25 I'll be buying some.


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## airpoe (5 June 2009)

shag said:


> they said on boardroom radio, punters in macbank and that recent steel cap raising/spp, got more than their entitlements when the paid up more dosh. check it on the australian weekly roundup.
> i guess when it all comes down to it, moneys money to these fellas and personal holdings/value mean little to them. still seems a little strange.



correctly me if i'm wrong but for the Macq Bank wasn't the maximum $15k?

So you could of send more than 15k & would still get more shares?


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## awg (5 June 2009)

Nyden said:


> No, for Australian investors the record date is the 22nd. The 11th is for RIO plc.
> 
> It really is a substantial discount, I must say; I just might take it up : Either way, my BHP holdings are sitting very pretty





happy days BHP and RIO, especially as I picked up good parcels near lows

fair bit to think about with RIO now, divs suspended, dilution, some downward pressure on SP?

If the Chinese customers decide to play hardball, that could have effect.

I am sure they will be peeved, time will tell whether supply requirements will hold up iron ore prices.

nearly got on FMG, could be some buy-ups in them and the smaller players


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## oldblue (6 June 2009)

airpoe said:


> correctly me if i'm wrong but for the Macq Bank wasn't the maximum $15k?
> 
> So you could of send more than 15k & would still get more shares?




You could for Macq Bank but you won't be able to for RIO.

It's a pro-rata *entitlement* issue. It's underwritten, the rights will trade on the exchange and have a theoretical value of around $28 - $29 based on the latest cum rights price.
If the rights fall below about $25 I'll be buying a few!


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## mfsperth (6 June 2009)

*Re: RIO - Rio Tinto BHP tie up and dumping Chinalco*

There is $195m of shareholders' funds going to Chinalco as a break fee.
Then there will be all the fees to underwriters etc for the new rights issue.
Does the board really know what it's doing?


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## shag (6 June 2009)

its still a bit shonky. the guys giving the weekly roundup in the australian said/implied give it a go if u have the spare dosh. but i wasnt in on the macbank one so dont know if it was pro rata or a supposed limit of 15k. maybe not relevant to rio but maybe others.
the other one they used as an example, bluescope steel?, was well in the money also.


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## db96 (6 June 2009)

Can someone confirm some of these dates as it can be confusing

1) Last date to trade RIO on ASX to be eligible for the rights issue. Is this different to the record date.
2) The rights trading is from Wed 17/06/09 to Wed 24/06/09. I guess the price will depend on the RIO sp. 
3) The date when the new shares will be allowed to trade on the ASX. Many thanks.


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## alter1217 (6 June 2009)

I have some RIO shares. What is the last day I can sell my RIO shares so that the _buyer_ will be able to get the share issue rights? It says 17th is the record date... But what about shares being T+3, is that relevant?


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## niknah (6 June 2009)

Look under "Rio Tinto Limited" here...
http://stocknessmonster.com/news-item?S=RIO&E=ASX&N=318932

11-jun record date for acceptance forms.
16-jun dispatch of the acceptance forms
17-jun ex-rights, *** buy before this date!
22-jun record date for entitlements.
26-jun Another dispatch of the acceptance forms.
10-jul Normal trading of the new shares commences. *** sell here!

But they'll probably have the acceptance form available for download if you don't receive one in the mail.


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## db96 (7 June 2009)

niknah said:


> Look under "Rio Tinto Limited" here...
> http://stocknessmonster.com/news-item?S=RIO&E=ASX&N=318932
> 
> 11-jun record date for acceptance forms.
> ...




Thanks Niknah. That has clarified a lot of things. But is it not better to go short from the 17/06/09 which is the ex rights date.


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## abc_loveit (7 June 2009)

Hi all,
I am a new investor. My question is, if I buy RIO on Tuesday (9th of June), will I be entitled to the right issues, thanks,


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## alter1217 (7 June 2009)

niknah said:


> Look under "Rio Tinto Limited" here...
> 
> 11-jun record date for acceptance forms.
> 16-jun dispatch of the acceptance forms
> ...




If you were going to sell them all asap....
Shouldn't you sell your (existing) RIO shares on the 17th (maybe 18th)? You'd still be quoted the rights? Then take up the share issue, and sell the 2nd batch on the 10th July? You'd get rid of your shares faster that way but still get involved in the share issue. Am I correct?


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## happymark (7 June 2009)

hi guys, 
I have some rio shares - say 100
Please correct me where posible --
Shares just before announcement were $65 ------------ $6500
Taking up the 50% extra new shares 50 at $28 costs----$1400 
Total cost      -----------------------------------------$7900

Shares after capital rasing will be diluted to about $55 ??
So after take-up the 150 x 55 -------------------------$8250
profit then is ------------------------------------------$350

Shares are currently $72 before taking up new shares--- $7200
 profit with sell the 100 now without share offer takeup   $ 700

My logic must be wrong somewhere can anyyone help??


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## alter1217 (7 June 2009)

happymark said:


> hi guys,
> I have some rio shares - say 100
> Please correct me where posible --
> Shares just before announcement were $65 ------------ $6500
> ...




Maybe something in the announcement other than the capital raising made the share price go up so the assumption "Shares after capital rasing will be diluted to about $55" may no longer be correct?


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## oldblue (7 June 2009)

Yes, the "diluted to about $55" is pure supposition. In fact, the mathematical figure is $52-66 but this itself is based on an approximation ( the ratio is 21 for 40, not 1 for 2).

I prefer to work on the following basis:

Asssuming a SP prior to the announcement of $65, 40 shares cost $2699 plus 21 new shares at $28-29 cost $594, a total of $3194.
The 61 shares therefore have an average cost of $52-36.

If we work off the closing price on Friday of about $72, the average cost is $56-95. This gives a theoretical rights price of $28-66 but of course anything can happen to change this during cum rights trading and after that it's anyone's guess.


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## rustyheela (7 June 2009)

So amid all these confusing dates and other stuff blah blah .....

when the rights become tradeable if you buy 1 right  ( say $ 30.00 ) is this equal to 1 fully paid share ( plus the $28.29 payable or do you have to buy 40 rights to access 21 new shares,
 or will 1 right ( equivalent to 40 ) cost x amount giving access to 21 shares?
all this thinking is compounding my hangover!!


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## oldblue (7 June 2009)

rustyheela said:


> So amid all these confusing dates and other stuff blah blah .....
> 
> when the rights become tradeable if you buy 1 right  ( say $ 30.00 ) is this equal to 1 fully paid share ( plus the $28.29 payable or do you have to buy 40 rights to access 21 new shares,
> or will 1 right ( equivalent to 40 ) cost x amount giving access to 21 shares?
> all this thinking is compounding my hangover!!




The 21 for 40 ratio has no bearing on the matter once the shares go ex issue. At that point, the rights accrue to the registered holder and can be taken up or sold. Any number can be bought, subject to any rules on the matter that your broker may enforce as to a minimum, and each right is a "right" to a new share and will cost another $28.29, payable to the company.
It is normal for brokers to bill clients for the cost of rights, plus the application money and for them to be responsible for lodging the application. They then normally charge brokerage on the all-up cost!


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## rustyheela (7 June 2009)

I have some RIO shares. What is the last day I can sell my RIO shares so that the buyer will be able to get the share issue rights? It says 17th is the record date... But what about shares being T+3, is that relevant



thereotically, for the buyer they have to buy 3 days ( t+3)  before the record date wouldnt they?
With the santos STO rights issue i was stopped out on the 13th may
 ( record date was 14th may ) but received a rights offer doc from computershare and was advised this was because of t+3


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## oldblue (8 June 2009)

17 June is not the "Record Date".

"Existing RIO shares quoted ex-rights 17 June."

This implies that you can Buy/Sell cum rights up to and including 16 June. Given the "T+3" system, the company is allowing themselves until 22 June to record entitlements.
( "...Record Date for entitlements..... 22 June " )

That's my interpretation but I wouldn't be buying or selling without confirmation from my broker!


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## gfresh (9 June 2009)

Unsure of the value of the buying in for rights issue for profit at present prices...

Say $10,000 shares purchased today @ $73 = ~137 shares 

Entitlement: (3*21) + (0.525 * 17 = 9) = 72 shares x $28.29 = $2036.88

Total cost: $12,036.88 / 209 shares
Avg cost: $57.59

Every share is being diluted by 52.5% (21/40).. Ex-issue EPS will be ~65.5% of present. Effective trading price post issue therefore should be around $48 (0.655 x $73).. meaning avg buy price of $57.59 is poor. Anybody agree? 

Can't see any large increase in profit in next 12 months, costs savings with BHP tie-in will take longer to carry through.


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## alter1217 (9 June 2009)

gfresh said:


> Unsure of the value of the buying in for rights issue for profit at present prices...
> 
> Say $10,000 shares purchased today @ $73 = ~137 shares
> 
> ...




Holding all else equal... Rio is no longer selling itself cheaply to chinalco, plus its debt problems are partially relieved by the share issue, so I think if the current economic situation remains the same until post issue the price wouldn't be as low as $48. More like $57.59 because the market has already taken everything it knows into account.


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## gfresh (9 June 2009)

Yes, agree that things are probably now factored into price.. but if this is so, buying to take up the rights issue (say buying this week) would not give you too much advantage. Different perspective if you were a longer-term holder. 

EPS is forecast to be $4.363 for 09 .. post dilution eps could be around $2.858 .. $58 price (or thereabouts) would be a P/E ratio of 20, which already factors a bit of growth coming out of the GFC. Not much discount for a new holder.


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## vincent191 (9 June 2009)

Any possibility that Chinalco may not want to take up any of their rights and dump the whole lot on the market??

Since the deal is off would Chinalco still want to maintain their shareholding % in RIO? 

Maybe they might want to move some of the money over to FMG?

If so what are the effects on RIO sp? Any thoughts?


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## oldblue (9 June 2009)

I think the removal of the uncertainty factor makes it unlikely that RIO will trade below $50 ex issue unless the market as a whole takes a step back.
The BHP factor comes in to play again, probably not strongly at this stage but it should act as a bit of a buffer to any SP weakness.
As for Chinalco, they have their foot in the door now and I can't see them wanting to reduce their interest.


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## naughtynickers (9 June 2009)

Sorry guys I've read through the last few pages and still can't find a final answer.

If I have no Rio shares now on what date do I need to buy so I qualify for 21 for 40 offer.

Cheers

From what I have seen it would appears as 11th June 7pm. That is for Rio Limited 
Rio PLC (UK) it would appear 15th June COB.


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## bonkerrs (9 June 2009)

naughtynickers said:


> If I have no Rio shares now on what date do I need to buy so I qualify for 21 for 40 offer.






abc_loveit said:


> Hi all,
> I am a new investor. My question is, if I buy RIO on Tuesday (9th of June), will I be entitled to the right issues, thanks,



 I've read through this thread and had a look at the RIO announcements and am still unsure about this. If we don't get an answer here I'll make a call to them tomorrow.


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## oldblue (9 June 2009)

RIO shares are quoted ex rights in Aust on 17 June.

This means, to me, that you can buy them cum rights up to and including 16 June but ask your broker to be sure.
( A good clue will be when RIO shares drop from $70 something to $50 something on opening on 17 June!)


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## oldblue (9 June 2009)

abc_loveit said:


> Hi all,
> I am a new investor. My question is, if I buy RIO on Tuesday (9th of June), will I be entitled to the right issues, thanks,




The answer is "Yes".
RIO shares go ex rights from 17 June so if you bought today you are entitled to the issue.


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## bonkerrs (10 June 2009)

bonkerrs said:


> I've read through this thread and had a look at the RIO announcements and am still unsure about this. If we don't get an answer here I'll make a call to them tomorrow.



Just called RIO. Can still participate if you bought shares today. As long as it is before the 22nd and make sure to include 3 days for settlement i that being said I guess no later then 17th... so, what Oldblue said.


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## YELNATS (10 June 2009)

bonkerrs said:


> Just called RIO. Can still participate if you bought shares today. As long as it is before the 22nd and make sure to include 3 days for settlement i that being said I guess no later then 17th... so, what Oldblue said.




As per Rio's June 5 announcement, the date and time to hold RIO shares and thereby qualify for the rights issue is close of business next Tuesday June 16.


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## a49002 (11 June 2009)

Can anyone please explain what happens to current shareholders who dont buy extra shares under the rights issue? Do my current shares become diluted in value or do I automatically get issued with extra shares under this issue?

Thanks.

Paul


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## samuely1 (11 June 2009)

Can someone explain what I need to do to get involved with this offer.  Do I just need to purchase a certain amount of shares? How many? When by?


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## bonkerrs (11 June 2009)

Buy at least 40 RIO shares before the end of trade - 4pm on 16th.

You have to BPay or return a form stating the amount you want (within your entitlement).


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## oldblue (11 June 2009)

a49002 said:


> Can anyone please explain what happens to current shareholders who dont buy extra shares under the rights issue? Do my current shares become diluted in value or do I automatically get issued with extra shares under this issue?
> 
> Thanks.
> 
> Paul




First, you won't get any extra shares unless you pay for them, ie, take up the rights.

You can, however, sell your rights and these should have a good value, theoretically at this point something like $28-$29, depending on supply and demand and all the others factors that make up share prices. If you sell your rights, you have, in theory, been compensated for the dilution in the value of your holding. Bear in mind though that you will pay brokerage on the sale of rights and that there is no brokerage on taking up a new issue.


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## a49002 (11 June 2009)

oldblue said:


> First, you won't get any extra shares unless you pay for them, ie, take up the rights.
> 
> You can, however, sell your rights and these should have a good value, theoretically at this point something like $28-$29, depending on supply and demand and all the others factors that make up share prices. If you sell your rights, you have, in theory, been compensated for the dilution in the value of your holding. Bear in mind though that you will pay brokerage on the sale of rights and that there is no brokerage on taking up a new issue.




Old Blue,

Thanks for taking the time to reply. That makes sense now as it has not been easy to get uncomplicated answers about this issue. 

Paul


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## abc_loveit (11 June 2009)

Based on what I read, if I buy RIO before 4pm 16th of June, I will be entitled to the 21 to 40 right issue. The ex-right date will be 17th June (and the record date is 22nd of June, T+3). Hope these are correct,


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## oldblue (11 June 2009)

abc_loveit said:


> Based on what I read, if I buy RIO before 4pm 16th of June, I will be entitled to the 21 to 40 right issue. The ex-right date will be 17th June (and the record date is 22nd of June, T+3). Hope these are correct,




That's it.

If I was serious about buying the shares cum rights I don't think I'd leave it until the last minute unless I was happy to walk away if they suddenly got too expensive.

Alternatively, a strategy might be to buy the rights when/if they weaken under selling pressure. Again, I'd have to be prepared to forget it and move on to something else if this didn't happen.


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## bonkerrs (11 June 2009)

oldblue said:


> That's it.
> 
> If I was serious about buying the shares cum rights I don't think I'd leave it until the last minute unless I was happy to walk away if they suddenly got too expensive.
> 
> Alternatively, a strategy might be to buy the rights when/if they weaken under selling pressure. Again, I'd have to be prepared to forget it and move on to something else if this didn't happen.



Crikeys! They're that way now (expensive). I may still buy in?! Wanted to get in yesterday when it was low 68 but I "um'ed" about it for too long, now look at it! Still very green and uncertain about my trading.


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## jinx888 (11 June 2009)

I was wondering if it was possible to lock in profits with this rights issue.
If i bought 500 shares of rio on the 11th of June asuming t+3. Ill be eligble for tradeable rights which is listed on the 17th of june which should give 263 tradeable rights. Which i then sell on the market. If i hedge the position by shorting 500 shares of rio with CFD's would that be a definate profit? Quote me if im wrong.


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## skyQuake (11 June 2009)

You will have to 'pay' the RIO rights out of your CFD acct. 

So its a hedge at best. Lots of slippage at worst


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## bonkerrs (12 June 2009)

Quick question. Just wanted to make sure I get it right before doing anything:

Based on 40:21 raio
080 shares = 42 new shares (my entitlement)
115 shares = 42 new shares (my entitlement)
120 shares = 63 new shares (my entitlement)
125 shares = 63 new shares (my entitlement)


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## zacaxel1975 (12 June 2009)

bonkerrs said:


> Quick question. Just wanted to make sure I get it right before doing anything:
> 
> Based on 40:21 raio
> 080 shares = 42 new shares (my entitlement)
> ...




40 shares = 21 new entitlement
20 shares = 10 new entitlement (part shares rounded down).

115 shares = 60 new
125 shares = 65 new


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## oldblue (12 June 2009)

Yes.

Divide by 40, multiply by 21, round down to the whole number.

eg Holding 100; calculates out at 52.5, entitlement 52.


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## bonkerrs (12 June 2009)

Thanks oldblue and zacaxel1975! I was just trying to work backwards with zacaxel's reply when you replied.


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## Smallprofits (15 June 2009)

*Short RIO*

Hi

would I be right in saying that we should all be shorting RIO? its going to come down after 16th yeah?


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## oldblue (15 June 2009)

*Re: Short RIO*



Smallprofits said:


> Hi
> 
> would I be right in saying that we should all be shorting RIO? its going to come down after 16th yeah?




I'm no expert on shorting but given that you have to borrow shares to short a stock, I'd have thought that you'd have to account to the holder for the " cum issue" element when you buy back.
A lot will depend on the extent to which the ex issue price drops, but I wouldn't be hazarding a guess on that.


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## abc_loveit (15 June 2009)

*Re: Short RIO*

Based on today close price of RIO at 75.50, it equals to about $60.00 per share including benefit on right entitlement. Therefore, it is not a shocking event when RIO pull back below $60.00 after ex-right on the 17th of June. I am sure on how to trading short on RIO, but will this pull back have an impact on XAO index? Can we go short on XAO tomorrow.


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## skyQuake (15 June 2009)

Shorting RIO wont work, as the fall is factored into the price. If you're short you will have to pay the rights value to the lender.

Ex rights tomorrow should be $59.25

XAO value shouldn't be affected by RIO fall as its a rights issue. The fall in price is offset by the increase in no. of issued shares. ie. Market cap remains constant. (Of course RIO can rise or fall on top of that from overnight leads etc)


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## benwex (15 June 2009)

If I buy RIO tommorrow the 16th,  will I still be inline for the entittlement??

Considering the settlment date will be the 19th I think??

Thanks for any help.

benwex


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## huyha123 (16 June 2009)

benwex said:


> If I buy RIO tommorrow the 16th,  will I still be inline for the entittlement??
> 
> Considering the settlment date will be the 19th I think??
> 
> ...




I have contacted my broker. They said if I bought tomorrow (16th June 2009) I still entitle for the right issue. 

but 17th will be ex-right date, which mean tomorrow is the last day to buy RIO for the right issue. 

That's what my broker confirm with me. but I would strongly suggest you confirm with your broker. sometimes rule differ with different brokers.


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## oldblue (16 June 2009)

I wouldn't bother confirming with my broker.

All trades on the ASX have to conform to the rules. RIO shares will be cum rights today, 16 June and will be quoted as such.
They trade ex rights tomorrow, 17 June.


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## bonkerrs (16 June 2009)

On top of my watchlist being a sea of red today.

What would be the general thinking of buyers/sellers that caused the price to fall so sharply on the last day of cum rights.


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## Sean K (16 June 2009)

This is all just profit taking. The 'news' that caused the US to come off was no worse than any other news the past few weeks. Crikey, when GM went officially bankrupt it went up 2%. So, the market has simply overextended for the minute and people who have made some nice profits are cashing in. Those that run the hardest, will fall the hardest. RIO has had a pretty bloody good run.


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## oldblue (16 June 2009)

That's about it, kennas.

As at Friday's close, the Dow had had its biggest 14 week gain for 34 years ( since 1975)!
Had to have a breather and everyone else follows suit.


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## bonkerrs (16 June 2009)

Why sell up and take profit today when you can be entitled to the very cheap offer if you hold for one day longer? I guess everyone has their strategy.

One other thing I want to ask - the market depth shows more buyers (many more) then sellers (buyers 1231 to sellers 466). Shouldn't this imply an increase in price when demand outweighs supply.


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## skyQuake (16 June 2009)

bonkerrs said:


> Why sell up and take profit today when you can be entitled to the very cheap offer if you hold for one day longer? I guess everyone has their strategy.
> 
> One other thing I want to ask - the market depth shows more buyers (many more) then sellers (buyers 1231 to sellers 466). Shouldn't this imply an increase in price when demand outweighs supply.




Because then rio shares will fall tomorrow to price in the cheap rights, just depends on overnight action really.

Those buyers could be clustered around $30 and have no intention of moving, or they could be tiny retail buyers and all the sellers are big sellers etc. Many different factors can affect that.


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## a49002 (16 June 2009)

For current RIO share holders, if we choose to sell the rights, from tomorrow,  what happens to the value of our current shares if we bought previously at, say $65.00? Selling the rights would provide cash profit but what happens to the price of the shares already bought at $65? Are these prior shares listed from 17th June at the new post-rights price in which case how is a cash profit made for the rights, or do the prior bought shares continue to sell at the current price until the 24th June?

I do wish RIO had released detailed info on this as all these questions may not have been necessary (perhaps).

Paul


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## skyQuake (16 June 2009)

What you bought the RIO shares for doesnt matter. They will trade where-ever the market deems them to trade. (prob around the $56 TERP mark)
RIO ordinary shares will change from cum rights to ex-rights tomorrow.

Basically there should be no portfolio gain or loss. The loss from the fall in RIO price should be made up by selling the rights on market.


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## vincent191 (16 June 2009)

Anyone care to guess how much those rights will be selling for? Around $30 with a further $28 to pay???


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## oldblue (16 June 2009)

vincent191 said:


> Anyone care to guess how much those rights will be selling for? Around $30 with a further $28 to pay???




The theoretical value of the rights is $28-87, based on a cum rights price of $72-34.
So a price tomorrow of $29 - $30 looks to be about right.
Unless, of course, the Dow takes another tumble tonight.


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## Seldon (16 June 2009)

Hi I am newbie here.

With RIO closing at $73.23 today, is this the correct calculation for the theoretical price for RIO ex-rights?

( 73.23 * 40 + 28.29 * 21 ) / 61 = 57.76

Thanks.


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## oldblue (16 June 2009)

Seldon said:


> Hi I am newbie here.
> 
> With RIO closing at $73.23 today, is this the correct calculation for the theoretical price for RIO ex-rights?
> 
> ...




That's correct.

And the theoretical rights price is $29.47. ($57.76 - $28.29). It will be interesting to see how close to these prices the ex issue shares and rights open tomorrow.


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## benwex (16 June 2009)

Am I missing something please????

I bought 100 RIO today the 16th for $72.06 (Record date 22nd)
I sell my 100 RIO shares for $70.06 (lets say, Record date 23nd)

I qualify for the entittlement as I am holding RIO stock on the Record date of the 22nd. 

I get 51 shares @28.29 and pay by the 1st of July

on the 10 July I will be able to sell my 51 shares.

as long as RIO does not tank below $30.29 I am ahead...

Seems to simple and I have spoken to several brokers and friends and no one really can give me a difinitive answer

Benwex


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## bonkerrs (16 June 2009)

benwex said:


> Am I missing something please????
> 
> I bought 100 RIO today the 16th for $72.06 (Record date 22nd)
> I sell my 100 RIO shares for $70.06 (lets say, Record date 23nd)
> ...



I think you get 52 shares!

Sounds pretty right to me. That's what I intend to do but might apply for more then my entitlement (if I can).


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## skyQuake (16 June 2009)

benwex said:


> Am I missing something please????
> 
> I bought 100 RIO today the 16th for $72.06 (Record date 22nd)
> I sell my 100 RIO shares for $70.06 (lets say, Record date 23nd)
> ...




Refer to Oldblue's post above. RIO will be priced ex-rights at around $56 so its not free money 
If your broker can't answer that truthfully (they might just be looking at commissions) then I think it might be time for you to change brokers!


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## gfresh (17 June 2009)

gfresh said:


> Unsure of the value of the buying in for rights issue for profit at present prices...
> 
> etc.. meaning avg buy price of $57.59 is poor.




indeed  could have bought on market for ~$57 if you wished this morning now it's gone ex-rights. Unfortunately buying after the announcement at above $70 and holding was not beneficial.


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## vincent191 (17 June 2009)

Besides ringing up my broker where else can i findout what the rights are trading at. Anything on Commsec?


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## alter1217 (17 June 2009)

I'm with comsec. Do we only get to trade the rights on the 22nd or something after T+3? It's still not on comsec........................


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## JAS81 (17 June 2009)

alter1217 said:


> I'm with comsec. Do we only get to trade the rights on the 22nd or something after T+3? It's still not on comsec........................




the code is RIOR - go forth and buy and sell. You should be able to calculate your entitlement based on your current holding.

make sure you read the entitlemnt doc on how to dispose of rights from a CHESS holding though.


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## alter1217 (17 June 2009)

JAS81 said:


> the code is RIOR - go forth and buy and sell. You should be able to calculate your entitlement based on your current holding.




I tried to place a sell order of $35 for 47 rights (based on my entitlement) just to see what happens and comsec tells me "insufficient CHESS holdings"...


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## SilverRanger (17 June 2009)

Anyone knows when the rights are actually tradable? 
I know the trading of rights is commencing today (17th) but they don't appear in my portfolio


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## JAS81 (17 June 2009)

alter1217 said:


> I tried to place a sell order of $35 for 47 rights (based on my entitlement) just to see what happens and comsec tells me "insufficient CHESS holdings"...




Sorry - must be mis-information then. Try the Rio Shareholder helpline 1800 813 292.

they will be able to tell you if they arrive T+3


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## oldblue (17 June 2009)

oldblue said:


> That's correct.
> 
> And the theoretical rights price is $29.47. ($57.76 - $28.29). It will be interesting to see how close to these prices the ex issue shares and rights open tomorrow.




Head shares and rights are trading close to theoretical values.

Heads at $57.82 when I last looked, rights at $29.60.

No screaming bargains yet!


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## jinx888 (17 June 2009)

RioR seems pretty liquid, i dont think you will be able to take advatange of arbitrage with the rights issue. Then again it could succumb to selling pressure on the last day.


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## oldblue (17 June 2009)

jinx888 said:


> RioR seems pretty liquid, i dont think you will be able to take advatange of arbitrage with the rights issue. Then again it could succumb to selling pressure on the last day.




That's probably right. 
Too many eagle eyes watching that situation and the rights only trade for a week. I'm looking more for an overall weakening of the shares/rights but the chances of that look pretty slim too.


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## vincent191 (17 June 2009)

I will be looking at buying the shares outright (if the price is right) rather than muck around buying the rights. If the difference is only 10 or 20 cents I rather not take the risk in buying the rights and then risk something mucks up and lose the $30 for each right.


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## jinx888 (17 June 2009)

vincent191 said:


> I will be looking at buying the shares outright (if the price is right) rather than muck around buying the rights. If the difference is only 10 or 20 cents I rather not take the risk in buying the rights and then risk something mucks up and lose the $30 for each right.




Sometimes the price of the rights is overpriced. You can always sell the rights then buy the shares instead. You have to watch constantly, there was a pricing difference of around 50 cents at one stage, altho you have to be quick timed, not really worth it unless u have larger holdings.


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## murrayt (17 June 2009)

On 16 June 2009 Rio issued the linked letter: imagesignal.comsec.com.au/asxdata/20090616/pdf/00961065.pdf

Question. It mentions that persons registered as holding Rio Tinto Limited shares
as at 7.00pm on 22 June 2009 (Melbourne time) (the Rio Tinto Limited Record Date) and who are eligible to participate in respect of those shares may subscribe for 21 new Rio Tinto Limited ordinary shares (New Rio Tinto Limited Shares) for every 40 Rio Tinto Limited shares held as at the Rio Tinto Limited Record Date at a price of A$28.29 for each New Rio Tinto Limited Share,
subject to the restrictions set out (see letter).

I'm fairly new to this and do not understand (a) why the expected price correction happened today (17 June) and (b) can I keep buying Rio up until the time and date mentioned and qualify.

Appreciate a simple explanation.
Murray


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## alter1217 (17 June 2009)

Okay I've got this cleared up.
from http://www.commsec.info/riorightsissue/apply.aspx


> Option 2
> 
> You wish to sell your RIO Rights
> In order to sell your RIO Rights you will need to contact the CommSec Call Centre on 13 15 19 and select option #8 from the menu.
> ...




So yeah... that's what comsec ppl have to do if they want to sell 'em


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## oldblue (17 June 2009)

Hi Murray.

The shares were quoted ex rights today, ie anyone buying does so without getting the rights.

The delay in sending out entitlements is because yesterday's trades which were made cum rights, don't get settled until Friday, 19 June ( "T+3"). So the register isn't updated until after close of business on Friday.


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## murrayt (17 June 2009)

Thanks for that. 
Another simple question (I'm Sure)
How does one now value a portfolio? 
I'm trying to add extra function to my excel spread sheet to handle rights.

Lets assume I only hold 100 Rio Tinto Shares bought at $70.00
and 100 Rio Tinto Shares bought today at $58.00
In a few days I will get the rights and assuming the share price is still $58.00 

This was my guess:

```
Qty    Tic         Buy             Price         Mkt  Val              Profit
100     RIO       $70.00           $58.00        $5800               -$1200 
100     RIO       $58.00           $58.00        $5800               $0
51      RIOR      $0               $28.29        $1640.82            $1648.82
```

however I'm now thinking the RIOR price will actually be close to the rio price less $28.29

Murray


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## eugene (17 June 2009)

jinx888 said:


> Sometimes the price of the rights is overpriced. You can always sell the rights then buy the shares instead. You have to watch constantly, there was a pricing difference of around 50 cents at one stage, altho you have to be quick timed, not really worth it unless u have larger holdings.





Sometime around 9 July one RIO Right (RIOR) becomes one RIO share, right [sic!] ?

So I have two questions:

1: If you want further exposure to RIO in your portfolio, why would you not take up your rights as the cheapest means of doing so?  Buying one RIO share means you pay nearly double for the end (9 July) result: one RIO share.  (Moreover, you risk a loss if the current 57-58 price trades lower from 9 July onwards  (in my mind a distinct possibility).

2: If you want further exposure to RIO (and have exhausted your opportunity under (1) above [sic!], or you don't currently hold and therefore have no rights to take up), why would you buy RIO at 57-58 instead of RIOR (until 24 June) at 29-30?  Again given that 1 RIOR = 1 RIO at around 9 July.

eugene


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## skyQuake (17 June 2009)

eugene said:


> Sometime around 9 July one RIO Right (RIOR) becomes one RIO share, right [sic!] ?
> 
> So I have two questions:
> 
> ...




Because the RIOR is like an option, its not a proper rio share. To simplify, Its the ability to buy rio @ $28.29.


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## oldblue (17 June 2009)

murrayt said:


> Thanks for that.
> Another simple question (I'm Sure)
> How does one now value a portfolio?
> I'm trying to add extra function to my excel spread sheet to handle rights.
> ...




I would do it by getting an average cost over your total RIO holding, ie the shares bought cum rights plus the application money for the rights taken up plus the shares bought ex rights. Unless you've sold any shares ex rights you don't have a realised profit, just a paper one.
At this stage you can assume that you've paid the application money - although you havn't - for purposes of calculating your paper profit at any time. Once the new shares are paid up they will rank equally with the old ones so there will be no price difference.


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## oldblue (17 June 2009)

eugene said:


> Sometime around 9 July one RIO Right (RIOR) becomes one RIO share, right [sic!] ?
> 
> So I have two questions:
> 
> ...





1 RIOR won't equal 1 RIO unless the buyer of the RIOR also pays $28.29c to the company.
The reason for buying RIO cum issue was to avoid having to buy RIOR on market. It's a bit confusing because the RIOR market price is very close to the application price of $28.29c but that's just a coincidence!


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## murrayt (17 June 2009)

oldblue said:


> I would do it by getting an average cost over your total RIO holding, ie the shares bought cum rights plus the application money for the rights taken up plus the shares bought ex rights. Unless you've sold any shares ex rights you don't have a realised profit, just a paper one.
> At this stage you can assume that you've paid the application money - although you havn't - for purposes of calculating your paper profit at any time. Once the new shares are paid up they will rank equally with the old ones so there will be no price difference.




Thanks oldblue. I will take up the rights...if all looks well for them at the time.

regards

Murray.................................................................


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## oldblue (17 June 2009)

murrayt said:


> Thanks oldblue. I will take up the rights...if all looks well for them at the time.
> 
> regards
> 
> Murray.................................................................




I'm sure you're on to this but whatever you do don't let the rights lapse! They are very valuable and only trade until 24 June so you don't have a lot of time to decide whether to take them up or sell them.


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## lianeisme (17 June 2009)

Help me please I'm confused but I guess a lot of people are.
why would you pay $31.00 to by a right to buy a share at $28.29 when you could have bought a full share for less on the trading market today. I'm only new to this but is there some reason people do this? that I don't understand. Are there people out there buying these rights thinking they have bought a whole share like the mum and dad investors ?


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## oldblue (17 June 2009)

lianeisme said:


> Help me please I'm confused but I guess a lot of people are.
> why would you pay $31.00 to by a right to buy a share at $28.29 when you could have bought a full share for less on the trading market today. I'm only new to this but is there some reason people do this? that I don't understand. Are there people out there buying these rights thinking they have bought a whole share like the mum and dad investors ?




No, I don't think so. It's just a dynamic market.

At one stage today someone paid $59.80 for the heads which is a theoretical rights equivalent of $31.51.
It's just supply and demand and the way that shareprices move around, particularly when rights trading is condensed into a short period as in this case. ( Trading ceases 24 June).


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## vincent191 (17 June 2009)

A lot of people are very confused. I am sure when the smoke clears we are going to hear a few screams.

Very, very simply if you have rights that you do not wish to take up....sell it. Like Oldblue has pointed out above they are very very valuable and worth around $30 each at the close of business today.

If you want to buy RIO shares and do not fully understand the situation go and buy the shares on the open market.

If in doubt RING YOUR BROKER !!!


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## RIOINUSA (18 June 2009)

Greetings to all .......

I hold shares of Rio on the NYSE listed as RTP and it's been on a great run for 6 months or so. The last several days it's dropped from $200 usd to 170 today or - (15%). This is the largest drop over this time period and the DOW seems to be correcting downward after a 30% recovery since March.  The fall in RIO price has outpaced this correction. All the news prior to the new rights issue seemed to bolster the price, especially the canning of the Chinese deal and the joint venture with BHP.  I am more than nervous but want to hold because I think RIO a great company. All I can gather from RIO investor website is that the rights issue will not be offered in the US but they may consider a compensation at a later date. 

I'm asking for some insight from any of you on what you think the stock "should do" on NYSE as it doesn't seem to completely react the way one would expect. I was looking eventually for a price above $300 at "full economic recovery" if and when that ever happens. Do you think the current 4 day drop is just American investors trading down on "news" and reacting as they would to a US company issuing a secondary stock offer? Or is the market discounting the price and should I expect it to adjust at a 40% reduction? 

Sorry to be long winded, just wanted as much "what the hell?" in here as possible.

Cheers, Scott


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## oldblue (18 June 2009)

The short answer is that RIO shares have dropped wherever they or their equivalent securities are traded, because they no longer have the valuable new issue rights attached to them.
Unfortunately, rules and laws don't allow RIO to offer the new issue to USA holders ( and those in a lot of other countries). But the securities price gets affected just the same because there is now going to be a lot more RIO stock around.
The good news is that the solution to RIO's problems, via the issue, has been well received and the company's future looks a lot brighter.

Just IMO.


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## zarfius (18 June 2009)

Hi guys

As many others are, I'm a bit confused.

I bought 24 x RIO shares @ $77 on 12 June. According to etrade my settle date was the 17th.

Firstly, did I make it. Am I entitled to the rights issue? And if so do I simply buy my share of RIOR (12 by my calculations). I've heard people mention that I can sell my rights, is this possible via etrade or do I have to do it some other way?

I'm trying to do my own research but I'm also freaking out because of the short time period.


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## gfresh (18 June 2009)

RIOINUSA said:


> Sorry to be long winded, just wanted as much "what the hell?" in here as possible.




There was also some uncertain guidance on prices for iron ore sales issued at the same time they went ex.. Which would have negatively impacted the stock. They're selling 50% of their ore at spot on the spot market, and the spot price is currently below the contract price. This tends to indicate they are having trouble securing longer-term contracts at good prices which would give it some more stability at the moment (imho)

http://www.businessspectator.com.au...in-due-to-pricing-T3C4G?OpenDocument&src=srch


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## bonkerrs (18 June 2009)

Just waiting for the letter from RIO to arrive in the mail so I can subscribe for my entitlement to the 28.29 per shares offer. I guess this will happen soon after Monday (22nd June).


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## oldblue (18 June 2009)

zarfius said:


> Hi guys
> 
> As many others are, I'm a bit confused.
> 
> ...




If you bought on 12 June there is no doubt that you bought cum issue and are entitled to the rights.

Because RIO are sending out the entitlement letters in two groups, yours won't be posted until 26 June ( the first lot went out on 16 June ) but you have until 1 July to accept. Not a lot of time!

If however, you want to sell your rights you will need to do so by 24 June, ie before you get your letter!
You'll need to talk to your broker or etrade, whoever you bought the shares through.


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## bonkerrs (18 June 2009)

oldblue said:


> Because RIO are sending out the entitlement letters in two groups, yours won't be posted until 26 June ( the first lot went out on 16 June ) but you have until 1 July to accept. Not a lot of time!



OK thanks! I will action it pretty quickly anyway so no worries with the short amount of time.



oldblue said:


> If however, you want to sell your rights you will need to do so by 24 June, ie before you get your letter!
> You'll need to talk to your broker or etrade, whoever you bought the shares through.



 I didn't even consider this, so much talk about it in the last couple of pages here... sounds too complicated for me - happy to wait!


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## Binxx (18 June 2009)

oldblue said:


> If you bought on 12 June there is no doubt that you bought cum issue and are entitled to the rights.





oldblue, I thought one must buy a minimum of 40 shares to be entitled to the 21 and these entitlement shares get rounded down. For eg, if you have 100 RIO on the applicable date then you are entitled to 52.52 = 52 shares


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## oldblue (18 June 2009)

Binxx said:


> oldblue, I thought one must buy a minimum of 40 shares to be entitled to the 21 and these entitlement shares get rounded down. For eg, if you have 100 RIO on the applicable date then you are entitled to 52.52 = 52 shares




I understand that 21 for 40 is only the ratio and that it's  the resultant fraction that gets rounded down.
But happy to be corrected on that. Has anyone received an entitlement from holding less than 40 shares? Bearing in mind that the first posting only went out on 16 June for those " on record" at 11 June.


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## zarfius (18 June 2009)

oldblue said:


> I understand that 21 for 40 is only the ratio and that it's  the resultant fraction that gets rounded down.
> But happy to be corrected on that. Has anyone received an entitlement from holding less than 40 shares? Bearing in mind that the first posting only went out on 16 June for those " on record" at 11 June.




This appears on page 6 of the Offer Document available on Etrade:

"Whilst the Rio Tinto Limited Rights Issue is being made at an offer ratio of 21 New Rio Tinto Limited Shares for every 40 Rio Tinto Limited Shares held, there is no minimum holding of Rio Tinto Limited Shares required for you to participate in the Rio Tinto Limited Rights Issue, subject to the rounding provisions described below."


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## bennib0i (18 June 2009)

oldblue said:


> Has anyone received an entitlement from holding less than 40 shares? Bearing in mind that the first posting only went out on 16 June for those " on record" at 11 June.




Hi all, my parents sold alot of their rio shares during the year and only had 27 left.....dunno why..but anyway they have held these 27 shares since the start of the year and got a letter offering 14 new rio shares. 

That answers your question in that the offer rounded down from 14.1 shares to 14.

My parents are very confused on what to do. From what others have said in this tread: is the best and simplest option just to pay the $28.29 to rio via the entitlement letter? or is there a better alternative?

Thx, Ben.


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## oldblue (18 June 2009)

bennib0i said:


> Hi all, my parents sold alot of their rio shares during the year and only had 27 left.....dunno why..but anyway they have held these 27 shares since the start of the year and got a letter offering 14 new rio shares.
> 
> That answers your question in that the offer rounded down from 14.1 shares to 14.
> 
> ...




We're not allowed to give advice on this forum but if it was me I'd think that the brokerage on the sale of 14 rights would take too big a chunk of the proceeds.
So I'd take up the shares because I think the company has good future prospects. If I could afford it I'd seriously consider buying a few more rights but if so would need to move fairly sharply as rights trading ends on 24 June.


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## bonkerrs (18 June 2009)

oldblue said:


> We're not allowed to give advice on this forum but if it was me I'd think that the brokerage on the sale of 14 rights would take too big a chunk of the proceeds.
> So I'd take up the shares because I think the company has good future prospects. If I could afford it I'd seriously consider buying a few more rights but if so would need to move fairly sharply as rights trading ends on 24 June.



WHAT!! I have to buy more rights ($28.29/share) if I want more then my allocated amount?! Sorry, I haven't really taken much interest in the recent discussion.

I definitely want more then my allocated allotment... thought I could do this through applying with the BPay method when I take up my entitlement.

Do I need to buy the rights as what has been discussed here ie: RIOR?


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## skyQuake (18 June 2009)

oldblue said:


> We're not allowed to give advice on this forum but if it was me I'd think that the brokerage on the sale of 14 rights would take too big a chunk of the proceeds.
> So I'd take up the shares because I think the company has good future prospects. If I could afford it I'd seriously consider buying a few more rights but if so would need to move fairly sharply as rights trading ends on 24 June.




I think the RIO offer stated that you can convert your rights to full share by paying 28.29 to rio and you will get your shares without paying brokerage.


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## JAS81 (18 June 2009)

bonkerrs said:


> WHAT!! I have to buy more rights ($28.29/share) if I want more then my allocated amount?! Sorry, I haven't really taken much interest in the recent discussion.
> 
> I definitely want more then my allocated allotment... thought I could do this through applying with the BPay method when I take up my entitlement.
> 
> Do I need to buy the rights as what has been discussed here ie: RIOR?




The RIOR price has been tracking the RIO (XR).... so unless that changes it doesnt make much sense to me to buy the rights as you will have to go through the hassel of applying for them, when you could just buy the end result for the same cost.. Unless im missing something?? 

if you bpay more than your entitlment they will refund you without inetrest..

^^^ so you get free brokerage if you buy the RIOR rights? is that the difference?


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## bonkerrs (18 June 2009)

JAS81 said:


> The RIOR price has been tracking the RIO (XR).... so unless that changes it doesnt make much sense to me to buy the rights as you will have to go through the hassel of applying for them, when you could just buy the end result for the same cost!! Unless im missing something??
> 
> if you bpay more than your entitlment they will refund you without inetrest..



Playing catch up now with the recent discussion.

Just called RIO and was told: to get more rights then my entitlement I have to buy it on the market (RIOR). Cannot apply for it.

Have to buy the rights (RIOR closed at 24.42) at market price then buy the shares (RIO) by paying $28.29 on top of the price of the rights. So you're basically paying $52.71 per share. However, RIO is trading at $52.64 (close price). Buy outright shares.

BTW, in regards to rights (RIOR) - who do you pay the 28.29 to?


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## JAS81 (18 June 2009)

bonkerrs said:


> Playing catch up now with the recent discussion.
> 
> Just called RIO and was told: to get more rights then my entitlement I have to buy it on the market (RIOR). Cannot apply for it.
> 
> ...




That bit you pay to RIO - i.e. bpay... either or - I would have been better off selling my Rio shares prior to 12 june and avoiding the share offer. live and learn I guess.


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## zarfius (18 June 2009)

What's likely to happen if you do nothing and let the offer lapse?

Would the price of RIO go back up to the $75 mark or would you get some sort of compensation?


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## JAS81 (18 June 2009)

zarfius said:


> What's likely to happen if you do nothing and let the offer lapse?
> 
> Would the price of RIO go back up to the $75 mark or would you get some sort of compensation?




if you let your rights lapse then the get sold on the market and you may get some money for them. Its discussed in the offer document which can be accessed on RIO's website.


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## hoggy (18 June 2009)

Hi everyone 

Ok, so I'm a complete novice with the stock market. I purchased 86 shares of Rio Tinto on the 17th June for $57.9? I spent roughly 5k. Can someone please tell me if I have made a huge mistake. I saw the stock fall by 20% and though "hey why not buy" however I had no idea of this dilution of share prices. Im only 18 yrs old and bought these during uni exam period (wasn't the greatest idea in hindsight). I am not asking for financial advice as I know this is illegal but was this a good or extremely bad move in your opinion? Should I keep these stocks (will they go back up - if so please take a guess when) or should I sell them immediately? Please laugh on my account everyone, I am a complete newbie


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## drsmith (18 June 2009)

hoggy said:


> Please laugh on my account everyone, I am a complete newbie



They will go up when the price starts to rise.

Laughing over the best forecast I can offer is to say RIO will still be around (in some form or another) long after you have finished your degree.


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## andione1983 (19 June 2009)

Dr Smith i like your pic... 

are you going to tell me im a bubble headed boobie?..........


and ion the RIO front, i think they will go back up too , i would just be patient. no point selling them now.


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## oldblue (19 June 2009)

No need to laugh at anyone, hoggy.


RIO shares adjusted for the fact that they no longer had the rights attached to buy the new issue at $28.29.
 You'll note that the "old" shares are now selling for roughly the sum of the price that the rights are trading at, plus the $28.29 that holders of the rights need to pay to the company.

No guesses on what the price might do from day to day but RIO shares are a good investment, IMO.


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## VViCKiD (19 June 2009)

Has anyone received their share entitlement form in the mail yet ? I still haven't received mine ...  i don't want to miss this ..


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## FNQTrader (19 June 2009)

you don't necessarily have to wait to receive your letter to do anything with the rights - you can log in and download an electronic copy of the offer letter - specific to your holding and go from there - i.e if you just bought and are worried about running out of time once the T+3 completes - waiting for the mail to come - you can get the documents electronically and save yourself a couple of days. Am finding out the detail on this (my Dad did this the other day (with his RIO holdings) and i've asked him for the details) and I will put it up unless someone else who knows puts it up beforehand.

Edit: - don't have the full detail yet - but looks like you log in via the Rio Tinto site itself using your HIN number


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## JAS81 (19 June 2009)

FNQTrader said:


> you don't necessarily have to wait to receive your letter to do anything with the rights - you can log in and download an electronic copy of the offer letter - specific to your holding and go from there - i.e if you just bought and are worried about running out of time once the T+3 completes - waiting for the mail to come - you can get the documents electronically and save yourself a couple of days. Am finding out the detail on this (my Dad did this the other day (with his RIO holdings) and i've asked him for the details) and I will put it up unless someone else who knows puts it up beforehand.
> 
> Edit: - don't have the full detail yet - but looks like you log in via the Rio Tinto site itself using your HIN number




If you want the forms - just get them here:

http://www.riotinto.com/rightsissue/ENG/investors/722_rio_tinto_limited.asp

once in computershare go to holding statements and click on the download pdf.


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## bonkerrs (19 June 2009)

Like oldblue said in an earlier post and on a couple of different RIO docs. They are doing 2 mail outs for the forms...

16 June 2009
Dispatch of the Rio Tinto Limited Entitlement and Acceptance Forms and related materials to Rio Tinto Limited Shareholders as at the Rio Tinto Limited

26 June 2009
Second posting of Rio Tinto Limited Entitlement and Acceptance Forms and (where applicable) the Australian Offer Document to Qualifying Rio Tinto Limited Shareholders (where required) completed(1)

The above dates were from here: http://www.riotinto.com/rightsissue/ENG/investors/722_rio_tinto_limited.asp


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## zarfius (19 June 2009)

hoggy said:


> Hi everyone
> 
> Ok, so I'm a complete novice with the stock market. I purchased 86 shares of Rio Tinto on the 17th June for $57.9? I spent roughly 5k. Can someone please tell me if I have made a huge mistake. I saw the stock fall by 20% and though "hey why not buy" however I had no idea of this dilution of share prices. Im only 18 yrs old and bought these during uni exam period (wasn't the greatest idea in hindsight). I am not asking for financial advice as I know this is illegal but was this a good or extremely bad move in your opinion? Should I keep these stocks (will they go back up - if so please take a guess when) or should I sell them immediately? Please laugh on my account everyone, I am a complete newbie




I'm sure many of us have similar stories from when we first started getting into the stock market 

There's no way to know "for sure" what stocks are going to to in the future, however, there are a few things working in your favor.

Firstly, RIO is a big company that has been around for a long time and has lots of liquidity (many people buy and sell shares everyday).

What this means for you is that you can say with a fair amount of certainty that RIO won't be going out of business anytime soon.

The other factor is that the market is still fairly low relative to the crash in november and march. If history tells us anything it's that the market will recover and big companies like RIO will be apart of that rise.

The real question you need to ask yourself is, how long can you wait? If you have nothing better to do with the money then having it invested seems like a good idea at this point in time.

Of course, this is just my opinion.

P.S. The only thing laughable about your post is that you think we can predict when it will go back up. You guess is as good as ours lol :


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## blanker (19 June 2009)

Today's RIO price is just terrible.....

Thinking of buying more to bring average share price down a little, but big investment for small gain. I didn't expect such a drop.


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## surfziggy (19 June 2009)

I reckon it will come good. Market is in a bit of a pullback phase at the mo' which is compounding the issue. But look at all the other quality outifts that have done cap (in hand) raisings in the last couple of months, there SP has bounced back pretty nicely. BSL is one that springs to mind. My theory is  that the when it gets a good take up the company comes out of it in a better position with less debt and stronger. As a play you need to be able to ride out the bumps for a few weeks I reckon.


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## zarfius (19 June 2009)

surfziggy said:


> look at all the other quality outifts that have done cap (in hand) raisings in the last couple of months




STO perhaps? I don't know how similar the actual capital raising was to RIO but the chart certainly looks similar back in the middle of may to what RIO's chart looks like today.


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## oldblue (19 June 2009)

Fair point, surfziggy.

The point about many of these capital raisings is that although/because they have been done at a substantial discount they have been a success and have restored the company's financial position.

TSE, NPX and CSR are other examples.

The merits of RIO as an investment aren't determined by a few days' trading but it's not a stock I would buy in expectation of a quick killing.


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## Nero64 (19 June 2009)

I see good buying volume coming in over the last three days but it keeps going down. 

Bit surprised how it took off this morning then fell 90c or so from the high. I call it irrational exuberance on market open and it sucks a lot of people in, inc me today then the fade comes in. I need patience. 

If the market holds it will go up slowly. 

If the market goes down it will trickle down slowly provided no more bad news comes out

If good news comes in and the market moves forward then watch out above. 

Great company, great assets but bit of debt. Hasn't seemed to have stopped people from buying it. 

Since announcement

day 1 fall 21%
day 2 fall 9% 
day 3 fall 3.4%
day 4 ?

Have to abide by stop loss on this one. Who knows where it will go short term. Its book value is poor compared to BHP. 


There was an exhaustion selling gap coming in yesterday and it looked as though today would bottom but not sure now. 

The 61.8% Fib retracement level is $48.64. If it goes below this then in fibonacci speak it will continue its down trend.


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## skyQuake (19 June 2009)

Nero64 said:


> I see good buying volume coming in over the last three days but it keeps going down.
> 
> Bit surprised how it took off this morning then fell 90c or so from the high. I call it irrational exuberance on market open and it sucks a lot of people in, inc me today then the fade comes in. I need patience.
> 
> ...




How do you know that wasn't a continuation gap?  
Day 1 actually went down 0.13% adjusted for rights.
Also the fibs are all screwed up now, and some gaps plays too because of the rights adjustment. Some ppl will use the rights adjusted price, and some will not.

The massive downtick in the CSPA may be indicative that the short term big seller is over.

Cheers


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## M34N (19 June 2009)

Well, just closed at a day low today at $50.72, IMO this one is starting to look very attractive at this price and agree with others on it being exacerbated lately, it's just selling compounding the fear of more selling. All throughout this bear-market for the past couple years, a series of severe falls have often been followed by some very nice, short and sharp rebounds... so looking to get in very soon, maybe even on Monday.

From a charting/technical perspective, it broke out of the trading channel/uptrend that has formed over the past 6 months, but I am picking a bit of a bottom here at around this price range, $50 price has proven to be a good area of resistance/support in the past 6 months. If that breaks, next stop $45, and that looks even more solid. Personally I think it's worth a bit of a punt...  Anyone else?


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## M34N (19 June 2009)

skyQuake said:


> How do you know that wasn't a continuation gap?
> Day 1 actually went down 0.13% adjusted for rights.
> Also the fibs are all screwed up now, and some gaps plays too because of the rights adjustment. Some ppl will use the rights adjusted price, and some will not.
> 
> ...




Agree skyQuake, but a lot of other previous capital raising have been pretty successful (as others have mentioned); typically most stocks sell off in the day(s) after the capital raisings and eventually rebound. I'm talking more about a short-term rebound trade for some quick money, not a longer-term trend. Most likely, though, a lot of the sellers have gotten out now and price _should_ rebound a little as others 'bargain-hunt'. I'll be betting on it


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## FNQTrader (19 June 2009)

given it was trading at over $70 before the announcement of the rights issue - and there hasn't really been that much bad out there to justify a $20 fall if you exclude the drop on going ex-rights - it is pretty well oversold for mine. 

next week will be interesting - but i'm going to have to hang on for a bit yet given i came in a bit late.............


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## skyQuake (19 June 2009)

M34N said:


> Agree skyQuake, but a lot of other previous capital raising have been pretty successful (as others have mentioned); typically most stocks sell off in the day(s) after the capital raisings and eventually rebound. I'm talking more about a short-term rebound trade for some quick money, not a longer-term trend. Most likely, though, a lot of the sellers have gotten out now and price _should_ rebound a little as others 'bargain-hunt'. I'll be betting on it




Yup, sure a lot of the others have been successful, but RIO is somewhat different. All the other cap raisings were like this: Halt, record date, announcement, lift halt. This did not give anyone the opportunity to participate that was not already a holder. The RIO offer gave people time to jump in to snag the 'cheap shares'.
Don't forget how well it went on the ex-date, closed down only a tiny bit while BHP and all the other miners tanked.
In a way, it was similar to the BSL cap raising. Up hard, then straight down.

There would be quite a few bargain hunters looking at it though, looking for a cheap re-entry into a fave.


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## zippy69 (19 June 2009)

Hi All
Just want to clear some things.  My daughter holds 20 shares in rio and got the letter saying she can buy 10 rights @ 28.29.  She is going to do that.  So that is all she has to pay? and on the 10th July she will have effectively 30 rio shares @ what ever they are trading for?

Now I can the rights are roughly $20 at the end of days trade, but still have to pay the other 28.29 in a few weeks.


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## bonkerrs (19 June 2009)

zippy69 said:


> Hi All
> Just want to clear some things.  My daughter holds 20 shares in rio and got the letter saying she can buy 10 rights @ 28.29.  She is going to do that.  So that is all she has to pay? and on the 10th July she will have effectively 30 rio shares @ what ever they are trading for?



yep, she can just do a bpay ($282.90) without worrying about mailing anything out, or send form and payment. and yep, 30 shares at market price.


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## bonkerrs (19 June 2009)

zippy69 said:


> Now I can the rights are roughly $20 at the end of days trade, but still have to pay the other 28.29 in a few weeks.



yes that right. rights (rior) closed at 22.60 today. not sure when to pay 28.29 to rio?! could just buy the shares outright - cheaper at the moment!


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## zippy69 (19 June 2009)

bonkerrs said:


> yes that right. rights (rior) closed at 22.60 today. not sure when to pay 28.29 to rio?! could just buy the shares outright - cheaper at the moment!




Thanks, that was what i thought, but just wanted to make sure i had it right.  Will hold out till later in the week and see what happens to both prices
Thanks again


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## drsmith (19 June 2009)

andione1983 said:


> Dr Smith i like your pic...
> 
> are you going to tell me im a bubble headed boobie?..........
> 
> ...



I found the character he portrayed in the first season much more interesting than that of the second and third seasons.

As for robot insults there's quiet a choice.
http://www.geocities.com/sunsetstrip/towers/3332/smith.html

Back on topic if hoggy hangs on for the long term he should indeed have the last laugh.


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## bobby24 (19 June 2009)

Hi everyone
Being a shareholder of RIO with 100 shares that I bought last year I am very confused of what the new rights is all about.

Can someone please explain to me what this new rights is about and also what i need to do with the share rights offer.

I received the rights offer today, and although it comes with lots of information it is telling me I have a right to sell or buy the rights. Not sure what this means to me.

Also, it says if you do nothing by the 1st July, your shares will be diluted. What does that mean? Does this mean they will sell my current 100 RIO shares at market price after 1st July? 

If I pay for the 51 new shares, would that be added to my existing 100 ordinary RIO shares?

I am very confused and need help!
thanks.
Bobby


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## drsmith (19 June 2009)

bobby24 said:


> If I pay for the 51 new shares, would that be added to my existing 100 ordinary RIO shares?
> Bobby



Yes that would be added to your existing 100 shares.

Pages 3 to 16 of the offer document should answer the other questions above.


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## zarfius (20 June 2009)

JAS81 said:


> If you want the forms - just get them here:
> 
> http://www.riotinto.com/rightsissue/ENG/investors/722_rio_tinto_limited.asp
> 
> once in computershare go to holding statements and click on the download pdf.




I tried doing this but the form doesn't seem to be there for me. I should definitly be entitled because I bought my shares on 12 June.

Is anyone else having issues with this?


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## naughtynickers (20 June 2009)

all RIO seem to have done in this phase of tapping the market is confuse the hell out of people i wonder if they know how it works themselves


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## oldblue (20 June 2009)

zarfius said:


> I tried doing this but the form doesn't seem to be there for me. I should definitly be entitled because I bought my shares on 12 June.
> 
> Is anyone else having issues with this?




Yes, it is confusing but RIO are working the entitlements in two chunks.
The record date for the first posting of entitlement letters was 11 June so anyone not on the register at that date but buying before the shares went ex rights will be included in the "second posting".
The record date for the second posting is 22 June and the entitlement letters are due to be posted on 26 June. This doesn't leave a lot of time before the issue closes on 1 July. I imagine that the forms may be accessible electronically before 26 June.

The thing to watch for anyone wanting to sell their rights is that rights trading ends on 24 June. Talk to your broker about this if you don't have the forms.


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## a49002 (20 June 2009)

What happens if I buy additional shares in RIO on Monday, 22nd June, as I am an existing RIO Shares holder and have already received the first Rights issue? 

As long as I buy before close on Monday 22nd June will I be entitled to additional rights shares for this particular purchase?

Many thanks for help with this interesting situation.

Paul


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## Frank D (20 June 2009)

*RIO TINTO:- Technical Analysis *

Since the March lows there was an expectation that RIO was heading 
back towards the Yearly 50% level @ 75.29.

Once it completed the move into the Yearly 50% level  (Stock Report) it 
was time to exit any longs and wait until the 3rd Quarter forms.

The Yearly 50% level can act as resistance, which is also part of 
the breakout pattern in 2008:- retest the break and 50% level in the 
new year:- 2009

The trend of RIO will be defined by the 3rd Quarter 50% level, as was 
the case in 2008.

*We have two plays on RIO for the rest of 2009….*

3rd Quarter UP move towards $94.00

or a down move towards the lower levels and 2009 lows over the next 
3-months

A move down into the Yearly lows is part of the Primary Trend breakout 
from 2008.

*Breakout*:- reversal into the Yearly 50% level and then a 
rejection pattern away from the Yearly 50% level towards new lows over 
the next 2 Quarters.

Two weeks to go until the 3rd Quarter begins and it's simply a matter of trading on the side of the 3rd Quarter 50% level.


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## oldblue (20 June 2009)

a49002 said:


> What happens if I buy additional shares in RIO on Monday, 22nd June, as I am an existing RIO Shares holder and have already received the first Rights issue?
> 
> As long as I buy before close on Monday 22nd June will I be entitled to additional rights shares for this particular purchase?
> 
> ...




 The answer's an emphatic "NO"!

The shares have long gone ex rights. If you want more you have to buy the rights ( and pay another $29.29 to the company ) but the ex rights shares are selling for about that total price anyway.


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## oldblue (20 June 2009)

oldblue said:


> The answer's an emphatic "NO"!
> 
> The shares have long gone ex rights. If you want more you have to buy the rights ( and pay another $29.29 to the company ) but the ex rights shares are selling for about that total price anyway.




This should read  " and pay another $28.29 to the company."



My mistake. Sorry for that.


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## Nero64 (20 June 2009)

> The answer's an emphatic "NO"!




So if you bought RIO below $50 or $40 before the ex date then your getting an awesome deal and a good discount. 

If you bought above ex before $60 and $70 then it is some consolation. 

If you're buying now then your hoping for a bottom and there is no point in buying RIOR because it is trading near RIO anyway (actually there is a small discount)

I think the share issue would've been better 1 month earlier when the US market was peaking, now it is slowly trickling blood in a weak time of the year. Rio needs to bottom in trending up market not a overbought rally which is showing signs of reversing.


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## oldblue (21 June 2009)

My emphatic "No" wasn't to be taken as a vote against buying RIO at today's prices. I don't have a firm view on that except to say that we probably need to see how RIO trades once the issue is out of the way.

My "No" was in answer to the question about whether or not buying head shares last Friday would entitle the buyer to more rights.


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## Lert (21 June 2009)

Has anyone in Perth got their RIO paperwork yet?.. I would have thought being posted on the 16th it should have been here by now..


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## JAS81 (22 June 2009)

Lert said:


> Has anyone in Perth got their RIO paperwork yet?.. I would have thought being posted on the 16th it should have been here by now..




You dont need to wait for the post to arrive.

Get your personalised offer letter here:

https://www-au.computershare.com/Investor/Security/Summary.asp


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## zarfius (24 June 2009)

This thread has been a bit quiet for the last few days. What's going on guys?

I logged into Etrade this morning and I have 12 RIOR sitting in my portfolio with cost basis of 0.00

I still haven't received the letter in the mail and when I checked a few days ago I couldn't get the online version either. I assume I'll get the letter after the second mailout on the 26th.

I've had a pretty big paper loss on this so far since I purchased 24 RIO for 77.86 on 12 June. It's been pretty confusing trying to work out where I stand but as far as I can tell, I'd be about $450 down if I sold all my shares and rights today.

On the other hand if I take up my rights and purchase the 12 shares for 28.29 my average cost would be 61.33 per share (36 shares for a total cost of $2208)

It'll be interesting to see how long before RIO reaches my break even point. Does anyone else have an opinion on this?


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## oldblue (24 June 2009)

zarfius said:


> This thread has been a bit quiet for the last few days. What's going on guys?
> 
> I logged into Etrade this morning and I have 12 RIOR sitting in my portfolio with cost basis of 0.00
> 
> ...




Any opinions on how long it might take the RIO SP to reach your breakeven point of $61.33 would be pure guesses.
For what it's worth, I reckon that RIO at today's levels will prove to be a good investment now that the debt problem appears to be under control. Probably not as good as BHP but that's just IMO.


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## zarfius (24 June 2009)

oldblue said:


> Any opinions on how long it might take the RIO SP to reach your breakeven point of $61.33 would be pure guesses.
> For what it's worth, I reckon that RIO at today's levels will prove to be a good investment now that the debt problem appears to be under control. Probably not as good as BHP but that's just IMO.




To be honest I wasn't really asking anything in particular. I just wanted to share my thoughts and see if anyone is still paying attention.

I also feel that RIO is a decent long term investment at these levels, although that wasn't my intention when I bought. Normally I have a system that I follow for holding or cutting losses. However, this situation doesn't seem to fit my normal strategy and I can't make up my mind yet.


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## oldblue (24 June 2009)

zarfius said:


> To be honest I wasn't really asking anything in particular. I just wanted to share my thoughts and see if anyone is still paying attention.
> 
> I also feel that RIO is a decent long term investment at these levels, although that wasn't my intention when I bought. Normally I have a system that I follow for holding or cutting losses. However, this situation doesn't seem to fit my normal strategy and I can't make up my mind yet.




I'd hate to tell you how many times my short term trades have become long term investments!
I now try to follow a strict rule of letting my profits run and cutting my losses quickly, unless it's a share that I've consciously bought as part of my longterm portfolio. That's still the hardest part, isn't it? - there's always the temptation to leave things alone in the hope that they'll come right.
Looking at things in a positive light, RIO is a share that I'd be happy buying for my longterm portfolio if I had the necessary funds.


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## andygunn (24 June 2009)

Hi... I am following the right issue of RIO... will it affect somebody who does not have any share with RIO before, to buy one now? the share that I am talking about is not RIOR, but it is RIO... because I found the price is quite low currently and there is huge chance it will increase in the future...


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## zarfius (24 June 2009)

andygunn said:


> Hi... I am following the right issue of RIO... will it affect somebody who does not have any share with RIO before, to buy one now? the share that I am talking about is not RIOR, but it is RIO... because I found the price is quite low currently and there is huge chance it will increase in the future...




I'm curious to know how you determine the huge chance that it will increase in the future?

The way I understand it is, the rights issue has increased the number of shares and therefore decreased the value of the existing shares. There are better explanations in previous posts in this thread.


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## Nero64 (24 June 2009)

> I just wanted to share my thoughts and see if anyone is still paying attention.




Yeah I have been watching RIO like a hawk. The $2 gap down yesterday would've gone through a lot of stops. I got stopped out the day before. Some may have repurchased out of an angry reflex which is often the case. 

I was going to buy at $47.34 or so. My heart said yes but my brain said no. It is now $2.26 above that. Volume Rising today which is good. 

This stock has a habit of going for $10 rebounds. Not sure if it will now after this rights issue. Yes it is diluted but it still looks attractive long term.


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## lianeisme (25 June 2009)

I'm new to the stock market and don't understand a whole lot, but I have been buying and selling Rio since November. It has proved to be a nice cash cow. The stock is very predictable  we seem to have decoupled 4 times since November from the world markets. I bought Rio at $46.80 and took up my rights now my average is $40.25 All been said the stock should rise to around 3.87% today. BHP should go to 3.05% it will fluctuate between there today. After 10 July will be the real tell tale on what the stock is going to do that is when all the shares become one. I am trying to average so I actually own these shares and it cost me nothing.


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## Sean K (25 June 2009)

lianeisme said:


> I'm new to the stock market and don't understand a whole lot



 OK



> All been said the stock should rise to around 3.87% today. BHP should go to 3.05% it will fluctuate between there today.



OK 



> I am trying to average so I actually own these shares and it cost me nothing



HUH? 

Looking forward to 3.87 and 3.05%!



This must be Gann analysis right?


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## lianeisme (25 June 2009)

No its my mathematical equations that I have set for myself. Rio closed yesterday at $49.60 it should trade today at around $50.90 to $51.18
As I have said I don't know a lot but this is what I have been doing and it has worked for me.


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## Sean K (25 June 2009)

lianeisme said:


> No its my mathematical equations that I have set for myself. Rio closed yesterday at $49.60 it should trade today at around $50.90 to $51.18
> As I have said I don't know a lot but this is what I have been doing and it has worked for me.



How do you work this out? Very interesting.Surely you are basing this on overseas prices. Would be easy enough to say that. Or?


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## lianeisme (25 June 2009)

I watch the world markets and then do the averaging from there anywhere the stock trades. I have bought and sold rio many times and have actually made$17,780 out of the stock so far so if I really look at the figures RIO now ows me $20.11 per share I hope to own the stock for free by the end of the year


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## Sean K (25 June 2009)

lianeisme said:


> I watch the world markets and then do the averaging from there anywhere the stock trades. I have bought and sold rio many times and have actually made$17,780 out of the stock so far so if I really look at the figures RIO now ows me $20.11 per share I hope to own the stock for free by the end of the year



RIO owes you $20.11 per share.



I think you might be aiming to be free carried by the end of the year.

Well, all the best!

Lets hope that RIO goes where the average of world markets go. As long as you're on the right ride of that equation!


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## Nero64 (25 June 2009)

> All been said the stock should rise to around 3.87% today.




It rose 4.42%. You were pretty close. 

What's your reasoning. Do you look at the UK and U.S. closings then work it out from there or do you look at the rise and fall percentanges and do rough guesses based on commitment and volume.


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## lianeisme (25 June 2009)

Yes I add both uk and NASDAQ then divide by two it gives me the average I then watch the after hours trade on the us market its pretty basic.
With my bank stock I divide by 4.
As I said I really am new to this but it seems to work for me.


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## soren_lorensen (26 June 2009)

LIANEISME

so you are saying that you average the ftse and nasdaq increases from the day before or early in the morning, and say its 3%, you then expect a 3% rise from RIO and then what do you do?

purchase it in the morning and sell in the  afternoon, 

but doesn't the open already have the increase built in, so you would have had to have bought the day before the good performance of the nasdaq and ftse???

thanks for your feedback


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## lianeisme (26 June 2009)

I usually hold for a few days we are constantly getting higher lows and higher highs. If you look at the nasdaq intraday trade you can pin point the rise and the fall in that day for some reason we seem to follow suit. I don't know why but we do.  As I have mentioned we seem to have decouple 4 times since November but it seems to be pretty predictable to me. I'm no expert and people who study all this and have technical stuff happening would problem tear their hair out if they were to comment on what I do.
I am saying spend the next week watching the stock and tell me if you see a pattern.
I think a lot of people make things to complicated


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## lianeisme (26 June 2009)

soren_lorensen said:


> LIANEISME
> 
> so you are saying that you average the ftse and nasdaq increases from the day before or early in the morning, and say its 3%, you then expect a 3% rise from RIO and then what do you do?
> 
> ...




I usually hold for a few days sometime weeks we are constantly getting higher lows and higher highs. If you look at the nasdaq intraday trade you can pin point the rise and the fall in that day for some reason we seem to follow suit. I don't know why but we do.  As I have mentioned we seem to have decouple 4 times since November but it seems to be pretty predictable to me. I'm no expert and people who study all this and have technical stuff happening would problem tear their hair out if they were to comment on what I do.
I am saying spend the next week watching the stock and tell me if you see a pattern. I would like your feedback
I think a lot of people make things to complicated


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## shareprofit (26 June 2009)

soren_lorensen said:


> LIANEISME
> 
> so you are saying that you average the ftse and nasdaq increases from the day before or early in the morning, and say its 3%, you then expect a 3% rise from RIO and then what do you do?
> 
> ...




I'm very new to this site and not even sure if I am doing this post correctly. Only been tradin for 4 yrs... But if the maths were that simple I'm sure many would use that system.

Almost every day I see what I should have bought on yesterday's close, but it has been built into the open and the opportunity is gone. With hard work you can get it right. The other week I got the RIO & BHP move.

I am enjoying the site and will get more involved as I learn more about it.


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## mlee (29 June 2009)

lianeisme said:


> Yes I add both uk and NASDAQ then divide by two it gives me the average I then watch the after hours trade on the us market its pretty basic.
> With my bank stock I divide by 4.
> As I said I really am new to this but it seems to work for me.




Hi, 
I am new to all this stock trading so please be patient with me.

Lianeisme, I am interested in your calculation methods.
Base on the overnight NASDAQ and FTSE indexes on the 24/6, 
  NASDAQ increased by 1.5536% (27.42 points)
  FTSE  increased by 1.182% (50 points)

The average of the above is only 1.3678%, not the 3.87 that you derived. Have I completely misunderstood something??

Would love to understand how you obtain the figure. Thanks in advance.


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## vincent191 (29 June 2009)

Only if it was so easy everybody will be rich. Firstly by looking at the Dow and the Nasdaq you are only looking at the index. Generally the ASX will follow. You cannot translate that movements in the index to a single stock e.g RIO or any of the big 4 banks.

When dealing with averages it is very dangerous. If you put 1 hand in boiling water and 1 hand in ice cold water, on the average you are quite comfortable.


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## skyQuake (29 June 2009)

RIO is a dual listed entity. UK and AUS, the shares are NON-TRANSFERABLE between the two exchange however.

UK RIO plc - http://finance.yahoo.com/q?s=rio.l 

RIO plc shares also trade on the NYSE as ADR (ie so the yanks have access to it)

RIO plc trades in london from Aus time (around) 6pm to 2am.

RTP (the adr shares) http://finance.yahoo.com/q?s=rtp trade from around Midnight to 7am. (Depends on daylight savings, can't remember the exact times)

RIO plc's performance in the UK and in the US are an excellent indicator of what will happen in Aus, whether it gaps up or down etc.


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## mlee (29 June 2009)

Thank you, skyQuake for the explanation.

Using those numbers makes more sense than merely averaging the indexes (that I have done).

Thanks again.


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## Nero64 (29 June 2009)

Just wondering what the NASDAQ has got to do with our market which is weighted heavily with financials and miners. It would seem to make sense to follow the DOW or S&P 500. But then again if your finding success in following the NASDAQ then good luck. Things change though they always do. 

Rio lately has been opening high then falling. Then it rallied. It and BHP set the tone today of and up and down market. Volume weakened siginificantly. If the US Market goes down tonight it could gap under $50.


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## JnrTrader (30 June 2009)

i really think this is a minor correction and the bigger picture is that rio will be >$100 once the market for iron ore recovers and global economic recovery is starting to once again pick up, around 2012. Cant see them falling below the $40 mark, so the benefits outweigh the risks quite a lot i think.


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## Sean K (30 June 2009)

Any chance you guys might like to add some fundamental or technical analysis to support those numbers?

Cheers.


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## JnrTrader (30 June 2009)

kennas said:


> Any chance you guys might like to add some fundamental or technical analysis to support those numbers?
> 
> Cheers.




when rio plummeted to below $30 it  was fear that rio would never be the same which sent it so low. Fear that in order to survive, it would have to sell most of its first class assets.luckily this didint eventuate and now rio will raise up to 15bn to keep the banks happy and rio can keep all their iron ore assets. its now a matter of time for the market to correctly assign a value to rio. markets are never perfect, but, after time they eventually get close enough, this is the basic financial principal for imperfect markets.rio is in the phase of slowly finding its true value. currently the market values rio at 23bn, with the same assets it has now, in mid 08, the market valued them at about 60bn. Of course iron ore(rios major income producing asset) prices have tumbled since, and this is why rio's s.p has tumbled, on top of the rising debt and inablility to pay it off as quick as first anticipated, resulting in greater expeneses. My view is that by 2012 onwards, global demand for iron ore will be in full recovery mode and india will be the new china, rio will not be even able to keep up with suppling this massive country with their iron ore needs and therefore, iron ore prices will be higher than they were before the global recession.  Australia is the closest trading partner to india in terms of the iron ore trade, which will make it cheaper for rio and more appropriate for them to do business with them.  with some very brief and uncertain estimates i must add, once indias demand in iron ore really starts to have an impact, with rio suppling in excess of 200mt of ore at >$150/t, generating  $40-70bn in revenue, then 23bn M.C is not sustainable in the long term.


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## evas34 (1 July 2009)

Chinalco decide to participate into this rights issue at the last minute, does that mean something to the SP of RIO?

http://finance.sina.com.cn/roll/20090701/01212923592.shtml

This page is written in Chinese


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## oldblue (1 July 2009)

evas34 said:


> Chinalco decide to participate into this rights issue at the last minute, does that mean something to the SP of RIO?
> 
> http://finance.sina.com.cn/roll/20090701/01212923592.shtml
> 
> This page is written in Chinese




It's fairly normal for big shareholders to subscribe on the last day. There's a lot of interest foregone ( or interest payment incurred) in paying up millions of dollars any earlier than required.


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## Ziedrich (6 July 2009)

Rio Tinto reaches agreement to sell Alcan Packaging Food Americas division for US$1.2 billion
6 July 2009
Rio Tinto has signed an agreement to sell its Alcan Packaging Food Americas division to Bemis Company, Inc for a total consideration of US$1.2 billion of which US$ 200 million may be in the form of shares in Bemis Company, Inc. Completion of the transaction remains subject to customary closing conditions, including regulatory approvals


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## evas34 (8 July 2009)

looks like the deal have been made with Chinese steel mills. 

http://www.businessspectator.com.au...ron-ore-price-cut---report-TR8NL?OpenDocument


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## RIOINUSA (9 July 2009)

Hello gang! Checked my RIO this a.m. on NYSE at the open (11 hours ago) and my jaw dropped. -15% , 20$ US I thought what the ???? Maybe this was the new price because of the rights issue, but I don't know. Isn't the price supposed to "settle" on the 10th? What do you think? I watch the ASX most of the night over here. I see that RIO was up yesterday for you.  Which way is it expected to go today? 

Thanks from the States......


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## skyQuake (9 July 2009)

Sure you got the right quote?

RIO Ltd doesnt have ADRs in US anymore,
RIO Plc is quoted as RTP

http://www.nyse.com/about/listed/lcddata.html?ticker=RTP


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## Private Trader (9 July 2009)

RIOINUSA said:


> Hello gang! Checked my RIO this a.m. on NYSE at the open (11 hours ago) and my jaw dropped. -15% , 20$ US I thought what the ???? Maybe this was the new price because of the rights issue, but I don't know. Isn't the price supposed to "settle" on the 10th? What do you think? I watch the ASX most of the night over here. I see that RIO was up yesterday for you.  Which way is it expected to go today?
> 
> Thanks from the States......




Talk about a heart attack. To say that im involved with RIO would be to say they Google is invloved in the internet!

Yeah it's just a rights issue payment as you cannot participate in the actual rights issue.

Happy Trading!


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## RIOINUSA (9 July 2009)

skyQuake said:


> Sure you got the right quote?
> 
> RIO Ltd doesnt have ADRs in US anymore,
> RIO Plc is quoted as RTP




That's correct, RTP on NYSE. This is the performance info from 7/8. 


Bid/Size 127.77/0

Ask/Size 129.00/0

Price Open 124.02

*Previous Close 147.29*

Day High 127.59

Day Low 120.00


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## Kremmen (9 July 2009)

JnrTrader said:


> My view is that by 2012 onwards, global demand for iron ore will be in full recovery mode and india will be the new china, rio will not be even able to keep up with suppling this massive country with their iron ore needs and therefore, iron ore prices will be higher than they were before the global recession.



Of course, the length of time is part of the reason for the depressed price. If other companies have more valuable resources and/or will recover more quickly, they are a better investment in the short-medium term than RIO.

Another issue for me is management. A board's primary objective is to maximise shareholder return. Let's see, which does that better, selling out to BHP at about $150/share, or even $100/share, or letting your share price tumble to $30? What wankers. Why would you trust them after a monumental failure like that?

(Yes, I held RIO at their high. Yes, I was waiting to sell when they accepted a takeover offer. Yes, I am bitter that the management was greedy and stupid.)


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## Messenger (10 July 2009)

China accuses Rio staff of bribing steel-makers
Fri Jul 10, 2009 11:03am 

By Rob Taylor

CANBERRA (Reuters) - Chinese security officials accused four detained staff of Anglo-Australian miner Rio Tinto Ltd of bribery on Friday as Australia sought to avert a diplomatic row centring on the massive iron ore trade.

The Shanghai office of China's State Security Bureau accused the three local Rio staff and senior Australian executive Stern Hu of bribing Chinese steelmakers during tense iron ore price negotiations this year, said the China Securities Journal.

"This seriously damaged China's economic security and interests," said the paper, published by the state-run Xinhua news agency. "The activities of Stern Hu and the others violated Chinese law as well as international business morality."

Chinese security authorities arrested the four on Sunday, alleging they were involved in stealing state secrets.

Australia's Prime Minister Kevin Rudd, a Mandarin-speaking China expert, and Foreign Minister Stephen Smith both said Canberra was treading warily after the shock detentions, which have cast a shadow on ties between the two countries.

"Such a serious matter is a matter which goes very much to the relationship between Australia and China, so we are treating this as a very, very sensitive and difficult issue," Smith told reporters in Perth, adding Hu had been well treated.

The arrests come as iron ore talks between the two sides miss a June 30 deadline, and after Rio Tinto ditched a $19.5 billion tie-up with Chinese state metals firm Chinalco last month.

Chinalco, Rio's major shareholder, said the arrests were unrelated to dealings between the two firms and expressed "mutual concern for the current situation with their staff".  Continued...


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## mikes (11 July 2009)

wonder what is the current official and unofficial positions in australia are about paying bribes & backsheesh, and commissions and introduction fees to well connected people in oz, china and rest of world.

disclosure - no rio held now, previously traded out, family owns bhp


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## lianeisme (15 July 2009)

I love RIO, BHP is a good steady stock like Westpac is to finance but RIO really is an exciting stock this is what I predict for today up for RIO 4.165% trading range $50.65 to $51.23  should dip to around lowest point at around 10.57 am today see if I'm right don't ask me how I know I have tried to explain my method earlier in this post I don't use charts its all maths my own method. As I have said I'm no expert. I am learning from all of you.I used to work in Hong Kong the Chinese love gifts nothing gets done without them China is another story have no idea what their take is but there is more to this than the media know.


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## mfsperth (15 July 2009)

Thre is nothing in the recent Rio announcements to the ASX about the Stern Hu issue, and yet this may involve sovereign risk.

Or it may or may not involve dealings which Transparency International would be interested in.  Either way, isn't it time Rio made an announcement to the ASX about what is a significant event?

We need to be reassured that Australian companies competing in China for ore sales do not use unacceptable methods to gain an unfair advantage.


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## Sean K (15 July 2009)

lianeisme said:


> I love RIO, BHP is a good steady stock like Westpac is to finance but RIO really is an exciting stock this is what I predict for today up for RIO 4.165% trading range $50.65 to $51.23  should dip to around lowest point at around 10.57 am today see if I'm right don't ask me how I know I have tried to explain my method earlier in this post I don't use charts its all maths my own method. As I have said I'm no expert. I am learning from all of you.I used to work in Hong Kong the Chinese love gifts nothing gets done without them China is another story have no idea what their take is but there is more to this than the media know.



So, where do I sign up for your magical numbers formula seminar?

It's already hit $49.69, so you're right on the mark!!


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## skyQuake (15 July 2009)

ADRs had +2% ish for RIO, and actually down a bit for BHP.

Rallied quite hard yesterday arvo though..


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## oldblue (15 July 2009)

mfsperth said:


> Thre is nothing in the recent Rio announcements to the ASX about the Stern Hu issue, and yet this may involve sovereign risk.
> 
> Or it may or may not involve dealings which Transparency International would be interested in.  Either way, isn't it time Rio made an announcement to the ASX about what is a significant event?
> 
> We need to be reassured that Australian companies competing in China for ore sales do not use unacceptable methods to gain an unfair advantage.




You're probably right in that RIO should make a formal announcement.

But it's not as if the main facts, or at least a version of them aren't already in the public domain so it's not as if the market is uninformed.
 I can understand the desire not to escalate or inflame the issue by sounding off about it - that won't help anyone - so any statement from RIO is likely to be so moderate as to not add to our knowledge at this point.


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## haunting (15 July 2009)

Messenger said:


> China accuses Rio staff of bribing steel-makers...




** what constitute corruption? Does a gift of notebook PC fall into this category? The "stories" I have read about include the following:

1) the recent Airbus crash off Brazil's coast includes a few Chinese victims, wives and relatives of some Chinese officials who were invited as "guests" by certain company that has large commercial dealing in China. It seems this is one of the "triggers" behind the crack down on corrupt practices in the steel industry in China

2) during the Olympic games, big iron ore producers were found engaging in "questionable" mega dollar "entertainment events" - high officials from various big steel mills were specifically invited to such events - the "gift" items? $1000 per night hotel stay, dine and wine with entertainment provided by singers from shows such as "Cats" and "Mamma Mia", and god knows what else that is not visible in the public eyes

3) top office bearers from various big Chinese steel mills were target hired by the big iron ore producers as their front men as these "local" know how to deal with the system (translated, "gifting" mutual back scratching)

4) the iron ore price last year was about 7-800 per ton, but the smaller to medium size steel mills had to pay up to 1400 to get their stock from the big steel mills that have direct contract with the big producers, netting the big steel mill profit close to 200 bln as the "middleman" in the whole iron ore market chain

The Chinese government is cracking down on their own people and the weakness/corruption in the steel industry. The investigation is still on going. Did Stern Hu or Rio/BHP/Vale involve in malpractice in China? Dunno. It is subjective at this point to say what they are doing is just the "tradition" of doing business in China. May be that's some truth there. But may be it's more appropriate to say that tradition was flawed to start with and by following a flawed tradition does not make the argument sounds right or justified.

But since the Chinese government is not revealing anything, and I doubt if they will reveal publicly the finding, all these news, opinions and conjectures (including mine) are just hearsays and frankly hold very little truth. Are they doing this specifically targeting RIO or the Australian government? In someway yes. But in most way they are just carrying out their own house cleaning.

I would if I find my staffs are working with my rival company working against my interest.

So depending on your own individual bias and prejudice, draw your own conclusion in this matter but keep in mind of this fact - you/I don't know the truth. The Chinese investigation in this matter is still on going, there's every chance that they will not reveal the finding publicly but instead pass on in the quiet to the Australian government. You can bet they will do that to save the Australian government face if there is real and clear evidence against Stern Hu or his employer. Or to save their own face if there is no evidence whatsoever against Stern or Rio.

But let's trust our commonsense, with a history of corrupt business practices in China, esp when mega billion dollar is involved, it will be foolish at this point to assume it's totally guilt free on either side.


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## haunting (15 July 2009)

Anglo-Australian mining giant Rio Tinto has bribed executives from all 16 of China's major steel mills, one of the nation's most prominent state-run newspapers alleges...


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## vincent191 (15 July 2009)

Let us not judge too quickly. "Gifts" is an acceptable way of doing business in China. It is their way of life. We have our Australian values and they have their own values. 

Chinese executives do not get multi million dollars salary & bonus cheques like ours. Australian executives of failed Companies who award themselves multi million bonuses are they not just as  culpable?


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## haunting (15 July 2009)

Corruption charges could mean big Mamma Mia or small mamma mia - depending on the "value" involved  or how one is caught - click me and singalong.


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## Sean K (16 July 2009)

lianeisme said:


> I love RIO, BHP is a good steady stock like Westpac is to finance but RIO really is an exciting stock this is what I predict for today up for RIO 4.165% trading range $50.65 to $51.23  should dip to around lowest point at around 10.57 am today see if I'm right don't ask me how I know I



So, what was the result?

Just one example, but I'm not sure if your black box theory is very sound.


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## vincent191 (16 July 2009)

RIO has been accused of bribing 16 Chinese Steel Mills and I suggest RIO better get Malcom Turnbull to shut the hell up and play this game Kevin Rudd's way. Quietly, quietly through diplomatic channels.

One possible outcome if the Chinese really want to get nasty is to sue RIO in the International court in the Hague to return all the profits made illegally by obtaining an unfair advantage by bribing Chinese officials. This will send shivers down a few spines!!!!!

This is not theory, this sort of action had been done before, not by China but by the Phillipino Government when Marcos got kicked out. The plaintiffs the Phillipino Government,  have won huge payments.

Do it Kevin's way. The Chinese concept of "saving face" is very important. The eyes of the International community is on China and see how they are going to behave. If they use some "underhand" method to satisfy their business goals then it wouldn't look good. Rudd must remind China if they want to look good and gain the respect of the International business community, it must behave in a responsible manner. IMO this is a better approach than behaving like a bull in a China shop.


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## haunting (16 July 2009)

I know I am sounding like a Rio knocker here in this post but never mind, I'd rather speak my mind and feeling sorry later than not speaking at all. If you are an existing RIO investor, you should take note.

1) According to news, RIO, of the big three has been the most vigorous iron ore player in the Chinese market. It has the most extensive sales network among the three and it has been taking a marketing and sales approach of market penetration than profit optimising comparing with the other two. Rio has been extremely successful with this strategy in China to date, mainly due to the good work done by Stern Hu and his team. But ever since the "Spygate" incident and with Stern and his team arrested, there has been  a sea change in the Chinese iron ore market, according to those who are working in the industry and as usual "anonymous" speakers...

2) They said, the Rio sales network is now in complete shutdown or in ruin, which, in the Chinese market, especially among the small to medium size steel mills is the most important sales channel. Without this network, Rio sales will be greatly impacted. To make matter worse, because of the serious implication of  spygate and its potential fallout, in terms of punishment to the "locals", not many steel mills are willing to deal with Rio for fear of being link to the matter. In fact they are saying right now no one is ordering any new stuffs and they are living on their current stockpile, adopting a wait and see attitude. There is extreme fear in the market and everyone is keeping their head low...

Because of spygate, the implication from here would mean life will be extremely difficult for Rio even after the spygate is all settled or buried because the steel mills are worried, if not, fearful of the implication of doing business with Rio and the implication of their state loyalty - which brings up the question on Rio's future - will they do well without the Chinese market?

3) The current business as usual claim by both Rio and BHP, according to these people, the business is mainly about the existing or "old" contract fulfilment. Once these contracts are cleared and comes time to negotiate new ones, it will be a totally new ball game with a different set of time frame and model and possibly vast rule changes. So, it is not a good idea to assume the same old same old will proceed as usual because the next round of talk will be "unprecedented" and outcome at best is completely uncertain, subjecting to many variables, which translated would mean RISK.

There is another element of risk being introduced by the merger of production between Rio/BHP as there is no telling how the Chinese will play their "anti-monopolistic" laws. Many are saying it is a toothless tiger but unless Rio/BHP are willing to gamble on the Chinese market, they should take that more seriously.

4) Here're some numbers - in 2008, the total iron ore sales for Rio in China is 83.38 million tons, representing an 18% growth, constituting 53% of total production. Also in that year, Rio's iron sales had exceeded their copper sales in China, making their iron ore business to be the most profitable unit... question: will the spygate expand to Rio's copper market practices?

5) Now you can take all these with a pinch of salt and ignore their credibility, or you can consider all these are just parts of the fog of war - market disinformation and misinformation - as part and parcel of the game ... but there is one thing you can do to protect your self interest as a Rio investor - watch Rio's share price movement closely. I would describe two possible scenarios you should pay attention to:

5.1) if and when you see a sudden big % plunge in Rio's stock price - that's a sign that big investors are exiting the stock; or

5.2) you begin to see a series of small price decline, a consistent but concerted selling through program selling

Those are the signals you should take heed.

Ok, I am done. Good luck to you lucky Rio investors. Don't say you have not been warned.

Good news week for Rio


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## haunting (16 July 2009)

More good news on Rio...



> _The end result is earnings per share (EPS) forecasts by the broker of US253c this year, US286.1c in 2010 and US298.5c in 2011, which compares to Citi at US241.8c, US321.1c and US336.5c respectively and Deutsche Bank's 2009 and 2010 forecasts of US225c and US307c. Credit Suisse is forecasting EPS of US247.8c in 2009, 231c in 2010 and US323.2c in 2011, showing brokers remain some way apart on their estimates.
> ...
> The average price target according to the FNArena database is $63.50, with a fairly narrow range given Citi is equal top with its target and the lowest in the market is Credit Suisse at $60.00. Shares in Rio Tinto today are stronger in line with the broader market and as at 11.35am the stock was up $2.22 at $52.30. _




** thought it's only fair I put the opposite of my view here for the record. This is the price of sticking out one's neck against the whole gamut of industry experts. 

... do I feel a bit like Don Quixote? You bet!


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## haunting (16 July 2009)

Chinese burn holds more heat than fire

China's just digging itself a deeper hole

Remarkable journalistic insights, gotta say. Thought I like to highlight this - state secrets may be an excuse or a flimsy charge; but corruption is not. Corruption could not happen without two consenting parties. In this case the Chinese are saying there are possibly 16 Chinese steel mill officers involved in accepting bribes from Rio - this is quite easy to prove really because the penalty for these Chinese steel mill officers could mean big sh** if they are found guilty and no one is that stupid as to offer their life as a tool for the state to convict Stern and his staffs. Fair point?

... not sure why these Aussie journos are that "blind"?

Ok, now their Chinese counterparts reporting on the case...

Iron Ore Espionage Allegations Overshadow China Deals in Australia... 

Note the difference between the "free world" journos vs the journos from a "corrupt autocratic system"?


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## lianeisme (17 July 2009)

kennas said:


> So, what was the result?
> 
> Just one example, but I'm not sure if your black box theory is very sound.




The result RIO for that day was open $49.95 High $50.26 Low $49.52
Here is my example for today as I have said I am no expert ts my own way I don't fully understand charts I am trying to teach myself that.
RIO $52.26 to $52.60 will hit its low at around 10.10am  and 11.38am
BHP $34.82 to $35.18 will hit its low at around 10.10am 
CBA $39.00 to $39.33 
WBC $19.95 to $19.99 
Not taking into account any breaking news. Example tax debts to NZ 
or 
Rio detainees are taken out and shot????


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## haunting (17 July 2009)

I have a confession to make here - I am a Rio knocker - go check it out and shoot me if you don't like what I have written.


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## vincent191 (17 July 2009)

BHP has more experience than RIO in the China trade. In fact, BHP is sitting quietly on the sidelines waiting for the RIO cake to fall off the table.

I wouldn't worry about the Chinese steel mill officers. This is not about punishing their own, it is about brinkmanship and an attempt to bring RIO to heel.

I concur with haunting's post. I have been involved in the China trade (steel) for years. The latest news is RIO has already recall some of their executives from China in fear of further reprisals.

Any vaccum that the RIO spygate may create there are plenty of other suppliers to fill in the shortfall and trust me BHP, FMG, Vale & many of the up and coming producers in the Mid West will be more than willing to take up the shortfall.


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## vincent191 (17 July 2009)

haunting....I agree with your views on this situation. As the story unfolds and the public becomes more aware I think this will spell an end to Malcolm Turnbull's politicial career.


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## oldblue (17 July 2009)

haunting said:


> I have a confession to make here - I am a Rio knocker - go check it out and shoot me if you don't like what I have written.




You may well be right.

But how long has it taken you to work out that a declining SP is caused by a heavier weight of selling than buying?


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## haunting (17 July 2009)

oldblue said:


> You may well be right.
> 
> But how long has it taken you to work out that a declining SP is caused by a heavier weight of selling than buying?




I have been spending the last 5 minutes counting my fingers... 1,2,4,3,8,5,6... and guess what? I still don't know how many fingers I have in total - can you ask a simpler question please?


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## haunting (17 July 2009)

vincent191 said:


> haunting....I agree with your views on this situation. As the story unfolds and the public becomes more aware I think this will spell an end to Malcolm Turnbull's politicial career.




**This news is my worst fear! I have been talking about this for quite a while now. If Vale is smart, all they need to do is to give the Chinese a small discount on top of the 33%... say 3-5%, and all Rio's sales will be theirs for the asking! 

After this is done, Vale's next logical move is to get into Rio's copper market and wipe it clean... now where does all these place Rio?

If what I said above were to happen, just wait for this - Aussie recession in the next few quarters.


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## haunting (17 July 2009)

BHP has been playing their hand extremely well thus far. Kudos to them really.


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## vincent191 (17 July 2009)

Vale does not have the excess capacity to jump into RIO's shoes. But a combination of them can take up the slack. Maybe it can be farmed out to BHP, Vale, FMG and a few juniors.

However, IMO I don't see them shutting out RIO completely but they will do enough to force a rethink of the BHP/RIO fe merger.


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## Sean K (17 July 2009)

lianeisme said:


> The result RIO for that day was open $49.95 High $50.26 Low $49.52
> Here is my example for today as I have said I am no expert ts my own way I don't fully understand charts I am trying to teach myself that.
> RIO $52.26 to $52.60 will hit its low at around 10.10am  and 11.38am
> BHP $34.82 to $35.18 will hit its low at around 10.10am
> ...




So, RIO yesterday was wildly incorrect.

Today:

RIO is lower than it was at 10.10, gone lower than 52.26.
BHP went lower than it's 10.10 price, went higher than 35.18.
CBA opened about 39.70. 
WBC has already been to 20.36, still above 20.00.

Score card: 0/5

You should shelve this magical mathmatical projection technique, or keep it to yourself at least. 

Cheers.


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## haunting (17 July 2009)

vincent191 said:


> Vale does not have the excess capacity to jump into RIO's shoes. But a combination of them can take up the slack. Maybe it can be farmed out to BHP, Vale, FMG and a few juniors.
> 
> However, IMO I don't see them shutting out RIO completely but they will do enough to force a rethink of the BHP/RIO fe merger.




You are probably right here. Got to say BHP  has been extraordinarily smart in this game thus far.

Cheers.


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## haunting (17 July 2009)

Export prices plummet, threatening recovery



> _Export prices accelerated their falls in the second quarter dropping 20.6 per cent, following a 4.6 per cent fall in the first quarter of 2009. Analysts surveyed expected a 16 per cent fall in quarterly prices, according to Bloomberg._




** those numbers I think are before spygate blew up in our face, now that the talk between Rio and the Chinese is in limbo and the Chinese is further found engaging in talk with Vale separately, more drop in export is almost a certainty. The question is more like how bad...

These are pretty clear signals that Rio's outlook is getting dimmer by the day... well, jmv, since I am up against a whole market full of analysts... I can't possibly outsmart the whole lots of them, can I?


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## YELNATS (17 July 2009)

Rio have upped the ante. Someone somewhere is going to have a lot of egg on their face, or they're going to lose a considerable amount of it.

Quote 
Home  » Articles  » BREAKING NEWS  » News
Bribery claims without foundation: Rio Mining giant Rio Tinto Ltd says allegations that some of its employees in China have been engaged in bribery are "wholly without foundation".
.
Text size + 
Text size - 
Print
Email
.17.07.2009 12:34 PM 

Mining giant Rio Tinto Ltd says allegations that some of its employees in China have been engaged in bribery are "wholly without foundation".

Chinese authorities claim four employees of the world's third-biggest miner bribed Chinese steel mills officials during annual iron ore contract price negotiations.

Rio Tinto iron ore chief Sam Walsh on Friday bluntly denied the allegations and said the group was continuing to operate in China.

"Rio Tinto believes that the allegations in recent media reports that employees were involved in bribery of officials at Chinese steel mills are wholly without foundation," he said in a statement.

etc.

Unquote


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## vincent191 (17 July 2009)

When are people going to learn to keep their big mouths shut. Corruption & bribery is a way of life in China. To deny any of that ever took place is plain stupid. Why can't they just keep quiet.

Australians may see corruption & bribery as undesirable and "bad" but in certain countries a certain amount of "greasing the palm" is considered as desirable.


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## haunting (17 July 2009)

Story time... no proof and totally hearsays. You draw your own conclusion.

1) Since July iron ore imports into China have begun to slow, with Rio/BHP showing rapid decline whilst the Indian and the Brazilian imports have been increasing.

2) According to ASXMarine, in the first 10 days of July there were only 5 ships loading outside the major iron ore ports, whilst in March, the highest number of ships outside of these ports was 55. The second quarter monthly average was about 40. 

Vale's highest monthly number was 29 back in April. In the first 2 weeks  in July its total has jumped to 24.

3) According to Rio's recent report, its Q2 production figure was 45.16 million tons (plse check, could be wrong),  43% higher than Q1, an increase of 8% overall.

4) Try explain the business as usual comment -  an increase in production, good news, but why a decline in shipping?


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## haunting (17 July 2009)

And this - Trade price slump threatens recovery

[And this And this And this And this And this And this And this And this - are we there yet? 100 chars?]



> _With about half of Australia's national income based on trade, these figures are roughly equivalent to wages and inflation.
> 
> The export price index is like our national wages, it measures the change in the prices we are getting for what we sell.
> 
> ...


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## haunting (18 July 2009)

Here is a follow up - click me!

More hearsays, please take it with a pinch of salt. Alternatively you can search directly through google... in any case, it's caveat emptor here.

1) the recent Chinese iron ore (IO) "restocking" is very much a furphy. The BDI shot up from around 1800 to 3800 starting from April was very much the "contribution" from Rio/BHP - they had been shipping IO to China non-stop with or without any actual orders. The unsold IO is right now sitting in various Chinese ports, as reported here, the total amount is about 68 million tonnes with 26 million tonnes Aussie ore, 17 million Indian and  another 17 million Brazilian. 

The shipping of Aussie IO to China serves two purposes - it helps pushing up the freight rate which again helps to push up the landing cost of Brazilian ore, Right now the Brazilian ore is costing about US25 more in rate than the Aussie, making theirs less competitive. It also helps to "confuse" the Chinese market, giving it an impression of recovery thereby providing "bullets" for the negotiation.

2) Because of the impasse in the negotiation where Rio was offering 20% with the Chinese (CISA) demanding 40-45%, there was some kind of "lock down" by CISA on most of the major Chinese steel mills; but at the same time, these steel mills needed IO for their production and from April to the time Stern Hu was arrested, these steel mills had been buying IO "unofficially" with Rio, at 33% especially after the Japanese-Rio deal was announced. This allowed the big steel mills to "scalp" their excess ore to the small to medium steel mills that didn't have direct access to the producers, usually at a big profit to these big steel mills. The scalping was so profitable that it was rumoured they actually made more money by being scalpers than being steel producers.

On the expense of the small to medium size steel mills, and with serious impact to the Chinese steel consumers, especially the auto makers - quoting CISA here.

The licensed distributors too were into the game, gouging IO to the regional smaller steel mills, that's one reason they are being targeted by CISA, with rumour that 20 odd of these licenses will be withdrawn.

3) To further reduce their stockpile of IO in various Chinese ports, Stern Hu and his team sold direct to the small to medium steel mills which are not under the control of CISA.  They had been very successful in this area. There's a bit of ambiguity on their sales tactic, so, it's best not to dwell on it coz frankly no one knows what really transpired.

4) Here are some observations:

4.1) the sudden drop in shipment from Pilbara probably means right now there is still substantial unsold IO stockpile in China, hence there is no point to ship any more ore there unless there's specific order that is "paid" up front.

4.2) the excess IO stockpile in China would also imply the spot market is near dead, hence there's no auction offer from any of the producers as most of the potential bidders are now "too scare" to make any offer. So no buyer no auction. In addition, any auction offer would probably invite some low bid knocking off chunk from the current spot price.

4.3) CISA is saying negotiation is still on going - meaning, they are playing the attrition game with Rio/BHP. Also there's a recent report saying they are in talk with Vale, which could be true as Vale seems to be increasing their shipment to China. And accordingly Vale has stopped selling in the spot market, hence, it would be safe to assume the increase is meant for long term contract - it probably won't be stretching too far by saying the increment is meant for contracts seeping out of Rio/BHP. But this is just my speculation. No proof, as usual.

4.4) As the impasse drags on with the Chinese holding back deal with the Aussie suppliers and with the spot market near dead, what will happen to the IO stockpile in the various Chinese ports? Can they sit there forever? Is there some kind of rental cost involved? Dunno.

But at some point, I guess, the Chinese would exert pressure on these  Chinese port authority, forcing them to demand action from Rio/BHP to remove these ore from the yards. What will Rio.BHP do? Are they going to ship these ore back or are they going to sell it cheap in the spot market or are they going to press the Chinese to fulfil their long term contract obligations? Dunno either. But one thing for sure, the pressure to do something is mounting.

4.5) Long(er) term? What next? What is going to happen to Rio/BHP's IO, copper, coal, etc...?

The Chinese are saying the Stern Hu affair will not affect both countries' trade but it seems at this moment they are not buying Rio's IO and they seem to be signing up with Vale, the question I like to know is - will it get worse?

Here's some food for thought...


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## oldblue (18 July 2009)

It seems hard to believe that the shipping of Australian iron ore to China, *without sale orders*, and the stockpiling of that ore in Chinese warehouses, would cause the spot price of ore to increase!
Something doesn't add up here.

Not without that large pinch of salt.


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## haunting (18 July 2009)

oldblue said:


> It seems hard to believe that the shipping of Australian iron ore to China, *without sale orders*, and the stockpiling of that ore in Chinese warehouses, would cause the spot price of ore to increase!
> Something doesn't add up here.
> 
> Not without that large pinch of salt.




To tell you the truth - I heard about all these through a tooth fairy last night... what you should do is to find out more from Rio or from your favourite analyst, hey should be able to help you with some sensible answers.

... yeah, one more thing, please go easy on salt if you have blood pressure.


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## long$$ (18 July 2009)

haunting, China got our gas at a very good price. I wonder if that being onsold too? If so Australia can't be blamed for trying to avoid being exploited on iron ore.


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## vincent191 (18 July 2009)

I would indeed need to take a large dose of salt if I am to believe that China is stockpiling substaintial amounts of iron ore.

Iron ore takes up a lot of storage space. Can you imagine stockpiling 100 million tonnes of iron ore in China where space is at a premium? 

I agree there is a certain amount of inventory build up when the price is low but massive stockpiling?? Gold and other precious minerals I believe you can stockpile and try to manupilate the market but iron ore???

I think it is only true to a much smaller extend.


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## haunting (18 July 2009)

vincent191 said:


> I would indeed need to take a large dose of salt if I am to believe that China is stockpiling substaintial amounts of iron ore...




The following is a cut and paste job from the news in Biz Spector. It is quite easy to verify this - just give it time. The next two quarters' report from both Rio/BHP will be telling because I am quite sure the production and sales numbers will reveal what is actually going on. This is something a Rio investors in particular has to pay attention to because of their relatively weak balance sheet.



> _SHANGHAI - Iron ore inventories at major Chinese ports slid one per cent this week, as Australian miners stopped spot sales following the detention of four of Rio Tinto Ltd's China staff, trade sources said.
> 
> Chinese steel mills and trading houses have had to resort to port warehouses as their sole source of spot purchases, with no tender offers by the Australian miners since last week, the sources said.
> 
> Stockpiles fell 670,000 tonnes to 68.65 million tonnes, of which Australian ore fell 1.5 per cent to 26 million tonnes and Indian ore was down 1.8 per cent at 14 million tonnes, industry consultancy Mysteel said on Friday. _


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## haunting (18 July 2009)

long$$ said:


> haunting, China got our gas at a very good price. I wonder if that being onsold too? If so Australia can't be blamed for trying to avoid being exploited on iron ore.




Dunno. I would suggest to you the best way to make use of the info is to weigh it up if you are a Rio investor. You can brush it aside, or you can do your own investigation. After all, it's your money. 

With regard to you question, always remember this - Australia doesn't have to sell anything to China if she doesn't want to because China would be doing the same - she won't have to buy anything from Australia is she doesn't want to.


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## oldblue (18 July 2009)

Chinese steel mills and trading houses have had to resort to port warehouses as their sole source of spot purchases, with no tender offers by the Australian miners since last week, the sources said.
QUOTE.

Shipping iron ore to China without firm orders doesn't seem such a bad idea, from RIO and BHP's point of view, does it!


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## haunting (19 July 2009)

oldblue said:


> Chinese steel mills and trading houses have had to resort to port warehouses as their sole source of spot purchases, with no tender offers by the Australian miners since last week, the sources said.
> QUOTE.
> 
> Shipping iron ore to China without firm orders doesn't seem such a bad idea, from RIO and BHP's point of view, does it!




No. It is in fact quite a good idea at the moment. It's the future you have to watch out for - there's another 26 million tons to clear, whilst the Indian has 14 mln; and the Indian seems to have a higher rate of decline - 1.8% vs 1.5%. Ever watch a Fat Loser competition before? The one that loses most fat wins! I think the Indian is well ahead.

In addition, back on WA shore, 5 ships in last two weeks, do you reckon there is a boom going on over there and is "business as usual"?

No order no ship. No ship no sales. No sales cut production. Cut production = job retrenchment? 

Try looking further and wider. It's the future you are investing in. Not the past.


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## haunting (19 July 2009)

Read it here... click me!



> _China's demand for Australian iron ore softened last week as the federal government received information confirming that four Rio Tinto employees were detained over their role in 2009 iron ore price negotiations.
> 
> While Rio Tinto, the world's second-largest iron ore producer, enjoyed very strong iron ore exports to China during May and June, in the last week iron ore demand from Australian ports softened, according to global shipping market information provider The Baltic Exchange.
> 
> ...




** if the news from the Chinese side is correct, bulk of the Rio ore sent to China back in May/June period was sent there without firm order, and the unsold ore is now "parking" in ware houses in various Chinese ports to the tune of about 26mln tonnes. 

However, there's also an Australian news talking about ships leaving WA shore are ships with "ordered" ore that has been "paid for" according to a set of complex rules 

I guess since it is published in the Australian and from a reputable journo, this news must be "true" and not just a total spin. So yes, let's assume the ore sent to China back in May/June had been paid but yet still available for sales... 

And now, with this latest demand softening in China news but excluding the Brazilian ore... etc, the only sensible conclusion here is frankly this question - what does Rio mean by "business as usual"? Or has the Chinese really shot themselves in the foot? Or it is Rio that is really shooting itself in the foot with millions of ton of ore unsold in China?

Time will tell. But if you think a little deeper, it doesn't make a lot of sense with the information provided - for example, Rio is expecting the demand for IO will pick up in H2 and yet there's no increase shipping activities according to BDI movement... make sense?

And with regard to Stern Hu's case, here's from S.Smith...



> _Foreign Minister Stephen Smith on Sunday said he had received more information from Chinese officials after raising the matter with a Chinese vice foreign minister late last week.
> 
> "It's quite clear they are focusing on a criminal or judicial investigation relating to the 2009 iron ore negotiations,' Mr Smith told ABC Television.
> 
> "They are not interested in what we would regard as espionage or national security matters."_




** a "criminal or judicial investigation", that would make the matter a totally internal Chinese matter and is much easier to convict - not many people realise or want to accept this - the laws governing corruption is quite clear and  well defined over there, but the enforcement of such laws is quite inconsistent. Most times it is carried out selectively giving the official a lot of "leeway" in the final decision. If anyone finds it hard to understand or accept over here, may be it will be easier to grasp if one were to equate that with the Aussie version of official discretion in how the FIRB rules are applied. 

Fair comparison?


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## lianeisme (20 July 2009)

kennas said:


> So, RIO yesterday was wildly incorrect.
> 
> Today:
> 
> ...



You are probably right have no idea why it was so out that day. shhhhh it happens. When I was watching I knew it all went hay wire that day. you win some that day I lost some and how.


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## Sean K (20 July 2009)

lianeisme said:


> You are probably right have no idea why it was so out that day. shhhhh it happens. When I was watching I knew it all went hay wire that day. you win some that day I lost some and how.



Out of interest, how are you applying this information?

Is it determining intraday trading of the stock, or just for interest sake? 

To put energy into this, it needs to have a real purpose, imo.

And, if it has a purpose, what's the point in splashing it up unless you let us in on the details?


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## skyQuake (20 July 2009)

kennas said:


> Out of interest, how are you applying this information?
> 
> Is it determining intraday trading of the stock, or just for interest sake?
> 
> ...




Agree with kennas.

IF you're gonna trade ADRs you should backtest a bit more first. Nothing like forward testing a new system to lose capital and get confusing feedback.


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## haunting (20 July 2009)

China over-plays its hand

** this write up is worth a keep because frankly I would like to come back to revisit the views of these market experts say 6 months down the road where the coast is clear or when the "fog of war" is dispersed.

This is the current "mainstream" thinking in Australia which I got to say is edging near a point where if this were to turn out wrong, Australia and its mining giants will be in for some butt kicking.

1) I am no sure if this is done on purpose or not, there is an over-emphasis on EC's approval on the Rio/BHP merger but completely ignoring the Chinese threat of applying their anti-monopoly legislation, thereby setting up a potential for show down with China should the plan go ahead. 

Based on the many comments from those who really know how the Chinese work, that the arrest of Stern Hu is a warning to Rio and Australia, indicating how serious and how China will play their hand if their security for commodity is threatened, I don't think I would like to take their actions all these while as just plain empty threat.

How much clearer do the Chinese have to make their point clear?

2) There is some kind of spin being sent out on the Chinese spot market for IO here. So far, only half of the IO sent to China has been sold with the remainder still sitting in the warehouse with no official auction.  If there is still Chinese steel mill buying from the market, there is a good chance that they are buying from the Indian and not from the Aussie because of their fear of being linked to the Spygate affair. Can't see how this could be construed as all positive.

3) Even assuming the spot market pricing were to become a fixture instead of contract negotiation, the assumption is still full of flaw because it has not taken into account of what the Chinese are attempting to do at the moment. They are clearing house big time and they are taking a complete audit through the IO market, from the custom dept to all the big steel mills in China through CISA.

The Chinese are so determined to get to the bottom of the whole market and its related manipulation that it is in my view grossly dangerous by assuming business will be as usual in the next IO negotiation and if it were to be deadlocked the spot market will turn up being more advantageous to the big producers. There's no certainty in this claim as far as I can see. Why would it?

The usual readily available market information like production numbers, insider information etc would be hard to come by after the house cleaning; and I doubt if there will be others willing to provide the information to the producers now that they know CISA is watching them closely.

It is really quite foolhardy, if not arrogant to assume it's business as usual, and the big Aussie producers will be better off with a new pricing system. 

In my view, the initiative after the Stern Hu incident will go to the Chinese, it's they will be calling the shot, and not the big IO producers. To push on a tough stand, the Aussie producers are exposing themselves to the potential risk of being completely, if not partially locked out by the Chinese if they were to sign up with Vale, giving all their long term contracts to the Brazilian.

Granted, Vale could not provide all the IO need of the Chinese, but, it will surely make a big dent in the big Aussie if the Chinese were to allot bulk of the Aussie shares to the Brazilian - not sure if this scenario has been considered by this market expert?

In any case, time will tell. I will surely come back to this once the dust is settled. I like to see if these market experts are actually that prescient in their market view - gotta say I am not impressed at this point.


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## lianeisme (20 July 2009)

kennas said:


> Out of interest, how are you applying this information?
> 
> Is it determining intraday trading of the stock, or just for interest sake?
> 
> ...



 I have been trading Bhp and RIO and CBA, FMG and other shares since October
I am currently out of BHP 
I have been buying and selling continually I am in, in a heavy way. So it is more than an interest to me. 
As I have mentioned I don't fully understand charts as yet, however I have been successful with what I have been doing to date.
In my previous posts  under Rio I have outlined a few times what I do and how I do it, its no secret.
What I do  has made some peoples hair stand on end and I have been critised a fair bit. 
As I have said I am learning at times its easy to read the market 
However at this current time with reporting season on it is a little harder as the markets are very jumpy.  Go back and read what I do I have explained it.
I thought it may have interest people to see how I do what I do that's all. I don't mean to offend anyone.


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## haunting (21 July 2009)

1) there is talk of using quota to control the rampant imports of IO into China, this is in direct response to the latest development in the Chinese attempt to "house cleaning", primarily in reaction to Rio/BHP's recent tactic of sending IO to China without a "firm" order; this move will make the current "BS" or "spin" or "fog" being sent out by all the producers id as is - how much is ordered and how much of it has been fulfilled;

2) there is talk of imposing escalating warehouse charges in various Chinese port to control the the amount of IO being imported into China; this will have a direct impact on Aussie IO currently "parking" in various Chinese ports;

3) there is talk of copying the Japanese "model" of IO trade management but the Chinese are well aware of their internal problem and the weak and diverse nature of the steel industries; they acknowledge there is an ingrained weakness due to the many "hidden" and unspoken rules and they have placed that to be one of their priorities in the house cleaning exercise;

4) they are aware the European IO is making a headway to the Chinese market although currently the quantum is still insignificant comparing with the big three;

5) they are aware they have lost the initiative at this point to the producers and they will need to import at least 50% of the IO, the question is more on price management and the pricing model as well as from which producer - with the view that the price is fair for long term supply and growth to the Chinese steel industry;

6) they are aware the current spot market price can be easily manipulated and it does not reflect the true demand from the Chinese steel industry; the two pricing models of spot market pricing and the long term contractual pricing is creating an undesirable impact on the small to medium steel mills; they are also looking at the BHP proposed model but believe it will not work out to their advantage due to the "mess" within their steel sector, primarily a lack of a single voice from a central body to represent the industry - this will be their first priority;

7) more, but based on what is reported, it seems the producers are still in upper hand but a lot will depend on how well the current house cleaning by CISA will result in exerting a real control on the various vested interests within the Chinese steel sector; the point worth considering from the Australian angle is this - there is a need to balance out the cost/benefit of profit maximising for the short term vs the good will and long term sales from the Chinese. The Chinese are fully aware that its' the volume sales that matter most to all three producers (as in all commodities) - this is where they believe their bargaining power lies. 

Right now, they are in eager discussion with Vale, although not confirmed by Vale, it seems the possibility of a deal is looking good - translated, wait and see. Well, let's hope they don't succeed, because if they do, it's bad news for Australia...


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## haunting (23 July 2009)

Brokers Remain Divided On BHP Value

** it seems none of the analysts has factored the "Chinese risk" BHP is exposing itself to with the recent merger proposition. They are potentially ignoring some or all of the ground work the Chinese are currently building in preparation for future price negotiation, starting with IO. There is every chance that this will spread to other commodities like copper, zinc, coal and nickel... let's wait and see.


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## haunting (24 July 2009)

Hu - persona non grata?

** not after he has been found guilty and probably locked up not less than 2 years, this my bet. In any case the emphasis for the Chinese is to clean up their IO market to make sure they are not at the receiving end of continuous price rises. This has been made quite clear by this news report.

They may not be able to turn the table this year, but just give them more time, I am sure the table will turn against the producers.  As far as I am concerned, commodities are "valuable" only if there is demand. Without a market most commodities don't worth the dirt they are sitting on. And the Chinese know this, so are the producers - it's darn silly for Rio/BHP to try cornering the IO market through their merger. If China were to be a smaller market, they could have got away with the move; but with the Chinese market providing 50% of the demand of their products, and not just IO but others like coal and copper which are part of the bread and butter earners for these two, they must be quite mad to try screwing with their biggest customer.

At best, they could lead in the short term but longer term I am quite sure they will be the ones paying the ultimate price, in the process taking all of Australians down with them. They should always remember that China has a centralised authority and they are not dealing with individual company but a big whole business entity called the China Inc... never pick a fight with someone you cannot win, thought they must have heard of this before?

To those who doubt what I am saying, well, let's wait for it. Time will tell... already at this point I am quite sure Rio and BHP are feeling the heat with the sudden plunge in their spot market sales. The latest news from China, and quoting one of the top 10 steel mill purchasing GM, in the whole of July, he has not bought a single tonne of ore from Rio, and he is quite sure that his colleagues are doing the same...

Those that are buying and are maintaining the spot price are probably the really desperate small to medium mills, but, for Rio and BHP, their focus is on volume sales, which, for as long as they are maintaining this attitude of wanting to corner the big Chinese steel mills demanding both high price and volume sales - they are dreaming.

It will not happen. Or if it were to happen this time, it will become much harder the next time and so on until the playing field is reversed, to the advantage of the Chinese, which by then, their knife will be out and they would demand every pound of flesh from Rio/BHP to even the score.

The only way forward for all the parties is to come to a compromise where they should seek to strike a balance between supply and demand, and they should aim for a more equitable trade proposition between both sides. 

Aiming for a 40% price increase year after year consecutively would serve to kill the goose that lays the golden egg. It's totally counter productive for all the parties involved. To make it worse, this goose is not a real goose, it's an elephant!

... now instead of golden egg, they are gonna get some seriously big pile of dung from an angry elephant.


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## haunting (24 July 2009)

Brazil!

** the full title of the news: "Brazil benefits from Hu detention" - how misleading. Hu is just an incidental victim in this game of IO chess. No matter how the media is going to window dress the issue, there is no escaping the reality behind the title - it's the Aussie miners that are being targeted in the Chinese retaliation.

And this just the beginning! (As anticipated in my blog umpteen times! Sad!)

Next, the question, as usual: what's pushing the investors' rush to gobble up these two's shares? I mean both Rio/BHP? It's almost a guarantee that their next quarterly or half yearly report will be under water!

... and until the conflict with China is resolved, there's no guarantee that they will sign up with the Aussie producers in the next round. 

So how? Investing by hope and prayers and then expecting a winning outcome?

Good luck.


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## haunting (25 July 2009)

Stern words for Rio's mess in China

** sure am glad to read this piece - it's all about the big picture and future prosperity for the young...


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## haunting (29 July 2009)

Read the whole news article here...



> _Global miner BHP Billiton Ltd has settled annual contract prices for almost a quarter of its 2009 iron ore volumes and price terms for another 30 per cent.
> 
> Contracts for some 23 per cent of volumes reflect prices that are about 33 per cent lower than last year's price for fines, and 44 per cent lower for iron ore lump.
> 
> ...




*** since I have a bias against the two big iron ore suppliers and am betting their price will go down,  I am not taking this as a good news because thus far, BHP is saying they have only managed to sell 23% of their ore in long term contracts with another 30% yet to be sold through the spot market and/or the index based system.

...but I could be wrong here since I am completely loss on this line -  _"The mining giant said negotiations for about 47 per cent of its iron ore volumes are ongoing."_ - I don't know what it means. Or my guess here is this 47% of the iron ore has no taker thus far and BHP will have to try its luck next time.

If my guess is right then this year's BHP has managed to sell about 53% of its IO at various prices with 47% yet to get any offer. It will be a lean IO year for BHP I think...

Also, regarding the spot market in China, the supply-demand situation may change drastically now that the market knows BHP (and probably Rio) has so much unsold IO, it now has become a buyer's market.

... but we will see, there's no point jumping to any early conclusion.


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## haunting (29 July 2009)

Chinese firms buckle in iron ore price war...



> _"I think this really means that we're going to move on, the Chinese are happy to accept the cut that was originally negotiated with their Japanese steel producing peers."
> 
> The annual contracts so far cover 23 per cent of BHP Billiton's total volume, but in a major break from the past, BHP is relying less on annual contracts, selling 30 per cent of its iron ore volumes through a mix of quarterly contract prices, index prices and market prices set on the spot, or daily, market.
> 
> ...




** we will see if he is right...

The news from China seems to be inching towards the abolishment of the spot market, which basically serves the small steel mills that are unable to get their ores from either the producers or from the bigger steel mills. Also because of the price gouging by the license distributors, quite a few of their license will be withdrawn - if these suggestions were to be implemented, it would mean BHP's preferred method will become a quarterly or half yearly negotiation affair - without the spot market's "misleading" price level since according to the Chinese the spot market price is heavily manipulated by the producers. 

Without the spot price as a form of price indication, BHP will be negotiating with China on purely supply-demand forces and most likely "doing it hard" because the Chinese are expecting a 20% pull back in demand in H2 and they are saying the last 6 months' IO imports did not reflect the actual market demand...

So, let's see if Mr Wendt is right or just spinning for BHP...


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## haunting (31 July 2009)

Iron spot price up as Asia returns

** at spot price of US$100, both Rio/BHP should be rejoicing, but let's see if they are really rejoicing... I like to see that in the H2 report.

Whilst the spot price is at a high, Vale has been singing a slightly different tune... 







> _Yesterday, Vale, which like Rio is yet to announce any price settlements this year with China, flagged further changes.
> 
> It said it had put in place new marketing policies, including more flexible pricing, that were important for its business in China.
> 
> ...




In fact Vale has been making waves on the Chinese TV with star such as Rinaldo "assuring" the Chinese people that Vale is there for the long term and they are not into profit maximising with their IO sales but as a friend to the Chinese and growth together in their march towards greater prosperity...

They even pointed out they have spent US$1.9b buying ship from China just so they can ship and sell their IO cheaper to the Chinese. To make it easier for the Chinese steel mill, Vale will subsidise 20% of the shipping cost, etc....

Grand gesture and right under the Rio/BHP's nose they are stealing the market share away from them. Yes, Brazil is stealing the IO market shares from the Aussie!

I don't know what kind of agreement they will sign with the Chinese but if it is some kind of long term sales contract that locked in the Chinese for a long time... well, well... *&^%$#@!


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## haunting (31 July 2009)

The local analysts' view... click me. 



> _According to Deutsche Bank, the issue with respect to BHP's earnings in the sector is the uncertainty of estimating pricing as while 30% is locked into non-benchmark pricing 47% of output has no price settlement at present. While the broker notes this also provides an opportunity as non-benchmark sales could be increased, so taking advantage of current spot prices, it also means there is significant risk if prices do come down in coming months.
> 
> For Bank of America Merrill Lynch this uncertainty is too great and it maintains a Neutral rating on the stock with a price target of $40.00. Deutsche Bank has a similar Hold recommendation but regards the stock as relatively expensive when compared to both Rio Tinto ((RIO)) and its own valuation..._




** if I am one of these local analysts I would pay more attention to Vale, that's where it matters... thus far, the spins from the local media have been clouding out the "real" issue which concerns the bread and butter of everyone. In almost every news report, I'd noticed the journo would never failed to put a positive spin on what they are reporting. Being patriotic (misguidedly, gotta say) or parochially loyal is one thing, but being objective and truthful and professional in carrying out their duty is another - somehow some seem to have lost their disciplines and have become the mouthpiece of the big enterprises... is this the standard of Aussie journalism?

Worse still, it is quite clear that some local investors are lapping up all these "good news" without really questioning what is being fed to them... 

...anyway, do I care?


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## haunting (31 July 2009)

Chinese says...



> _ China, the world’s largest consumer of iron ore, said suppliers of the steelmaking material have “distorted” the market and disrupted annual contract talks by “massive” selling on the cash market.
> 
> Spot iron ore accounted for about 83 percent of imports this year, the China Iron & Steel Association said today in a statement issued in Beijing. Imports have exceeded actual consumption, leading to “huge” stockpiles at ports, it said.
> 
> ...





** guessing now...

1) expect a cull of the 152 importers;

2) a possibility of abolishing the spot market, once they found a solution to provide for the small steel millers, and the solution could be provided by Vale, as hinted by Vale' s commercial.


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## haunting (1 August 2009)

Who wants to know more about Hu? Click here!



> _"We oppose artificial price increases in international iron ore trading and we oppose monopolistic activity in international iron ore trading," he said.
> ...
> "China and Australia - especially in iron and steel trading - are complementary to each other. Chinese steel enterprises need to import iron ore from Australia; Australia needs to sell iron ore to China," he said.
> 
> "We should make great efforts together to maintain the long-term, healthy, stable development of the iron ore trade which will benefit companies from both countries."..._




** I think he is being polite here... 

1) what he really meant - the Chinese media didn't just beat up the story, they were being used as pawns/plots for disinformation/misinformation by the IO producers in the overall game of IO negotiation

2) the loss in overpaying for IO in the past few years according to the Chinese is in the region of 700b yuan (could be US$ coz the unit measure was very imprecise)

3) they were disappointed by Hu's over zealous attempt in serving his new master and forgot his "root"; to the Chinese, they believe there's no need of Hu to resort to that kind of tactic to make good of his contribution to his company at such a great cost to his fellow "Chinese"

4) they will not give what Marius K wants - an index based quarterly pricing system because they believe the Chinese is running a leaking boat in the IO game due to their internal disorganisation, hence they will opt for long term contractual pricing. Whoever, that is, whoever among the big three IO producers is willing to meet them half way will get the deal - translated, if the Rio/BHP team is willing to work with them like Vale does, they are willing to engage them (Rio/BHP), as indicated by the comments he made on mutual needs between the two countries. 

But it is also quite clear that they, the Chinese will not compromise themselves on the past "monopolistic" manoeuvres by the IO producers. In fact, if this matter has risen all the way to the top echelon of the Chinese leadership, there's no way for any compromise for the Chinese negotiators under such circumstance, due to the fact that many big IO steel mills in China, including Baosteel, the chief negotiator in the past had been making much more money through IO scalping has not escaped close scrutiny by the Chinese leadership. The punishment for big time corruption could be very severe, which would make the any back down looks suspicious and for  those who were willing "leaker" to undermine the IO negotiation to seriously pull back their horns regardless how much guanxi or backing they have. Their heads are on the line here.

The recent raising of steel price by Baosteel has been rumoured as their "show of force" to CISA, as that indirectly had put more pressure on CISA to accept the 33% offer, but based on  CISA's reaction to all these pressures, and its steadfast refusal to budge indicates many "Chinese eyes" are watching, esp those at the top, at the situation with serious consequences to the Chinese negotiators. That however does not mean there's no serious consequences to the Australian IO producers... judging by all the song and dance act and the charm offensives made by Vale in pledging their sincerity for mutual benefits and to march in step with the Chinese  objectives.

5) back to Rio/BHP - do they want to play ball with the Chinese? Or not?


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## matty2.0 (2 August 2009)

Mate ... market is bullish on rio ... jumped up like 20-30% in the last week or so. 

Any body think this rise is unsustainable??? Long term it might be justified however ...


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## haunting (3 August 2009)

It seems the Chinese are demanding a single IO price and to achieve that they are willing to adopt a high handed approach, sort of crash and burn strategy on their internal IO market structure, firstly by culling the 112 import licences to just about 5 or 6. In addition, they are talking about some kind of import quota (not sure on exporters or  on importers) without specifying how it is going to implement such scheme.

They have also revealed the Chinese negotiators were "screwed" by the Japanese by agreeing with the 33% offer because of the cheap coal offers from BHP, whilst the Japanese had gained from both fronts (coal and IO), the Chinese were stranded by their high internal cost in coal production. Hence they were very unhappy with how the whole price negotiation and how it was structured. But most unhappy of all, they felt they are the largest consumer of IO and yet they were being bullied into a price taker instead of a price leader, due to the concerted price "scamming" among the producers.

And this is what they are saying after two days of talkfest - all the steel mills in China will accept only a single price, negotiated between China and the IO producers. Although they didn't say it, but it is sufficiently clear that they will disregard whatever price the IO producers had negotiated with other countries. To them, there's only one IO price, a Chinese IO price for all the steel mills in China.

Also implied was their emphasis on "Chinese market, Chinese rules" - not sure how they can enforce that and not sure what kind of impact this will have on the big three IO producers. But based on the IO price impact on their steel price and the overall economy, my suspicion is they will play hard ball from now on and if they can't really shake up the whole system within the next couple of years, they will persevere on it.

The heat is on...


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## haunting (4 August 2009)

Rio Tinto's $1.9bn Madagascar project under scrutiny...

** let me just parrot the local media by saying this Rio is innocent! It's the local government that is the corrupt party! Full stop! 

Here are two other cases that would prove Rio's innocence if you don't believe me...

Guinea, Rio Tinto tensions escalate

Rio Four versus iron will of the state

** my pledge again - Rio is innocent!


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## oldblue (6 August 2009)

haunting said:


> No. It is in fact quite a good idea at the moment. It's the future you have to watch out for - there's another 26 million tons to clear, whilst the Indian has 14 mln; and the Indian seems to have a higher rate of decline - 1.8% vs 1.5%. Ever watch a Fat Loser competition before? The one that loses most fat wins! I think the Indian is well ahead.
> 
> In addition, back on WA shore, 5 ships in last two weeks, do you reckon there is a boom going on over there and is "business as usual"?
> 
> ...




According to BHP, the imported ore is going straight into Chinese furnaces and it's looking like "business as usual".

http://www.theaustralian.news.com.au/business/story/0,28124,25889018-5005200,00.html


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## haunting (6 August 2009)

Read here...

** a complete different slant from mine - what I see as threat, he sees as opportunity. I just hope he is not writing this as a spin for the companies. In any case, time and event will tell, especially over a longer period of time. Currently it is true that China is facing a lot of internal problem. In fact, their steel production is kind of out of whack with market demand. There is a mismatch of steel products - the market is in shortage of hot rolled steel whilst the steel mills have produced excessive cold pressed steel bar (not sure if this term is correct or not), hence the steel mills are rushing to meet the demand by buying more ore. But there's no question on the excess capacity and inventory and there's very high chance that the IO import will drastically slowdown in H2, which will only show sometimes in September onward since any order for ore will usually arrive in China between one to two months late. The current delivery/import figures in China are orders placed back in May/June period accordingly...

Going forward, it will be crucial to watch the Chinese response to the BHP/Rio merger. At this stage, I would say it's too early to claim China has laid down and played lame duck to the merger. I can see they have every intention of playing hard ball with both companies. 

There is another point which has been totally ignored by him is that China has been shifting their new ore orders to Vale. This is a very clear indication that China is exercising their market power, in the process, weakening both companies in terms of cash flow. There is no telling if their practice will shift to other commodities or not. But if it does, I will dearly love to hear from this analyst again, just to find out if he is all happy with that development. Between confrontation and cooperation, the latter is always the better option as it provides a better outcome, usually a win-win solution.

Even Obama sees the need and merit of such option, and he's the most powerful on earth... anyway, time will tell and let's wait and see.


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## oldblue (6 August 2009)

Another take on reasons to be optimistic about the iron ore export business.

http://www.businessspectator.com.au...wn-goal-pd20090805-UM9QU?OpenDocument&src=kgb


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## haunting (11 August 2009)

Signals from China shake confidence

** gotta say I am getting quite tired of all these international media fight between the Chinese and the Aussie. There is simply so much figgin' emotion injected to their writing that I found them to be counter productive to both country's working relationship, which is crucial, esp from Australia's angle if we want to ride the coattail of the Chinese economic growth. 

Thus far, if you were to pay attention to what is really going on, you would have noticed the SILENCE, firstly from the govt officials, secondly from the Rio management - they are the people in the know (sort of), of what is going on and what is needed to keep things going. No amount of hue and cry in the public or in the media, from the media corp will matter or help in this case. 

... only through diplomacy, that, we can hope to see a positive outcome for both sides. There is simply a much bigger picture and much more at stake here than just Stern Hu and IO trades.

Like it or not, Stern Hu and his team have been involved in corrupt business practices. That is a fact. No matter how we want to argue or deny it. If anyone doubts this, just wait for it - when the Chinese are ready, they will probably get him to confess in front of the TV and make that a public trial - sure I can expect the argument of confession under duress, etc... but frankly, how and what else do they want to see to be convinced? More official documents to show Rio's management is involved? More local Chinese corrupt managers to be dragged to the Chinese court to confront and confirm Stern's guilt? And put his family in China into absolute hell?

Come on!

Next, state secret. The only "crime" China has committed in this case is their lack of clearly define sets of law on state secrets. In the USA, there are at least a few legislations with policy clearly defining what constitutes a state secret. If Stern were to be put to trial there, there's every chance he would be found guilty.

Because of their lack of clarity, that doesn't mean Stern is totally innocent here. If the crime were to have committed in China, why do they have to play by the Australian standard? Theirs is not an open system, everyone knows that. The fact that Stern is paid a high price to work for Rio is for this fact that he knows how the system works. And now that he is caught, he should know what is the consequence. If the local media finds it hard to accept this reality, tough!

The Chinese, after this incident is going to fix up their laws on state secrets, that is a fact too. They will have similar legislation similar to the USA and next time, there won't be any ambiguity.

Because of Stern's case, and this "murkiness" in Chinese state secrets will deter international corporations to invest in China... blah blah blah - gimme a break! For f**K sake, stop talking nonsense! This is in my view a real beat up! And I am willing to bet no one will give a damn! GM, GE and others will pour their investment into China because it's the only growing market in this world that is large enough for them! 

Canada, is talking eagerly with China because they want the Chinese to invest in Canada! They wanted the Chinese firms to IPO there, they wanted the Chinese capital and investment! They don't see China to be a bad place to do business with!

The laws in China are well defined. What is murky is their implementation. The corruption laws are very clear and the penalty can be very severe. There was an execution reported yesterday on a senior Chinese corporate manager, and not too long ago, another was reported to be sentenced to death or life, depending on appeal...

For Stern Hu, his fate could be just as bad, but will be worse because of the responses coming from the local media, forcing the Chinese govt to exercise their harshest punishment to set an example! This is the least desirable outcome for Stern and his family!

...but, do the local media care? Do they really care!


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## haunting (12 August 2009)

BHP Billiton posts 62% drop in annual profit, demand from US, Europe & Japan improves



> _BHP Billiton Ltd, the world's biggest miner, has posted a 62 per cent drop in annual profit following a sharp decline in commodities prices, but says demand from North America, Japan and Europe is improving and demand from China would move closer to the real purchasing of customers in the near term.
> 
> BHP Billiton posted a 61.7 per cent decline in net profit to $US5.877 billion ($A7.14 billion) in the 2009 financial year.
> 
> Excluding one-off items, net profit fell 30.2 per cent to $US10.722 billion. Analysts had expected a net profit before one-off items of about $US10.2 billion - equivalent to a drop of about 33.7 per cent. _


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## LeeTV (13 August 2009)

*Rio Tinto employees formally arrested by China*
The group could well end up on trial on corporate espionage charges but seems to have escaped the charge of stealing state secrets

_Author: Chris Buckley
Posted:  Wednesday , 12 Aug 2009 _
http://www.mineweb.co.za/mineweb/view/mineweb/en/page72068?oid=87398&sn=Detail

BEIJING, (Reuters) -  

Chinese prosecutors have formally arrested four employees of Anglo-Australian mining giant Rio Tinto on suspicion of obtaining commercial secrets and bribery, the official Xinhua news agency reported on Wednesday.

Australian Stern Hu and three Chinese staff of the world's second-biggest iron ore producer are suspected of "using improper means to obtain commercial secrets about our country's steel businesses", Xinhua cited prosecutors in Shanghai as saying.

The commercial secrets charge can bring jail terms of up to 3 years, or 7 years in "especially serious" cases [ID:nPEK372992]. The procuratorate, or prosecutors, also approved their arrest on suspicion of "commercial bribery", said the Xinhua report.

Xinhua did not mention accusations of stealing state secrets, a sweeping charge raised in earlier reports, which can attract tougher sentences.

"The procuratoratial organ conducted investigations and believes that it has evidence for suspecting the four, including Stern Hu, of the above crimes," said the Xinhua report.

Hu and the three other members of Rio Tinto's Shanghai-based iron ore marketing team -- Liu Caikui, Ge Minqiang and Wang Yong -- were detained on July 5. Hu, a Chinese-born Australian citizen and head of the team, was accused of obtaining the Chinese steel industry's negotiating stance in iron ore price talks, sources have said. Iron ore is used to make steel.

The Rio case has cast a shadow over Australia-China trade, worth $53 billion in two-way terms in 2008. But China's sidelining, for now, of the graver state secrets accusations may indicate an effort to cool political contention over the matter.

"That lowers the temperature," said Jerome Cohen, an expert on Chinese law at New York University, speaking of the absence of the state secrets accusations.

"That puts this as a white collar crime, a commercial crime, and not espionage involving state secrets."

Chinese Vice Minister of Commerce, Fu Ziying, told a news conference in Beijing the case would receive a "fair verdict" -- a term suggesting a trial is certain -- and said it showed his government wanted to create a fair and open marketplace.

"I believe this case will not, and should not, affect the healthy and stable development of Chinese-Australian bilateral trade and economic relations," he said.

The arrests do not amount to a decision to go to trial but allow authorities to continue investigating, said Mo Shaoping, a prominent criminal lawyer in Beijing.

"The arrest means the suspects remain in detention and the police can continue investigations, usually for up to two more months," Mo told Reuters.

Cohen said that without the state secrets accusations, which authorities can use to justify keeping suspects entirely isolated, the Rio suspects stand a stronger chance of being allowed to see lawyers.

Rio Tinto's shares have fallen about 5% from their close at the end of last week of A$60.57, before a weekend report from China that said the company had been spying for six years.

The shares were at A$57.35 by 0400 GMT on Wednesday.

Rival BHP Billiton (BHP.AX: Quote)(BLT.L: Quote) has fallen about 1.3% to A$37.50 over the same period and the benchmark Australian S&P/ASX 200 index has risen about 0.6%.

NO COMMENT FROM RIO

Rio Tinto declined to comment when contacted by Reuters about the arrests. Rio has previously said the four did nothing wrong.

Australia's Foreign Ministry said Australian diplomats in Shanghai were informed of the arrests late on Tuesday but a spokeswoman refused to comment on whether China had softened its position by using the commercial secrets charge.

"We are not prepared to speculate, though the range of possible penalties under these articles is less severe than for state secrets," the spokeswoman said.

Prime Minister Kevin Rudd has warned China it had significant economic interests at stake in detaining Hu and that the world was watching how it handled a case that has highlighted the risks of doing business in the world's third-largest economy.

Australia exported $15 billion worth of iron ore to China in 2008, accounting for 41% of China's iron ore imports in that period.

The Xinhua report also said that in recent days Chinese steel executives had been formally arrested on suspicion of "providing commercial secrets" to Hu.

An online article published in a magazine run by China's state secrets agency at the weekend said Rio spied on Chinese mills for six years, resulting in the mills overpaying $102 billion for iron ore, Rio Tinto's biggest earner.

The Australian government on Tuesday dismissed the Chinese report, which had rattled investors.

"I think they (China) wanted to get the bad PR behind them as much as they could but at the same time get a message out to corporations operating in China," Scott Harrison of Pacific Strategies and Assessments, an Asia-focused risk consultancy company, told Reuters of the formal arrests.

"Although it may reduce international pressure, at the grassroots level I don't think its going to reduce the concerns of companies operating here," he said.

(Additional reporting by Emma Graham-Harrison in Beijing, Joseph Chaney in Sydney and Rob Taylor in Canberra; Editing by Dean Yates)


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## haunting (13 August 2009)

Rio Tinto Charges Spark Rare Uproar as U.S. Secrets Cases Surge...

** this is quite ironic really... but it sure doesn't bode well for Stern Hu. In fact, there are comments in China saying that there is no back down at all from China on this case as it has been a commercial case all along. Commercial spying is no less serious than stealing state secrets, and with bribery involved, the penalty could be just as serious. Some of the comments in the local media are quite off the mark by saying there is a back down in this case.

The only visible back down if there is any, is the media reaction towards CISA, it seems the govt is seeing CISA's prolonging of the IO negotiation be counter productive and is most unpleased with some of its suggestion of a single pricing structure as it clearly is unworkable due to the diverse and "disperse" nature of the small to medium size Chinese steel mills.

There may yet be changes in the Chinese side in terms of restructuring and reorganising of the "team".

Many are saying the Spygate has now moved on further into the next phase involving the corrupt Chinese managers who had been dealing with Stern and there is every chance that the govt will speed up this case to get a conclusion asap. This is by no means a favourable outcome to Stern as it implies the Chinese are confident of their investigation..

With regard to the IO negotiation - I think the producers have won this round. And possibly they will win the next round as well. The reason is quite simple really - the Chinese has beaten themselves silly in this case due to the many vested interests within their own ranks. The steel mills have been making so much money  scalping and skimming off their own smaller brethrens that  they have no incentive to change the comfy relationship with the producers, and in many ways they had actually sabotaged their own team in the negotiation. This is not something CISA can change overnight.

With the Spygate investigation into these corrupt managers, the background manoeuvre and house cleaning I believe will most likely weed out many of these "double agents". By the time they are done, I think, will be the time of real test for all the IO producers as there won't be any more "insider" info coming forward and the Chinese team would probably be more organised and readied for the negotiation.


----------



## haunting (13 August 2009)

China steelmakers urged to stop projects



> _A top government official in China has urged steel producers to stop projects aimed at expanding capacity as Beijing tries to curb a glut in the industry that is dampening prices.
> 
> "I would like to call on all steel producers, including major ones, not to construct any new projects within the next three years," Li Yizhong, minister of industry and information technology, told reporters on Thursday.
> 
> The Chinese steel industry suffers from a huge gap between annual production capacity, which comes in at 660 million tonnes, and demand, which only stands at 470 million tonnes, according to Li..._




** the chairman of CISA is a paper tiger, although he has implicit support from the top, he  doesn't really have an "offcial" role... but not this guy, Li - he is a minister and he can bite!

This shows the Chinese govt is taking over the mess in the steel industry and there is every indication that he is going to bang some heads.

In a different report I'd just read, he was also quoted as asking for cooperation from the IO producers, to recognise the fact that China is the biggest consumer of IO and as such, she should get the due recognition and should play a leading role in setting the IO price, esp with respect to China's demand... for mutual long term benefits. 

Note this - he was asking and not demanding, which, in my view is China's subtle acknowledgement that they/CISA have lost the plot and the Chinese govt is now asking for cooperation from the IO producers. Couple with this report, it is quite clear that it's a carrot and stick approach. Let's say the big three continue to ignore this "official" request and continue to play hard ball by acting cartel like, and continue to push up the IO price, they should expect some kind of immediate domestic reaction from the Chinese govt - drastic moves such as immediate freezing of projects to cause a plunge in steel price, effectively killing off any potential rise in demand and putting downward pressure on IO sales.

If the IO producers were to react by holding back their sales, then, there is very chance that this stalemate will drag on with attrition becoming the defacto means of negotiation, which is really bad for all sides. This time, the Chinese would probably have a better leverage in that the real demand is declining, they had just done their restocking and hence would be able to meet any short term demand, and they can rely on the smaller IO miners - but I doubt if this will be adequate to meet all their needs.

On the producer side I guess it will be the same old tactic, except, the Aussie miners would have to watch the Brazilian closer this time - if they were to abandon ship and make a deal with the Chinese, that could mean really big **** for the Aussie. 

Alternatively if the Aussie were to sign up with the Chinese, that will effectively kill off Vale's challenge in the Chinese market, which probably is not a bad idea, but then, thus far based on all the manoeuvres from both BHP and Rio, I gotta say this is not likely to happen... or we won't be facing the spygate incident and all these bad blood.


----------



## haunting (17 August 2009)

Rio's market intelligence iron edge over China

** I agree they, Stern Hu's team did a better job than the Chinese in terms of market intelligence, hence they were so confident that when the Chinese negotiators asked for a greater discount, they weren't about to budge.

But there is other info which has not been reported widely here, or if it has been reported, swept under the unreliable hearsay carpet by the local media. For example, the tax question, which according to the usual Chinese way of  releasing info, there were questions on the tax paid by the Rio's Chinese office stuffs (too low), the amount of tax Stern is paying, and the amount of investment properties he owned in China. To explain all these, it seems there's a news that says he has been involving with bribery activities in both directions, ie, it simply means he giveth and taketh. At this point, it is all hearsays and conjecture from the Chinese media, which I think if there is any substance, will be used in his trial against him. We will find out in due time.

The question moving forward is this - without this grass root intelligence gathering, and without easy access to the small and mid size local steel mills, plus access to the iron ore mines in China, what are the iron ore producers going to use to negotiate with the Chinese?

The Japanese got the 33% discount because they are more organised than the Chinese. On top of that, they are investors in the iron ore producers. The Chinese don't, hence after this round, they are hell bent to fix up their leaking boat, and this is an uncertainty the IO producers are up against... from now moving forward, the Chinese will only improve on their position, whilst the producers will likely to stagnate in terms of market intelligence. At some point, I believe both sides will come to this conclusion, hopefully much earlier, that is, it's better to work out a solution that is more equitable to both sides.

Confrontation is a loser's game.


----------



## haunting (17 August 2009)

Here is an interesting development...



> _A Rio Tinto spokesman said the company does "not see this (Fortescue) pricing agreement as relevant to our pricing for fiscal 2009".
> 
> "Rio Tinto conducts its own negotiations with its customers worldwide, the spokesman said.
> 
> "Whether and how other producers reach their own agreements is up to them."_




** the situation analysis - the Chinese says they won't give a damn to what IO price others have agreed, and Rio is saying they won't give a damn to what price China has agreed with other producer a la FMG - where will this take them?

The biggest IO producer did a deal with the second biggest consumer and used that to tell the biggest consumer to submit to their price; and now the biggest consumer has done a deal with the 4th largest IO producer and is using that as their benchmark for future negotiation and got a response that comes with two shafting fingers - who's gonna win at the end?

Does it mean the "tradition" of contract pricing is dead?


----------



## Dark1975 (18 August 2009)

Rio announcement : Rio Tinto has received a binding offer from amcor to acquire the majority of the alcan Packaging Businesses,Good news.
Should i buy more?


----------



## lianeisme (18 August 2009)

Dark1975 said:


> Rio announcement : Rio Tinto has received a binding offer from amcor to acquire the majority of the alcan Packaging Businesses,Good news.
> Should i buy more?




I bought more today I think they are a great stock to have in my potfolio I have 1684 of them at present.


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## haunting (18 August 2009)

Here is an interesting article on what would happen to those corrupt ones...



> _According to the act, if a US company is found to have been involved in bribery, its headquarter and overseas companies will be the subject of criminal and civil enforcement actions, resulting in large fines and suspension and debarment from federal procurement contracting.
> 
> A company listed on a US exchange or with significant operations in the US, such as Siemens, Europe's largest engineering company, which is listed in the New York Stock Market, is subject to the act irrespective of where the corruption occurs... _




** now I am waiting to see what will happen to Rio if Stern Hu is found guilty. Will the US demand the evidence from China and proceed with their own investigation?


----------



## jayinoz (19 August 2009)

Looks like people do not know if RIO alo sale is good or bad. I think it is a good value sale. Concentrate on the commodities that are really producing for them. 

The stock has fallen near 10% in the last few days. PE below 11 again. Yield OK for large miner. Thursday will be interesting.


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## haunting (21 August 2009)

Rock-solid Rio...

** I am a rather cynical and critical guy... and since I am such a nitpicker, I would take this report as a spin... my usual form and not too surprising...

Here is a brief summary of Rio's result, quite clean and factual, so it's good for consumption and probably good for your health...

Here is a report on why you want to keep Rio on your "under review" folder...

** coz, Rio made bulk of their IO profit through the spot market, which it now says the door has shut on them. And their current production, if I am not wrong is shipped to fulfil the existing contracts (signed while talk with CISA was ongoing), there is no mention of new contracts since "spygate", so, gotta wait for the next Q or next H to find out what's been going on there.

** then there's the question of next round of IO talk, coming soon... with a fair bit of uncertainty, issues such as China cutting back steel projects for the next three years and going around head banging to get their people from leaking confidential industrial info, etc... any assumption made at this point that IO demand will be good and business as usual in my view, is quite "funny", if not "silly"...

Is Rio rock-solid? Probably, coz it is laden with IO, all it needs is to find a buyer to unload... and everything will be "A-okay" I guess.


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## thinkthendo (22 August 2009)

Hi guys, the Price Sensitive Measures  of RIO looks very well
however the debt is still high

*Previous Close $56.31 
Previous Close Date 21/08/2009 
Dividend Yield 2.36% 
PER 6.20 
Market Cap. ($m) 34,170.67 
Enterprise Value ($m) 89,853.40 
EV/EBITDA 2.83 
EV/EBIT 3.37 
Mkt Cap/Rep. NPAT 5.14 
Mkt Cap/Revenue 0.44 
Price/Book Value 1.05 *

as mererial price goes up, I think it's a good stock to buy, I hold 401


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## haunting (26 August 2009)

Shandong Iron to Buy Two-Thirds Stake in Rizhao Steel


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## haunting (2 September 2009)

Digging Out of a Sino-Aussie Resource Trap



> _Disputes over iron ore trade have shown how each country complements the other: Australia is the world's largest supplier of iron ore and China is the largest importer. In this industry, which requires huge investments and long lead times, both sides have a strong common interest to ensure upstream and downstream stability. This fact is more important than any lip service toward goodwill for establishing a sound, stable and long-term cooperative relationship.
> ...
> the row over mineral resources has exposed an Achilles heel of Sino-Australian relations built on common interests. To maintain long-term and mutual trust, China and Australia now must grapple with the resource trap, resolve the current dispute, and pave the way for strategic cooperation in resource development. This calls for courage among decision makers in each country. They must break free from the old mode and reach out for a "win-win" solution.
> 
> ...




** *"On the other hand, if Australia continues to ignore these concerns, there will be a price to pay." *- all I want to know is "what price?" and "how much or how high?", just so I can make the necessary adjustment...


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## Chaka1988 (13 September 2009)

*blue chips?*

Hey guys

I am interested to purchase some blue chips shares just to get some idea of the share market (it will be might first investment). I am interested to invest $3k. 
I am interested to invest on rio, as according to the graphs, they have a big potential. However, a friend of mine said they are in big debts and not a good company to invest on. He advised me to invest on commonwealth bank.

What do you think?

cheers


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## enigmatic (13 September 2009)

Chaka1988 - can't give you any financial advice on this forum.
I suggest if you are looking for a blue chip to invest in, then read through the threads for the main blue chips consider what you are looking for.. do you want High risk, low risk what not however the most important thing that I have learnt since the start Little late but working on it is to work out how you are going to manage your risk.


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## blanker (15 September 2009)

Any thoughts on this stock? It’s been flat for a while & I’m hoping to see movement once Ore prices are agreed with China next month. I’m hoping the movement is up....


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## bonkerrs (25 September 2009)

What is the reason there is over 6 million in volume at 9am (25.09.2009)? I had a look at the announcement but can't see why it would create that amount of interest.


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## skyQuake (25 September 2009)

bonkerrs said:


> What is the reason there is over 6 million in volume at 9am (25.09.2009)? I had a look at the announcement but can't see why it would create that amount of interest.




Option expiry today: EC = Exercise calls 
filler100charactersfiller100charactersfiller100charactersfiller100charactersfiller100characters


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## bonkerrs (25 September 2009)

skyQuake said:


> Option expiry today: EC = Exercise calls
> filler100charactersfiller100charactersfiller100charactersfiller100charactersfiller100characters




Thanks sky. Looks like it is having a negative effect on the price, or that could be just because it is a 'not so good' day for rio shares.


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## Garpal Gumnut (13 October 2009)

It always surprises me how infrequently this great company is mentioned on asf.

Its in a channel now. Good for holding, trading, options, warrants etc.

What a lovely stock.

Saved my bacon in the GFC of 2009. It seems so long ago.

gg


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## lianeisme (14 October 2009)

I agree with you not many people seem to talk about this stock I think the China deal has scared many people.  I have bought and sold this stock many times in the last 10 months and have made a killing on the market. I am now holding a substantial amount of this stock. Still I trade half the parcel when it is looking good.


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## adobee (4 December 2009)

Garpal Gumnut said:


> It always surprises me how infrequently this great company is mentioned on asf.
> 
> Its in a channel now. Good for holding, trading, options, warrants etc.
> 
> ...




I was just going to post this.. as I have looked at RIO for a while but a quick glance and I realise I have missed some easy trading.. still holding this channel to a T


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## Sean K (31 January 2010)

Still gobsmacked at the indigenous folk not wanting to add to the economy, and their own casino change. 

Not to mention some health care and eduacation which might be handy in order to get yourself out from under a bush!!!!



*Ranger finally powers ERA *
BARRY FITZGERALD 
January 30, 2010 

RIO Tinto's listed uranium subsidiary, Energy Resources of Australia, is finally enjoying the benefits of higher uranium prices at its Ranger uranium mine in the Northern Territory.

But hopes ERA will be able to develop the nearby $20 billion Jabiluka uranium deposit remain just that, with no breakthrough on an agreement with traditional owners in sight.

ERA has posted a record December-year profit of $272.6 million based on Ranger production, up from $119 million previously (on an underlying basis). The result reflected the benefit of the group's realised uranium price rising from $US32.53 a pound to $US50.84 a pound.

In previous years, the price received for Ranger uranium was held back by legacy contracts written at the low uranium prices that prevailed before the market took off in 2007 in response to rising expectations that nuclear power was the long-term answer to carbon pollution concerns.

Uranium prices have retreated substantially from the $US100 a pound average in 2007 but the current long-term price of $US61 a pound is still a multiple of the price ERA and other uranium producers had to endure in recent years.

The record profit has prompted an increase in the group's final dividend from 20 ¢ a share to a fully franked 25 ¢ a share. The ex dividend date is February 15 and the dividend will be paid on March 5.

ERA chief executive Rob Atkinson said yesterday that there had been ''no change there at all'' in relation to Jabiluka. ERA signed a long-term care and maintenance agreement in 2005 that obliges it to secure the consent of the Mirarr people to develop the deposit, one of the world's biggest high-grade deposits.

''We fully respect the agreement … and we fully abide by that,'' Mr Atkinson said.

Reserves and resources at Jabiluka stand at an unchanged 141,000 tonnes. That compares with the remaining total at Ranger of 159,000 tonnes.

ERA said the outlook was bright, with a ''strong market and sustained government and public interest around the world in nuclear energy as a critical part of the mix in a carbon constrained economy''.


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## Nonferrous Pete (14 March 2010)

I'm still getting used to navigating around on ASF. Can anyone suggest a recent thread addressing the mechanics of playing the LON RIO vs ASX RIO arbitrage. LON appears to be a steal compared with Sydney. I'm sure this has been addressed I just haven't found it yet.  Thanks.


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## tminus (31 March 2010)

I am pretty new to the game. But as I was looking at the Rio chart to see if there was Elliot Wave pattern, then I noticed an ascending triangle forming. 
But the triangle has a span of 18 months, is this too long, is my analysis flawed?


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## surfingman (3 May 2010)

Any thoughts on how far Rio could fall?

Technically: Rio has broken the long term trend, and has a good levels of support under it, in my opinion still looking short.

Fundamentally: New Miners Tax Rates, China putting measures in place to slow down the growth, Interest Rate decision tomorrow and the BHP Joint Venture in the pipeline with little direction until the end of the month when ASIC is suppose to be making a decision.

I am short at the moment with a $62 June 24 Put Warrant, looks like a good shorter term trade but I have been in since Wednesday 28th April So I have a good buffer to play with.


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## frankie_boy (6 May 2010)

Cant say how much more RIO is going to keep falling, even tho i am still up from when i bought mine, its not that far off.. Though am poised to grab a whole lot more with my spare cash... As everybody else, am just cautious to what happens with this wonderful tax that Krudd wants to bring in, and the Greased lightning strikes causing such a shakeup.


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## Trade wind (10 May 2010)

My big problem with RIO is their management. Putting aside its poor debt record and bungling in their China office, they are quite prepared to derail their share price for the sake of political posturing. I mean, the threat to put off Pilbara expansion plans because of the proposed super tax was just shooting yourself (or your shareholders) in the foot. If they can't pay tax and make the Pilbara profitable, then I'm sure the Chinese would love to give it a go. Oh, that's right, they were going to sell up to Chinalco, do anything rather let BHP in, but when the government blocked it in the national interest, they threatened to sack 3000 workers.

This company is the big Un-Australian. I'm not surprised it's share price is still well under half it's record high.


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## lianeisme (13 August 2010)

The buy back of Rio Tinto PLC shares can anyone explain to me how this will benefit the share holder in Australia, USA and London. What are the ramifications of this decision to Rio share holders. I am asking this because I don’t fully understand.
For any explanations I thank you X


----------



## DB008 (13 August 2010)

Trade wind said:


> My big problem with RIO is their management. Putting aside its poor debt record and bungling in their China office, they are quite prepared to derail their share price for the sake of political posturing. I mean, the threat to put off Pilbara expansion plans because of the proposed super tax was just shooting yourself (or your shareholders) in the foot. If they can't pay tax and make the Pilbara profitable, then I'm sure the Chinese would love to give it a go. Oh, that's right, they were going to sell up to Chinalco, do anything rather let BHP in, but when the government blocked it in the national interest, they threatened to sack 3000 workers.
> 
> This company is the big Un-Australian. I'm not surprised it's share price is still well under half it's record high.




I agree. BHP has been going ahead with it's RGP expansion projects and also doing feasibility studies on it's Quantum Ports + Rail Expansion projects. 

Meanwhile...RIO, just announced last week that they too would be also embarking on a $11 billion expansion project. Always behind. Buying Alcoa at the peak wasn't the smartest thing either. But, it's always easy to say that in hindsight.


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## oldblue (13 August 2010)

lianeisme said:


> The buy back of Rio Tinto PLC shares can anyone explain to me how this will benefit the share holder in Australia, USA and London. What are the ramifications of this decision to Rio share holders. I am asking this because I don’t fully understand.
> For any explanations I thank you X




Share buybacks usually have the effect of underpinning the SP as the company concerned "mops up" any weak selling.

And, of course, it means a lesser number of shares on issue to share in future profits, thus enhancing eps.

Normally good news for remaining shareholders.



I don't hold RIO.


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## lianeisme (13 August 2010)

oldblue said:


> Share buybacks usually have the effect of underpinning the SP as the company concerned "mops up" any weak selling.
> 
> And, of course, it means a lesser number of shares on issue to share in future profits, thus enhancing eps.
> 
> ...



Thank you so much for the explanation Oldblue does that also mean that the stock will become less volatile and slowly creep up to around $90.00 plus per share?


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## adrunis_84 (16 October 2010)

Hey all,

I have recently invested in some RIO call options. I bought the options @ $78.77 on wednesday & much to my joy the stock has gained to $83.2 in two days.. ..im keen to get some ideas as to the likely trend going forward, it appears as though RIO could be heading up. 

Any thoughts on when/if RIO can hit $90? What are the likelyhoods of stocks in RIO continuing to move up?

A


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## adrunis_84 (16 October 2010)

Ok, so did some browsing - Citi is rating RIO as a buy with medium risk. Target price is $100. 

The question is at what pace can RIO reach this target?


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## mattryanshares (20 January 2011)

*RIO why down when finacials were great.*

Still getting my head around this whole stock market thing,

i understand that the market has dropped today most probably due to profit taking,

What i dont understand is why people would be selling RIO when its just posted a huge production increase and appears to be in a really good position, plus isnt it just about to pay a dividend??

It surely is a long time share for holding so why sell it now???


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## Tysonboss1 (20 January 2011)

*Re: RIO why down when finacials were great.*



mattryanshares said:


> Still getting my head around this whole stock market thing,
> 
> i understand that the market has dropped today most probably due to profit taking,
> 
> ...




Maybe the price priemium that investors have been paying above net assets was high in anticipation of better results. I mean it may have been already over valued because investors thoughts results were going to be really really strong, and when results came out that were only some what strong, the price has corrected.

But who knows share prices move for a million reasons that aren't related to the company on a daily balance. The share price is what it is. do you analysis. it it is undervalued or fairly valued and you believe in the companies assets buy some, if it is over priced and looks like it would be along time before companies true value reaches it's share price, think about selling some.


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## Julia (20 January 2011)

*Re: RIO why down when finacials were great.*

As Tyson has suggested, the market has usually factored in the figures the company is widely expected to report.  Analysts will have crunched the numbers in preceding times and issued their recommendations accordingly.

It's usually only when a company delivers an unexpected result (either positive or negative) that you see much change in the SP.


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## Garpal Gumnut (22 September 2011)

RIO is down 9% atm in Londinium.

Cave ferrum.

gg


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## nhutty (23 September 2011)

bad timing for myself.  My first foray into shares and i figured i'd go a relatively stable stock in RIO.  Bought last week for $69, and start of today its lost over 10%.

This is a long time investment for myself so im not too worried....just yet


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## Wysiwyg (20 October 2011)

Surely the Australian carbon tax has influenced the sale of Aluminium interests by Rio. Maybe their number crunchers came up with a carbon tax figure that would even worsen the bottom line for their "struggling" aluminium businesses. 

However they have announced a substantial bid for a Canadian uranium explorer.


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## Smurf1976 (20 October 2011)

Wysiwyg said:


> Surely the Australian carbon tax has influenced the sale of Aluminium interests by Rio. Maybe their number crunchers came up with a carbon tax figure that would even worsen the bottom line for their "struggling" aluminium businesses.



My opinion is that there will be a capital strike at the plants leading to actual closure sometime around the middle of next decade. 

That's just my personal opinion as someone who's had a bit of background with the economics of aluminium smelting in general. It's also a reflection of current electricity contracts they have in place, particularly at Bell Bay.


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## Garpal Gumnut (26 January 2012)

RIO is a much overlooked stock on this forum with a classic technical track from highs to lows and back again to new highs.

For the impecunious there are many RIO options and warrants which can be traded to give the impression that one is throwing bad money after good, as with penny stocks.

RIO has been good to me over many years, and saved my fortune on two occasions from memory.

It has completed a high to low of over $100 since 2008 and is now ranging between the 38% and 50% retracement of the high/low. This is an ideal situation for traders and those looking to the long term. It is accumulated and distributed according to all common technical theories and volume/price are a good indications of this occurring as per the accompanying chart.

I have been accumulating RIO and see no reason why it should not again hit $125 or higher in the near future. I trade it for the long term and opine that it is an essential component of any growth or SMSF portfolio.  

gg


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## todster (26 January 2012)

Another cyclone brewing in the Pilbara will hit iron ore production.
And get me sent home


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## Garpal Gumnut (26 January 2012)

todster said:


> Another cyclone brewing in the Pilbara will hit iron ore production.
> And get me sent home




It could very well intensify and get you home early.






gg


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## drillinto (4 February 2012)

Mozambique: Foreign mining companies criticized

http://www.businessweek.com/ap/financialnews/D9SKNOR80.htm
***


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## Garpal Gumnut (4 February 2012)

It's marching up past $70 now, if it gets through $75 it could reach it's former high.

Exciting times.

gg


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## Julia (4 February 2012)

I wouldn't be getting too excited.  As a small experiment in buy and hold I have a very small holding in RIO just to see what happens without active trading.
It has been there for about a year and I'm still well down the drain.
And the dividend certainly doesn't make up for the capital loss.


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## Garpal Gumnut (4 February 2012)

Julia said:


> I wouldn't be getting too excited.  As a small experiment in buy and hold I have a very small holding in RIO just to see what happens without active trading.
> It has been there for about a year and I'm still well down the drain.
> And the dividend certainly doesn't make up for the capital loss.




I'd agree Julia, it has a bit of work to do to get back up in to the $100's.

It seems to be steaming atm though.

gg


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## Klogg (9 February 2012)

Garpal Gumnut said:


> I'd agree Julia, it has a bit of work to do to get back up in to the $100's.
> 
> It seems to be steaming atm though.
> 
> gg




Off the back of a 59% NPAT decrease, I want to buy more RIO shares! (if the SP goes down far enough)

The underlying figures are great, just the Alcan write-down that hurt.

Just my 2c.


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## James W (23 February 2012)

Rio is falling like a stone now. be back at 60 before long, there is strong support there.


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## Garpal Gumnut (26 February 2012)

James W said:


> Rio is falling like a stone now. be back at 60 before long, there is strong support there.




Its the trading range, $60 to $73.

The longer it stays in this range the greater the break to the upside, which is likely. Or the downside which is less likely. 

I will continue to load up on weakness in RiO.

gg


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## Garpal Gumnut (9 March 2012)

Garpal Gumnut said:


> Its the trading range, $60 to $73.
> 
> The longer it stays in this range the greater the break to the upside, which is likely. Or the downside which is less likely.
> 
> ...




RIO is getting towards the bottom of the range.

Interesting.

gg


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## Garpal Gumnut (11 March 2012)

I must be the only silly bugger trading RIO on ASF.

Remember, you get the same profit from the move of 200 shares in a $60 company as you do from 200,000 shares in a 6c company. You also don't have to carry as much scrip in your pockets, leaving room for your wallet and keys.

This could be the start of an upward move for RIO, if not I'll be watching for signs of increasing volume as it approaches $60.

The RSI at the top of the chart, (the redline one) shows good correlation on previous down moves in to overbought territory under 30, at the $60 mark, with a significant recovery each time.

As ever I am so looking forward to tomorrow and get my beloved motor back from it's service.

gg


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## McCoy Pauley (12 March 2012)

I'm not trading RIO yet, gg, but it's approaching the price area where I'm becoming interested in acquiring some RIO shares. I'd be careful about setting a stop under $58-$60/share, as that seems to be the bottom of the trading range at present.


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## Julia (12 March 2012)

If I wasn't using a very small holding in RIO to demonstrate the foolishness of a buy and hold approach, I wouldn't be buying this.


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## poverty (12 March 2012)

Julia said:


> If I wasn't using a very small holding in RIO to demonstrate the foolishness of a buy and hold approach, I wouldn't be buying this.




It helps if you buy and hold from the right starting price?


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## notting (12 March 2012)

I have a bit or BHP to keep me interested in the sector.
It moves like a slug and is as big as a whale so it's a good indicator.
When it looks like it's turning I'll probably get into RIO and AGO


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## Julia (12 March 2012)

poverty said:


> It helps if you buy and hold from the right starting price?



Yes, of course.  I bought around May 2010 at $65 having watched it come down from a bit over $80.  Sold most at a decent profit, but kept just 150 for the buy and hold experiment.  It has so far reinforced my belief that riding the trend up then selling is a much more profitable strategy.


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## oldblue (12 March 2012)

I'd agree with that, Julia, at least as far as miners and o&g stocks are concerned. There's always the exception(s) of course and I think that BHP and RIO make good cases to be included in long term, core portfolios. But a different matter for traders!


----------



## humble (30 July 2012)

Hello,

First post here.

I am currently reading RIO annual report, and puzzled by not finding what is the FE % contents of Iron Ore.

Take a look at production report here:
http://www.riotinto.com/annualreport2011/production_reserves_and_operations/index.html

From the report:
"Mine production figures for metals refer to the total quantity of metal produced in concentrates, leach liquor or dorÃ© bullion irrespective of whether these products are then refined onsite, except for the data for bauxite and iron ore which represent production of marketable quantities of ore."

Any ideas what they actually mean?

Many thanks,
Humble Investor


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## burglar (30 July 2012)

humble said:


> Hello,...
> 
> Many thanks,
> Humble Investor




http://www.polinares.eu/docs/d2-1/polinares_wp2_annex2_factsheet7_v1_10.pdf

"Iron ore differs significantly in iron content. This variation affects the size of production and reserves in terms of actual iron content and also the value of the iron ore. The average Fe content of Chinese iron ore is about 30-40% Fe. The average Fe content of Brazilian and Australian iron ore is >60% Fe."


----------



## humble (30 July 2012)

burglar said:


> http://www.polinares.eu/docs/d2-1/polinares_wp2_annex2_factsheet7_v1_10.pdf
> 
> "Iron ore differs significantly in iron content. This variation affects the size of production and reserves in terms of actual iron content and also the value of the iron ore. The average Fe content of Chinese iron ore is about 30-40% Fe. The average Fe content of Brazilian and Australian iron ore is >60% Fe."




Thanks for the link, it has lots of great data.

However, the question is quite specific. Why the Avg. Fe %  contents of Iron Ore sold it not mentioned in Rio's reports?
You all would agree with me that there is a difference if they deliver 100 mtpa of 100% or 60% Fe.
Also, Rio sells a few types of Ore, so it would make sense to somehow "normalize" the reports to 100% Fe. or else provide more details.

Any ideas?


----------



## oldblue (30 July 2012)

Fair point, humble.

I don't know the answer but my guess is that the Fe content from RIO's mines remains fairly stable over time; the buyers know what they can expect from certain mines and therefore buy on a "tonnage" basis from those mines. But as I say, just a guess.


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## notting (26 September 2012)

RIO and AGO now in the buy zone between 50 and 61.8% off the high of the bounce from the 5 wave lows I believe!


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## wilto (28 September 2012)

notting said:


> RIO and AGO now in the buy zone between 50 and 61.8% off the high of the bounce from the 5 wave lows I believe!




My 1st post here, thanks. I am starting my 1st share portfolio. Will be adding these to the top of the list.


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## Julia (28 September 2012)

wilto said:


> I am starting my 1st share portfolio. Will be adding these to the top of the list.



Not in any way to comment on Notting's choice, but what's the basis for your 'adding these to the top of your list", wilto?


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## brettc4 (14 October 2012)

RIO has been on a long down trend for 2 years and it currently on a downtrend the has been tested 4 times.  We are forming a triangle since the year low at the end of August and the most recent low at the end of September.

The last 2 weeks has been up but on generally very low volume. This would need to break up on high volume else I fear it will be a false break.  I however think we will see another push down.


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## mshepherd (19 October 2012)

$58 today, break out of the long term trend?


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## kid hustlr (19 October 2012)

Anyone else seeing a glorious head and shoulders bottom on RIO ?


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## herzy (19 October 2012)

kid hustlr said:


> Anyone else seeing a glorious head and shoulders bottom on RIO ?




sorry could you translate/explain this for me?


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## kid hustlr (19 October 2012)

herzy said:


> sorry could you translate/explain this for me?




Just a trading pattern which can sometimes signal a change in trend.

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:head_and_shoulders_b

http://hfgapps.hubb.com/asxtools/Charts.aspx?asxCode=RIO&compare=comp_index&indicies=0&pma1=0&pma2=0&volumeInd=9&vma=0&TimeFrame=D6


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## cbc (10 November 2012)

brettc4 said:


> I however think we will see another push down.




I Agree, If USA has another big correction we could see RIO around the $45.  Just throwing it out there it, SPX 500 is trending down currently so it will be interesting the next few weeks


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## Garpal Gumnut (2 January 2013)

brettc4 said:


> RIO has been on a long down trend for 2 years and it currently on a downtrend the has been tested 4 times.  We are forming a triangle since the year low at the end of August and the most recent low at the end of September.
> 
> The last 2 weeks has been up but on generally very low volume. This would need to break up on high volume else I fear it will be a false break.  I however think we will see another push down.
> 
> View attachment 49326






cbc said:


> I Agree, If USA has another big correction we could see RIO around the $45.  Just throwing it out there it, SPX 500 is trending down currently so it will be interesting the next few weeks




All stock predictions are opinions and I respect yours, but definitely do not agree. Recently on another thread I predicted RIO would make $90 in 2013.

I'd like to change that and predict a possible wave 3 high of $120, before a pullback to $100.

A monthly chart.







RIO has saved my bacon on a number of occasions and increased my wealth more than any other share in a bull market.

Just my opinion.

gg


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## Garpal Gumnut (12 January 2013)

mshepherd said:


> $58 today, break out of the long term trend?




Good call, I'm looking at a retracement close to $60 now to add to my holdings.

I posted a chart recently on a breakout thread, on RIO which illustrates my thinking.

gg


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## mshepherd (15 January 2013)

Garpal Gumnut said:


> Good call, I'm looking at a retracement close to $60 now to add to my holdings.
> 
> I posted a chart recently on a breakout thread, on RIO which illustrates my thinking.
> 
> gg




Got lucky and took profits on 3rd Jan.   (Expected the market mood to soften after Fiscal cliff hype was settled).

Also, currently waiting on a substantial retrace due to the US debt can kicking uncertainty.
Expecting a last minute 'muddle through' (or expectation of such) will produce a similar uptick afterwards.
Likely such a 'muddle through' will involve some soft of money creation (inflation) to pay down some debt.
Inflation will likely also put further weight to an upswing.

Now to gamble on when market sentiment will shift from uncertain (downleg) to confident (upleg).

Just my ramblings.

Rio has great long term prospects.


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## CanOz (17 January 2013)

The CEO just quit...Just heard on the Bloomy...


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## notting (17 January 2013)

Although it's old news -



> RIO to post-tax impairment charge of about $14 billion in its 2012 results on Feb. 14,




That is truly a disgusting number.


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## notting (17 January 2013)

CanOz said:


> The CEO just quit...Just heard on the Bloomy...




Down 4% in London.
Perfect storm along with the Ore drop last night.
Hmmmmm Ore :homer:


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## McCoy Pauley (17 January 2013)

CanOz said:


> The CEO just quit...Just heard on the Bloomy...




Window dressing.

He was sacked but the chairman is just being polite about it.  Could be a good opportunity to pick up some RIO on the cheap tomorrow.


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## skc (17 January 2013)

notting said:


> Although it's old news -
> 
> That is truly a disgusting number.




Guess these guys deserve their 8 figure paychecques.



> Since 2007 BHP has taken $US9.5 billion of write-downs, including on its Ravensthorpe nickel project and US shale gas assets. Rio has made nearly $US35 billion of write-downs in the same period.




The Mozambique assets were those of the old Rivendale (RIV) when RIO took them over. How times have changed for the coal space on the ASX... 

With all these writedowns perhaps RIO won't have to pay any MRRT?!


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## notting (17 January 2013)

skc said:


> Guess these guys deserve their 8 figure paychecques.




It's Paicheques stupid.


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## galumay (17 January 2013)

Good to see Albanese gone, the guy was an idiot and destroyed value in Rio at a record pace. As an employee of Alcan when Rio took them over in Albanese's ill fated pre-emptive strike against BHP, I can honestly say I have never worked for a worse run company. I suspect the lackey that replaces him will be just another Rio yes man and nothing will improve.

Working for them is an insight into just how immensely profitable digging holes and putting them on ships is, despite all the things they do so badly, they still manage to make sqillions!


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## sydboy007 (18 January 2013)

galumay said:


> Good to see Albanese gone, the guy was an idiot and destroyed value in Rio at a record pace. As an employee of Alcan when Rio took them over in Albanese's ill fated pre-emptive strike against BHP, I can honestly say I have never worked for a worse run company. I suspect the lackey that replaces him will be just another Rio yes man and nothing will improve.
> 
> Working for them is an insight into just how immensely profitable digging holes and putting them on ships is, despite all the things they do so badly, they still manage to make sqillions!




Shame it took so long to get rid of him.

All those bonuses and pay rises and still the shareholders have to wear the costs.

All because the RIO board couldn't bare the thought of being bought out by BHP.  A combined RIO BHP Pilbara iron ore business.  Now that's something I'd like to invest in.


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## qldfrog (18 January 2013)

galumay said:


> Good to see Albanese gone, the guy was an idiot and destroyed value in Rio at a record pace. As an employee of Alcan when Rio took them over in Albanese's ill fated pre-emptive strike against BHP, I can honestly say I have never worked for a worse run company. I suspect the lackey that replaces him will be just another Rio yes man and nothing will improve.
> 
> Working for them is an insight into just how immensely profitable digging holes and putting them on ships is, despite all the things they do so badly, they still manage to make sqillions!



if it helps, I worked for BHP and believe Marius is even worse: I really though I worked for the worse run company!
But he is still there and as you point out for RIO, the whole structure is full of spineless yes men so I do not see much good coming in the near future.
I only trade BHP/RIO as short term trading, I would not invest any dollar there.
As for making profit, how hard is it when you sell product you get basically for free yet ...
These mining company are basically logistic and marketing giants, and they do not even need to do the actual exploration, they just buy junior assets.


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## Garpal Gumnut (18 January 2013)

It will be interesting to see how it ends up bar and volume wise today. 

I'm still a considerable holder, hoping for a pull back to top up, but it may have eluded me, this time.

gg


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## sydboy007 (18 January 2013)

most of the board should resign as well.  they gave the go ahead for the idiocy.

it amazes me how those at the top seem to wear little of the blame.


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## qldfrog (19 January 2013)

Garpal Gumnut said:


> It will be interesting to see how it ends up bar and volume wise today.
> 
> I'm still a considerable holder, hoping for a pull back to top up, but it may have eluded me, this time.
> 
> gg




I would have thought you would have been lucky yesterday as I expected the worse for the SP but Rio shot up...
I do not complain as I had just bought a small parcel just before the announcement as part of my medium term trading (eyeing the 80$ a share target)
Wait and see


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## Garpal Gumnut (19 January 2013)

qldfrog said:


> I would have thought you would have been lucky yesterday as I expected the worse for the SP but Rio shot up...
> I do not complain as I had just bought a small parcel just before the announcement as part of my medium term trading (eyeing the 80$ a share target)
> Wait and see




Good buy, qldfrog.

I'm waiting for a retracement to $60 or a decisive move beyond $70 to add to my holdings in RIO.

As soon as I heard Albanese was given the boot, I thought the sp would go up. 

gg


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## notting (19 January 2013)

When a stock flushes the toilet it's often a turn around moment, although, that really did happen a bit further back.
This was like clearing the gravitation field as far as my ride is concerned.
If we do get an unlikely pull back, I probably will buy more.
What a total idiot that guy was.
Some of these OS knobs are simply unbearable to watch.
I really like Sam Walsh even though he was there throughout, it's hard to shoot the captain and sometimes none of your business, so he should be given a clean chance and that's what seems to have occurred.
One good thing they all did was stop the China bid, skillfully!


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## PinguPingu (13 February 2013)

The big man's reporting in tomorrow, will be interesting to see if the interplay between profits and MRRT will be of any weight..wonder if Rudd will give another comment....

Anyway, with the resources rebound I don't think there should be any nasty surprises.


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## PinguPingu (14 February 2013)

First ever loss at $ 2.9b due to big write-downs. Underlying earnings at 9.3billion with a 15% increase in dividends  Tax credits helped cushion it, lol. Not too bad in my opinion. Good have been worse, really. Other holders thoughts?


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## galumay (14 February 2013)

PinguPingu said:


> Good have been worse, really. Other holders thoughts?




How much worse could it have been, surely that is one of the greatest destructions of value in sheer dollar terms?


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## Garpal Gumnut (14 February 2013)

PinguPingu said:


> First ever loss at $ 2.9b due to big write-downs. Underlying earnings at 9.3billion with a 15% increase in dividends  Tax credits helped cushion it, lol. Not too bad in my opinion. Good have been worse, really. Other holders thoughts?




Thank gord for the ALP, without Swannie and Ma Gillard's capitulation, this could have been a worse result.

MRRT go !

gg


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## tinhat (14 February 2013)

Wow - just a bad year all round. Every division's results were down substantially. Aluminium underlying earnings down 99%! Underlying earnings from coal down 74%! 

Capex exceeded cash flow.

The write-downs don't really matter IMHO - it was given that Rio had dud asset valuations on the balance sheet.

I'm fairly sure that the market is going to look through this report. No substantial new output was added to iron ore other than efficiency gains over the past year. That said Rio is down 1.13% in London as I type.

I think the outlook for Rio Tinto and the materials sector is a story that is going to play out over a longer period this year.

Go through the numbers for each business division and look at the capex versus gross earnings. Wow, just wow, its an income/loss statement perfect storm in terms of slump in earnings (price driven) against massive capex.

To have faith in Rio at the moment is to believe that iron ore prices are going to be somewhere around where they are now in 2015 when the expanded capacity in iron ore fully comes on stream.


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## Knobby22 (14 February 2013)

It looks like the plan is to runwhat they have more efficiently and to try to stop doing stupid things.
From the Age following:

Mr Walsh (the new ceo) said in his statement that this year and 2014 will attempt to lift margins at existing businesses "by unlocking substantial productivity improvements, aggressively reducing costs and better managing our sustaining capital".

"We are targeting cumulative cash cost savings of more than $US5 billion to be achieved over the next two years, equivalent to an annual run rate of $US3 billion by 2014, assuming stable market and operating conditions, with significant additional cash savings in sustaining capital expenditure and exploration and evaluation spend."

Read more: http://www.theage.com.au/business/e...-first-loss-20130214-2efer.html#ixzz2KsHBbtff

At least the new CEO understands the business. Looking at the profits though its iron ore, a little copper and then not much else. Aluminium is meant to have made a lousy 3 million. That probably isn't even correct.


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## Garpal Gumnut (14 February 2013)

I have traded RIO long term on monthly charts, and anyone buying now is brave, though may be correct.

I see a retreat to close to $60, and my gumnuts are ready to buy.

$75 has been a difficult point to breach for the long.

I feel it needs a bit more umph in volume and momentum from a lower price to progress to $90.







gg


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## Garpal Gumnut (17 February 2013)

RIO is very gappy at present.

I still hold by my prediction of a retracement.






gg


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## Knobby22 (17 February 2013)

Definitely a good chance. 
You would have thought the price would have dropped more with all the bad news previously.
I wonder if it just an iron ore price play now?


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## Julia (17 February 2013)

Knobby22 said:


> You would have thought the price would have dropped more with all the bad news previously.



Perhaps optimism that Sam Walsh will do a better job and it's upside from here?


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## tinhat (18 February 2013)

Knobby22 said:


> Definitely a good chance.
> You would have thought the price would have dropped more with all the bad news previously.
> I wonder if it just an iron ore price play now?





Julia said:


> Perhaps optimism that Sam Walsh will do a better job and it's upside from here?




I read an article on the weekend that puts it into perspective. Iron ore made up > 100% of earnings in the first half. Every other business in the group was a just a drag. So Rio Tinto is pretty much a pure iron ore play in my view.

Here is the article:
http://www.smh.com.au/business/rio-simply-cant-afford-to-sit-on-its-assets-20130215-2eijw.html

The one thing Sam Walsh has to do is divest as smartly as he can of pretty much most other businesses. Also, what is the point of having the whole thing run out of London when all the money is being made in the Pilbara? 

If I was running the joint I would try and exit as best I could from everything except Iron Ore, Coal, Copper and the Minerals business. Once I had done that I would close the London office and move the HQ to Perth.


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## Garpal Gumnut (4 March 2013)

Volume is increasing on RIO's falling price.

If it goes through $60 it may continue to $50 before finding support.

My guess is though that support at $60 will show.






gg


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## Garpal Gumnut (14 March 2013)

Garpal Gumnut said:


> Good buy, qldfrog.
> 
> I'm waiting for a retracement to $60 or a decisive move beyond $70 to add to my holdings in RIO.
> 
> ...





RIO closed at $60.70.

It is make up my mind tomorrow. 

to buy or not to buy , that is the question, whether.........







gg


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## Julia (14 March 2013)

Garpal Gumnut said:


> RIO closed at $60.70.
> 
> It is make up my mind tomorrow.
> 
> to buy or not to buy , that is the question,



Why would you want to buy it?


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## Garpal Gumnut (14 March 2013)

Julia said:


> Why would you want to buy it?




These are my personal views and not backed up by any links or specialist analysis.

1. $60 is a strong support resistance area.

2. China needs their ore.

3. It could still be a takeover play.

4. All brokers are negative or "hold" on RIO.

5. New CEO with an eye to efficiencies.

6. Gut feel.

gg


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## upandup (20 March 2013)

Down 5% in london and newyork over night.

Do you still think support at $60 will come?


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## notting (20 March 2013)

K K K K K Capitulation!!  *In* a *bull market*!


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## baby_swallow (20 March 2013)

Once again, traders who are well connected to Goldman Sachs made a lot of money shorting the big miners.
They have their shorts before GS announcement - cutting the iron-ore forecast.


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## notting (20 March 2013)

baby_swallow said:


> well connected to Goldman Sachs




Hardly needed to be well connected.
The call that 'IO prices were going to come back a fair bit.' is a call been echoing in markets for months!
Time to buy.


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## Trembling Hand (20 March 2013)

baby_swallow said:


> Once again, traders who are well connected to Goldman Sachs made a lot of money shorting the big miners.
> They have their shorts before GS announcement - cutting the iron-ore forecast.




Actually there has been a steady decline in the amount sold short in RIO over the last 2 weeks.


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## skc (20 March 2013)

notting said:


> Hardly needed to be well connected.
> The call that 'IO prices were going to come back a fair bit.' is a call been echoing in markets for months!
> *Time to buy.*




Does feel like capitulation in iron ore today and also agree with your buy sentiment.

AGO and ARI are probably worthy candidates as well. But both must hold the day's low until close.

And the stop has to be at least 3-4% away from current price to manage any gap risk imo.


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## Garpal Gumnut (20 March 2013)

upandup said:


> Down 5% in london and newyork over night.
> 
> Do you still think support at $60 will come?




No. It is now resistance.

Let's see what happens from here. Am I hurting. Yes. Stop loss approacheth.

gg


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## tinhat (4 April 2013)

Buy at the top, sell at the  bottom. These big guys are geniuses at destroying shareholder value. Albanese was a clown. It takes an Aussie to clean up the mess.



> Rio Tinto hires Deutsche Bank to sell coal assets
> 
> Read more: http://www.smh.com.au/business/rio-...coal-assets-20130404-2h81m.html#ixzz2PRp2Gs6B




I do agree with a strategy that would see RIO divest of everything except for iron ore and copper. They are essentially an iron ore miner and the world's lowest cost one at that which means that they will always be able to clear their production above cost. They have excellent copper assets although Mongolia is subject to some sovereign risk.


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## upandup (4 April 2013)

Where do you gentlemen think we will hit some resistance??


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## MaZed (29 April 2013)

Time to buy?


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## burglar (29 April 2013)

MaZed said:


> Time to buy?




You may ask ... but ...
Financial advice is a no-no on ASF


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## coolcup (16 June 2013)

Looks like a long term descending triangle on both RIO and BHP. Looking to avoid them both until they can break out of this formation. Had a good go at it, but failed recently. Also surprised at just how correlated the two share prices are despite having very different exposures to iron ore. I was expecting BHP to have outperformed much more reflecting its higher weighting to energy.


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## notting (4 November 2013)

Hmmmm>
AGO, FMG, MGX all having wonderful days whilst RIO is a mere .2% or there abouts up.
Am I smelling amateur vs pro or just an opportunity?


----------



## tinhat (4 November 2013)

notting said:


> Hmmmm>
> AGO, FMG, MGX all having wonderful days whilst RIO is a mere .2% or there abouts up.
> Am I smelling amateur vs pro or just an opportunity?




Looking across the bourse the past couple of weeks, I doubt much trading is going on based on fundamentals at this stage. Which is interesting because the market is at the fibonacci level of a 61.8% retracement from the GFC correction.


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## Garpal Gumnut (30 November 2013)

tinhat said:


> Looking across the bourse the past couple of weeks, I doubt much trading is going on based on fundamentals at this stage. Which is interesting because the market is at the fibonacci level of a 61.8% retracement from the GFC correction.




I agree, tinhat, a break above $75 could indicate a wave 3 taking us up to $120.






gg


----------



## tinhat (30 November 2013)

Garpal Gumnut said:


> I agree, tinhat, a break above $75 could indicate a wave 3 taking us up to $120.
> 
> 
> 
> ...




GG - I was referring to the XAO. Interestingly, RIO reached its 61.8% retracement back in November 2010 and bounced around it for a while before heading down to the 23.6% retracement level. $120 here we come ... one day.


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## piggybank (16 January 2014)

Delivering the company’s fourth quarter operational review this morning, CEO Sam Walsh said: “These are excellent fourth quarter operational results, demonstrating continued delivery on our commitments”. It’s fair to say shareholders have had a tough ride in recent years. However, today’s news gives a new shine to the iron ore heavyweight. Higher production and lower spending were the goals set by senior management, including Mr Walsh, in early 2013. Here are some highlights from today’s results.


Pilbara operations exceeded iron ore production forecasts by 2 million tonnes
The ramp-up to 290 Mt/a is on track to be completed by the end of the first half of 2014
Production at the miners huge Oyu Tolgoi gold and copper project is at full capacity
Record annual production and shipments for bauxite
Production of semi-soft and thermal coal improved significantly for the full year
$2 billion of operating cash cost improvements were achieved (relative to 2012)
Capex reduced by over $1 billion (exceeding the target of $750 million)
$3.5 billion of non-core assets were divested
The 290 Mt/a expansion is four months ahead of schedule and $400 million under budget, to be ready by the fourth quarter of 2013. Expansion of the port, rail and power infrastructure to 360 Mt/a is currently underway and due for completion by the end of the first half of 2015. A series of low-cost brownfield expansions will bring on additional tonnes, with a production of 330 million tonnes expected in 2015.
*The Figures*
In 2013, global iron ore production rose to 266 million tonnes (209 million tonnes is Rio’s share). This is a new annual record, up 5% on the prior corresponding period (pcp). Pilbara iron ore set a new quarterly record of 66.5 million tonnes. Overall, mined copper was up 15% in 2013. Production at Kennecott Utah Copper was up 29% on the pcp, thanks to a quick recovery after the pit wall slide last year. Production of copper and gold at Oyu Tolgoi in Mongolia, was approximately 33,000 tonnes of copper and 73,000 ounces of gold in concentrate. Bauxite was up 10% overall, with Rio Tinto Alcan setting a new quarterly record, 7% higher than the pcp.

In the energy division, semi-soft and thermal coal production increased significantly during the year compared with 2012, with four mines achieving annual records – Hunter Valley Operations, Mount Thorley Warkworth, Bengalla and Clermont. Uranium production suffered because of leach tank failures at both Energy Resources of Australia Limited’s (ASX: ERA) Ranger Mine and RÃ¶ssing in Namibia. After failing to sell its diamond business last year, production – largely led by Argyle mine – grew significantly in 2013 compared to the pcp, up 34%. Rio Tinto’s report will no doubt give shareholders renewed optimism moving forward. The most important earner for the miner is iron ore and ramping up production is a no brainer for a company which can produce and ship high quality ore for less than US$50 per tonne. Rio’s reliance on iron ore makes it a riskier investment than BHP Billiton Limited (ASX: BHP), which is a more diversified miner. However, if iron ore prices stay high, Rio shareholders should be handsomely rewarded in coming years.


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## notting (9 December 2014)

"Rio Tinto finance chief Chris Lynch says the sharp fall in the iron ore price in 2014 has caught the mining giant by surprise but rejects claims the company is flooding the market with excess supply."

Read more: http://www.smh.com.au/business/mark...at-5yr-lows-20141209-3m4wv.html#ixzz3LOxB7aRQ

Well thank fricken christ for that. Have you finally found your brain?
No.
'I think we have taken it a bit far boys and totally screwed ourselves.'

Sam Walsh tried to infer the other day that India might take up the slack.


----------



## luutzu (9 December 2014)

notting said:


> "Rio Tinto finance chief Chris Lynch says the sharp fall in the iron ore price in 2014 has caught the mining giant by surprise but rejects claims the company is flooding the market with excess supply."
> 
> Read more: http://www.smh.com.au/business/mark...at-5yr-lows-20141209-3m4wv.html#ixzz3LOxB7aRQ
> 
> ...




Maybe it's all strategic.

They could live with Iron at $45/tonne? Smaller suppliers break even at $80 or $75? Opps... we made mistakes and you guys are now out of business 

Once a mine is shut down, could take a year or two get back up again when the cycle comes round.


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## notting (9 December 2014)

luutzu said:


> Maybe it's all strategic.
> Smaller suppliers break even at $80 or $75? .




The smaller players are irrelevant.  The building massive over build in China is no longer hoodwinking anybody and the amount RIO and BHP have ramped up will still make for over supply even if everyone else falls over, apart from Vale maybe.


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## herzy (10 December 2014)

notting said:


> The smaller players are irrelevant.  The building massive over build in China is no longer hoodwinking anybody and the amount RIO and BHP have ramped up will still make for over supply even if everyone else falls over, apart from Vale maybe.




I disagree slightly.

I know very little about this industry, BUT

- I imagine the small players cumulatively become significant
- I agree that they probably didn't plan this glut, it being largely due to enviro factors (China etc)
- I think that Rio and co will probably benefit from the lack of small players in the longer term.


----------



## notting (13 February 2015)

A 12% rise in dividend woopi doo(sarcastic), after a rather ordinary result with earnings down and margins down may have been better than expected but it's not worth a 6% bounce. 
Tried to bury it with over production.
Oh they announced a 2B buy back.  So what? That means the Chinese will have a greater percentage of it.


----------



## notting (17 April 2015)

> China's consumption of electricity from coal-fired power stations *fell* 10 per cent over the first three months of the year, as overall electricity usage posted one of its weakest performances in two decades.
> 
> The National Energy Administration said China's power consumption fell 2.2 per cent in March compared with a year earlier, as the economy slowed and heavy industry cut back production.
> 
> ...




Heavy industry guess that means making steel and stuff.

But Sam's not worried -



> But Mr Walsh is confident that continued growth in China - even though it's slowed - will save the day in the long run.
> "It should be remembered that growth of just one per cent per year is required for China to reach one billion tonnes of crude steel production by 2030," he said.




He still believes in the miracle of China that grows to infinity at which point it will have built ghost cities on all the stars in the universe.

I'm thinking $40 for RIO.


----------



## luutzu (17 June 2015)

A silly question:

How do you divy up the value of Rio Tinto Group among Rio Tinto PLC (UK) and Rio Tinto Ltd (AU)?

My understanding is this, but not sure if it's correct. Help please.

-----

Rio Group comprises of Rio UK + Rio Aus.

the Annual Report reports the Group results, in US dollar.

The latest 2014 report shows 

Profit:    $US 6,527 million
EPS:             353.1cent

Their notes work EPS out with weighted average shares as below

Rio UK:     1,414.147 million shares
Rio Aus:    435.76 Million shares

Totalling 1.8484B shares

----

Let say I value Rio Group at $100 billion AU, to work out the per share value for Rio Aus, do we take the proportion as above.

That is, $100B / 1.8484B shares = $67.35 per share.

Which mean Rio Aus is worth $67.35 x 435.76M shares that Rio Aus has.



thanks


----------



## skyQuake (18 June 2015)

luutzu said:


> A silly question:
> 
> How do you divy up the value of Rio Tinto Group among Rio Tinto PLC (UK) and Rio Tinto Ltd (AU)?
> 
> ...




Looks like you divided by 1.4848b to get $67.35

But everything else looks right, should be very close to $56aud which is around rio's last close


----------



## notting (3 July 2015)

Listening to Sams recent smug comments is really rather startling.
Claiming that there will be a happy ending to this shift from 'China build' to 'China serve' with unlimited IO supply  really does seem foolish at best and delusional at worst.


----------



## Value Collector (3 July 2015)

notting said:


> Listening to Sams recent smug comments is really rather startling.
> Claiming that there will be a happy ending to this shift from 'China build' to 'China serve' with unlimited IO supply  really does seem foolish at best and delusional at worst.




He probably classes an Iron Ore price of over $40 as a happy ending for Rio.

Rio have been through this with Aluminium, throughout the down turn in aluminium, Rio focussed on reducing costs and now they have a very good aluminium business operating on good margins, Sure it wasn't a happy ending for the high cost producers, but hey, its a pretty good result for Rio, they are now producing more tonnes than they were, at a significantly cheaper cost per tonne and the higher cost producers have bailed leaving Rio to build market share as the price and demand volume continue to slowly improve.


----------



## notting (3 July 2015)

Value Collector said:


> He probably classes an Iron Ore price of over $40 as a happy ending for Rio.
> 
> Rio have been through this with Aluminium, throughout the down turn in aluminium, Rio focussed on reducing costs and now they have a very good aluminum business operating on good margins, Sure it wasn't a happy ending for the high cost producers, but hey, its a pretty good result for Rio, they are now producing more tonnes than they were, at a significantly cheaper cost per tonne and the higher cost producers have bailed leaving Rio to build market share as the price and demand volume continue to slowly improve.




You make way too much sense to be a trader.  
Fortunately your not.
You forgot to add that they are doing a buy back at a great time too. (even though that annoys me because it increases market share of Communist China Inc owned Chinalco. 

Another seemingly smart thing RIO did was selling nearly half the huge Simandou iron ore project in Guinea to Chinalco which has become problematic for Chinalco as  the 20 billion project is stuck on the drawing board, as port and rail plans are stuck in red tape and while Rio has massively expanded its Australian output, hammering iron ore prices and making it tough to justify funding a new project like this.

According to reluctant bankers Chinalco still desperately wants to get it up and running.  
Guess Sam can feel positive about China's urgency on that.


----------



## luutzu (3 July 2015)

skyQuake said:


> Looks like you divided by 1.4848b to get $67.35
> 
> But everything else looks right, should be very close to $56aud which is around rio's last close




oh hey, forgot to reply. 

Thanks for that.


----------



## notting (15 April 2016)

> "Comparing Rio Tinto with Saudi Arabia, which is using a similar tactic to push out U.S. competitors, "is an absolute nonsense," Du Plessis said. "We have no desire to squeeze anybody out of the market. We're not flooding the market. We're not trying to be Saudi Arabia at all."




Whilst at the same time came out yesterday with - 







> The rally in iron ore prices from a record low isn't sustainable, according to Rio Tinto, the second-biggest exporter of the raw material.




Wasn't it Andrew Harding, another RIO Tinto exec, that responded to Andrew Forrests  - 







> “The vandalism of the oversupply strategies which I called out a year ago is being vindicated.”



Mr. Forrest was effectively declaring an end to the rout in IO.

This RIO guy came out immediately and  dismissed Andrew's comments as - 







> “again inventing a narrative”.




Aren't they usually keen to talk the companies up!!

I was long FMG till yesterday where I took profits after it sold off after spiking at the open.
I haven't gone short on it yet.  Gonna see what kind of consolidation takes place and what picture China wants to invent today


----------



## Wysiwyg (21 April 2016)

Wtsiwyg is rolling on the floor laughing at the millions of dollars worth of RIO bought at open price $53.30 and now sitting on an instant loss. Ahh the exuberance.  Thank you.


----------



## Rockon2 (13 August 2017)

Interesting , The bigs now in the race...
*Rio Tinto plots ‘kryptonite’ solution for lithium boom*
*http://www.theaustralian.com.au/bus...m/news-story/f6c59ecef8d5f8922cb1d89da166d6ee*

*Rio’s lithium category-killer set to shock boom’s hopefuls
http://www.theaustralian.com.au/bus...s/news-story/9f7aa77ce22be1192bfb2a1d1374348d
*


----------



## greggles (3 May 2018)

It's been a great run for Rio Tinto since January 2016, but it still can't seem to crack $82 and it's having its third shot at it in the last four months.

Is this a triple top and can we expect another reversal?


----------



## Miner (18 January 2019)

How nice (?) to see such a big stock does not warrant much interest  . Last  and the only posting of the year  was in May 2018.  2017 there was one  posting and in 2016 there were two postings only . It is primarily because all information are published and too big company to behave on a volatile path.
Any way, the report published.
Mr JS the great boss of Rio says this is a solid quarter performance. Is that so Mr JS. 2% more than last year and most of the metrics compared to same quarter of 2017 are negative. Well he has to say solid performance to reflect his bonus entitlement, STI and LTI and *to cut down few hard working employees and contractors wages with automation next day*.


----------



## qldfrog (18 January 2019)

Had no clue it was that bad.i thought rio should be booming
Yeap not good at all,


----------



## Miner (18 January 2019)

qldfrog said:


> Had no clue it was that bad.i thought rio should be booming
> Yeap not good at all,



No worry as market liked it. Probably they have read first paragraph and did not read the data only to track down by mid day  .
One silver lining is that between you and I, have made three postings in 2019 itself to break the drought of 2015, 2016, 2017 and 2018 on Rio Postings


----------



## qldfrog (18 January 2019)

Yes bhp and rio aare so big in term of impact here in qld yet seldom appears in forum talk.maybe the fact both shares prices on the asx are too high vs O/S market...
No sure
Or the fact tgey will be hammered in the next china crash..but not before a last  stimulus from the Chinese government as i see it which will mean a last surge of exports


----------



## Miner (18 January 2019)

qldfrog said:


> Yes bhp and rio aare so big in term of impact here in qld yet seldom appears in forum talk.maybe the fact both shares prices on the asx are too high vs O/S market...
> No sure
> Or the fact tgey will be hammered in the next china crash..but not before a last  stimulus from the Chinese government as i see it which will mean a last surge of exports



Do you realise if Rio and BHP get hammer ?
Australian economy will collapse. All financial institutions and funding agencies are heavily reliance on those two, Telstra, CBA. If they collapse meaning supporting banks and institutions collapse. That gives domino effect. 
Let us not hope that does not happen. Our economy is too small and fragile unfortunately but that is us - WE AUSSIES- leaving manufacturing to others and we became diggers again. Happy with China sucking us and we are happy to give them blood.


----------



## qldfrog (18 January 2019)

That is my view indeed, so TA or FA will not mean much at that stage..


----------



## Cam019 (24 March 2019)




----------



## rederob (7 April 2019)

Rio is now 30% above it's December price - not a bad return in 4 months.
It's also only $20 shy of its all time high.
Lots of people chase minnows while rock solid companies like BHP and RIO are delivering in spades.
Moreover, despite Rio's rapid ascent, it is still delivering a >4% dividend plus franking credits.

What is most telling is that the likes of BHP and RIO are the most scrutinised by analysts and money flows in and out at the very highest levels.  So this tells us that the smartest people around think commodities are are on winner, despite the Brexit issues and despite the ongoing trade issues between the USA and China.
It suggests that even with considerable market uncertainty the likelihood on the biggest miners outperforming is strong.  Further, what is the likelihood of even stronger performances once the global economies are on a more even keel?


----------



## Garpal Gumnut (7 April 2019)

rederob said:


> Rio is now 30% above it's December price - not a bad return in 4 months.
> It's also only $20 shy of its all time high.
> Lots of people chase minnows while rock solid companies like BHP and RIO are delivering in spades.
> Moreover, despite Rio's rapid ascent, it is still delivering a >4% dividend plus franking credits.
> ...




I would guess that once it gobbles up BHP,  RIO will be well on it's way to being a $200 share. 

A great company. 

gg


----------



## Garpal Gumnut (12 April 2019)

RIO seems to have run out of sellers atm, so I guess the price will increase on small volume.

Or would anyone have another opinion?

A weekly chart over 1 year.


----------



## Joules MM1 (12 April 2019)

https://twitter.com/search?q="Minerals Council"&src=tren

https://www.theguardian.com/busines...is-climate-targets?CMP=Share_AndroidApp_Tweet

RIO poss quit minerals council


----------



## Smurf1976 (21 April 2019)

Garpal Gumnut said:


> I would guess that once it gobbles up BHP,  RIO will be well on it's way to being a $200 share.



I assume that comment wasn't serious?

A pretty epic takeover if it did happen.


----------



## qldfrog (21 April 2019)

Will take a while, current mgt of bhp is a great improvement on the last SA bunch so the take over could be delayed but by and large BHP is a dinosaur as opposed to RIO
Unless either change direction radically, a takeover should happen, in the coming decades


----------



## MARKETWINNER (21 April 2019)

For me it is showing kind of sideway direction and hard to forecast. However, there could be special reason for a long-term investment.


----------



## Garpal Gumnut (10 May 2019)

I've been in RIO as a long term investor when I bought at $18-20 from memory and again when I converted Warrants at $35. ( back in the 90's )

I'm interested in it's action chartwise atm. 

I'll post 2 charts. The first a monthly from the beginning of it's listing and the second over the past 6mo. 

It appears to me to be supported at $95 and then $90 and there may be a buying opportunity coming before it moves up beyond $105.

I'd be interested in any chartists' opinions. 










gg


----------



## qldfrog (11 May 2019)

Just my opinion:
Rio share price is a reflection of commodity cycles, quite a pure one, with the added extra of a well managed company, vs bhp...
So a positive edge
More than chartists advice, maybe you could just look at commodity cycles?
This is the way i would go with Rio


----------



## rederob (30 May 2019)

qldfrog said:


> Just my opinion:
> Rio share price is a reflection of commodity cycles, quite a pure one, with the added extra of a well managed company, vs bhp...
> So a positive edge
> More than chartists advice, maybe you could just look at commodity cycles?
> This is the way i would go with Rio



Commodities are generally not well priced, except for iron ore.
Last time RIO breached $100 was back in 18 June 2007 (versus 2 April, 2019).
Presently RIO is outperforming BHP because it is less diversified.
My suspicion is that as soon as the gloss comes off iron ore prices then it will be strongly affected than BHP.


----------



## Garpal Gumnut (1 August 2019)

RIO just paid a decent divi  

gg


----------



## Garpal Gumnut (16 June 2020)

I like RIO.

It always behaves itself price wise. 

$99.99 atm. 

I'll post a chart at end of play.

gg


----------



## Garpal Gumnut (2 August 2020)

I'm looking at adding RIO to my superfund on a breakout above $110 or a retracement below $80. 

Price resistance and support.


----------



## Garpal Gumnut (4 December 2020)

Onwards and upwards the ole RIO. 





gg


----------



## Miner (4 December 2020)

rederob said:


> Commodities are generally not well priced, except for iron ore.
> *Last time RIO breached $100 was back in 18 June 2007 (versus 2 April, 2019).*
> Presently RIO is outperforming BHP because it is less diversified.
> My suspicion is that as soon as the gloss comes off iron ore prices then it will be strongly affected than BHP.



@rederob  Intrigued by Rio Performance and reading some of the previous postings you and @Garpal Gumnut made I have few queries.
DNH Rio but do hold BHP.
Today FMG and Rio both have hiked.
We are crying against China
China is the principal consumer for iron ore from Australia for various reasons. For China - it is better and cheaper - no friendship here.
Australian government's money chest contains high content from iron ore income.
Now Rio has breached $100 - does it indicate China Australia back to business billard table again?
With gold going down means more security and hence more construction - all lead to iron ore.
@redbrob -you commented back in 2019 when no one dreamt of COVID. After one year do you hold the same view?
Back in Aug @Garpal Gumnut  made a classic statement


----------



## Dona Ferentes (5 December 2020)




----------



## Dona Ferentes (5 December 2020)

repost ... somehow I messed up the entry: replying to @Miner

I notice my MND is up some 50% in the last month

and then there is activity at the smaller and more nimble end of the market, taking advantage of good prices:








						Marginal miners surf big iron's $US11b investment wave
					

As Australia's big three iron ore miners prepare to bring new mines into a strong price environment, nimble juniors have already restarted exports.




					www.afr.com
				



"_Six years after it was in the hands of receivers, Nathan River's Roper Bar mine in the Northern Territory shipped its first batch of iron ore two weeks ago and was on Friday loading a second vessel in the Gulf of Carpentaria.  Iron ore from the *Frances Creek mine*, owned by NT Bullion, was also transported to Darwin Port this week awaiting its maiden shipment......_
_Small iron ore projects are emerging from hibernation in WA too; *GWR *began blasting at its *C4 iron ore project* near the gold town of Wiluna on Thursday and was mining on Friday in the hope of trucking ore 711 kilometres west to Geraldton port next month....._
_Fenix Resources is also hoping to begin shipping through Geraldton next month from its mine 490 kilometres inland."_


----------



## Miner (5 December 2020)

Dona Ferentes said:


> View attachment 115876



Great figures and thanks.
With about US$1.4 b worth of Capex generating operational values in Dec, Roy Hill not included and another US$8.6 B capex by 2021-22, I speculate the following :
1. All the companies on their investment calculations back at approval stage have allowed current relation with China and current China Oz political conflicts are storm in tea cup;
2. In 2022 there will be enough appetite for iron ore and steel to meet the IRR;
3. Iron price will sustain and not become $135 to $65 per ton,
4. Iron is in bull market for next 6 years.
5. I can safely retire in 2024.
I am optimistically selling ice to Igloo residents and sand to Arabs.
Regards


----------



## Garpal Gumnut (5 December 2020)

Miner said:


> @rederob  Intrigued by Rio Performance and reading some of the previous postings you and @Garpal Gumnut made I have few queries.
> DNH Rio but do hold BHP.
> Today FMG and Rio both have hiked.
> We are crying against China
> ...



Well as anyone familiar with my posts on fundamental analysis knows I am a person of very high principles.  

Until the comrades in China stop paying higher and higher prices for iron ore and I can see Chinese tanks on the Townsville Ring Rd. I will continue to hold and add RIO to my Super Fund.

Ole Bob Menzies sold Iron Ore to the Japanese right up to the outbreak of WW2 and I don’t believe his grandchildren are presently begging on the streets.

The market is always 6-12 mo. ahead of politics.

If you think the Chinese will put principles before Iron ore buy a dog. If not RIO.

Business always outranks politics imo.  

gg


----------



## Miner (5 December 2020)

Garpal Gumnut said:


> Well as anyone familiar with my posts on fundamental analysis knows I am a person of very high principles.
> 
> Until the comrades in China stop paying higher and higher prices for iron ore and I can see Chinese tanks on the Townsville Ring Rd. I will continue to hold and add RIO to my Super Fund.
> 
> ...


----------



## Garpal Gumnut (7 December 2020)

RIO hit 52w high today.





gg


----------



## Garpal Gumnut (7 January 2021)

Well.  There she blows. 

gg


----------



## qldfrog (3 March 2021)

And we camarades can rejoice that Rio has embraced the Reset and pushed by our union leaders, sorry super leaders, is sacking chairman and ceo.
What a beautiful world we are living...or is it leaving?
I would suggest a non white non male non western  HR specialist as the next chairwoman, cause who care about abilities anymore
https://www.reuters.com/article/us-rio-tinto-chairman-idUSKCN2AU2QS


----------



## Garpal Gumnut (19 April 2021)

This little piglet RIO seems destined for a run. Nice start to an EW 3.

gg


----------



## Garpal Gumnut (4 May 2021)

RIO seems to have a gallop on this morning. Not huge volume. But up 1.9% already.

I wonder if this is the leg up over $130.00 and then to $150.00.

gg


----------



## Garpal Gumnut (10 May 2021)

Gone through $130

gg


----------



## barney (10 May 2021)

Garpal Gumnut said:


> Gone through $130
> 
> gg




Well done Garps  

Its a 4 bagger on SP alone, and I assume the Divvis paid over the years would be double your original investment.

Nice when a plan comes together

ps It's gone up another buck as I typed, lol.


----------



## over9k (10 May 2021)

This thing's been giving me the shits since december. Definitely a value stock (and a bloody good one at that).


----------



## Garpal Gumnut (12 May 2021)

RIO has retraced to $129.95 at 3.43 pm. I guess it will potter about $130.00 for a while. 

gg


----------



## rederob (12 May 2021)

An interesting comparison:







			https://www.tradingview.com/x/RASsvBtA/


----------



## boofhead (12 May 2021)

At the GFC time RIO had a lot of debt. After surviving that they reduced their debt a lot which could explain the bigger drop for RIO at the time of GFC.


----------



## qldfrog (12 May 2021)

boofhead said:


> At the GFC time RIO had a lot of debt. After surviving that they reduced their debt a lot which could explain the bigger drop for RIO at the time of GFC.



I have to say on the mining side: process, vision, technology..from what i knew then working with the big miners up to 5y ago: RIO was MUCH better than many of the other main competitors


----------



## divs4ever (27 July 2021)

i do not hold RIO

 RIO will be putting out it's results soon ( within the next 2 days )

 will it meet expectations  or rattle the commodities  market 

 ( i hold BHP and FMG is out of my target range ) , but am still watching some smaller iron plays  , i am hoping for some contagion if RIO disappoints


----------



## striek (28 July 2021)

Earnings are out. I believe RIO handily beat consensus despite a bad miss on unit costs and IO shipments.

Dividend is eye watering at US$5.61/share.

Very curious how the market responds, and as above, clues as to what this means for BHP and FMG.


----------



## over9k (28 July 2021)

striek said:


> Earnings are out. I believe RIO handily beat consensus despite a bad miss on unit costs and IO shipments.
> 
> Dividend is eye watering at US$5.61/share.
> 
> Very curious how the market responds, and as above, clues as to what this means for BHP and FMG.



Yeah the market's priced in an awful lot already. I can't think how many companies I've seen beat even massively inflated expectations and still nosedive on the news.


----------



## divs4ever (28 July 2021)

i will be watching to see 'the ripple-effect' 
 i doubt that effect will help me in the coming week  , but who knows 

 good luck everyone


----------



## Garpal Gumnut (11 August 2021)

RIO would appear to be the Crown Casino of International Diggers.

No matter how much bad press she gets, what nation or belief they stuff up, up she gets for another run. 

I had seriously considered exiting a very long term holding but will stay in for another 5 years.

I guess the UK and Australian economies must depend so much on RIO to provide in-short-supply cash, much like GM in the USA.

They could blow up Canberra with the epicentre at Parliament House and the price would only advance.

And we would all cheer here at the hotel.

gg


----------



## dyna (13 August 2021)

Ex div date yesterday. S. P. down 7 % on not particularly huge volumes. Insto's trimming their large holdings, probably. Clever, eh?


----------



## Garpal Gumnut (13 August 2021)

I have adjusted my buy/sell levels for RIO. 

Sell :  Don’t 

Buy :  Above $130.00
           Below. $105.00






gg


----------



## Dona Ferentes (13 August 2021)

dyna said:


> Ex div date yesterday. S. P. down 7 % on not particularly huge volumes. Insto's trimming their large holdings, probably. Clever, eh?



RIO is majority owned by non Aust domiciled funds, for whom imputation credits are of little use. Probably just a bit of FTSE/ ASX arbitrage.


----------



## dyna (13 August 2021)

Just reading about a June, this year, Senate report  where Rio kept quiet about knowledge of the company's careless loss of native artifacts ( gone missing 25 years ago, from traditional lands where it has six iron ore mines). Some important stuff loaned out to the N.T. University even turned up on a Darwin rubbish tip !
They have one Aussie on the board now, so maybe a bit of sensitivity to the original landowners could be forthcoming. Can't be that difficult, surely?


----------



## divs4ever (11 September 2021)

U.S. House committee moves to block Rio Tinto's Resolution mine









						U.S. House committee moves to block Rio Tinto's Resolution mine By Reuters
					

U.S. House committee moves to block Rio Tinto's Resolution mine




					www.investing.com


----------



## over9k (11 September 2021)

Indians not getting enough or something. They'll work it out (pay the necessary bribes).


----------



## divs4ever (11 September 2021)

must have forgotten to bribe the appropriate government official

maybe the Indians don't trust RIO ( they are not Amish they do communicate globally )


----------



## qldfrog (11 September 2021)

divs4ever said:


> must have forgotten to bribe the appropriate government official
> 
> maybe the Indians don't trust RIO ( they are not Amish they do communicate globally )



It's ok, they can always go back directly to Biden when he wakes up from his nap. Bribes run into the fsmily it seems


----------



## qldfrog (12 September 2021)

More trouble ahead

https://www.reuters.com/article/us-...on-to-stop-industrial-pollution-idUSKBN2G70EN


----------



## divs4ever (12 September 2021)

but , but isn't lithium  going to make clean batteries ??

 seems we still have NIMBY 

 maybe the lithium fairy will come  along and magically  zap into existence a million tonnes of processed lithium every year , so nobody will have to  mine and process it


----------



## mullokintyre (5 November 2021)

Rio and its subsidiary Alcoa say they are another step closer to net zero emissions.
From The OZ business review


> Rio Tinto and Alcoa say they are another step closer to decarbonising their global fleet of aluminium smelters after successfully completing trials of a technology that could eliminate the use of carbon anodes at their smelters.
> 
> 
> Combustion of the carbon anodes was worth about a quarter of Rio's total emissions of about 31.5 million tonnes of carbon dioxide equivalent in 2020, and the company has been working with Alcoa since 2018 to develop an inert anode that would eliminate a major cause of emissions in the 100-year-old smelting process.
> ...




Hit a 12 month low yesterday, so bought in with the expectation of a buyback  this year.
Must be due for one.
Mick


----------



## mullokintyre (17 November 2021)

Got out of RIo with a neutral net.
Bought in at the 12 month low in the hope of a share buyback.
Talk now is that they may well follow the Shell petroleum  initiative and get rid of the cumbersome  dual listing structure.
Did not want to be in it with that prospect hanging over it.
Mick


----------



## Garpal Gumnut (18 December 2021)

Something is happening at RIO.

Extraordinary volume between just under $98 and just under $100.

gg


----------



## Dona Ferentes (18 December 2021)

Garpal Gumnut said:


> Something is happening at RIO.
> 
> Extraordinary volume between just under $98 and just under $100.
> 
> gg



FTSE index / sector reweight in London now BHP is coming home?


----------



## Garpal Gumnut (18 December 2021)

Dona Ferentes said:


> FTSE index / sector reweight in London now BHP is coming home?



Ah so. 

Thanks.

gg


----------



## dyna (19 December 2021)

On the wrong thread, again....
Now Woodside is said to be considering a London listing. New York, too I think.
Mais, pourquoi ?


----------



## Garpal Gumnut (30 December 2021)

RIO is one of my picks in the CY22 Competition. Expensive at $100 you say. 

It has survived desecrating cathedrals and those responsible have been burnt at the stake.

New management with China experience.

Onwards and upwards for this miner, possibly to double imo. What can go wrong  

gg


----------



## Garpal Gumnut (6 January 2022)

Well RIO is the only stock in the Green in my LT portfolio today.

gg


----------



## CityIndex (20 April 2022)

Rio Tinto warned of a challenging first quarter of production earlier this morning, and after facing rejection on another attempted break above $123 yesterday, it will be interesting to see whether this news triggers a deeper pullback today.

However, the company also stuck to its guidance for iron ore and copper production. So, given the surge in commodity prices, perhaps the stock can continue to find support between $117-$118 as it has on multiple occasions already this year.

All trading carries risk, but $RIO looks like it could be worth keeping an eye on today.


----------



## qldfrog (24 June 2022)

Very extensive research  found here








						Should You Buy Rio Tinto For Its 17% Dividend Yield? (undefined:RIO)
					

Even if we ignore the special dividend, Rio Tinto (RIO) still has a dividend yield of 13% from its ordinary dividend alone. Click here for a detailed review...




					seekingalpha.com
				



I owe some.


----------



## Dona Ferentes (5 July 2022)

_What are the chances of RIO holding on the these tenements? Brown paper bag time for the Minister._

Guinea’s mines minister has ordered all work related to the Simandou iron ore mine project to be halted after the two companies involved missed an extended deadline to agree on a joint venture, a letter seen by Reuters shows.

Rio Tinto’s Guinea subsidiary Simfer and Chinese-backed consortium Winning Consortium Simandou (WCS) have shown a “lack of willingness” to work on a partnership, Mines Minister Moussa Magassouba said in a July 3 letter addressed to both companies.

Rio Tinto has held rights to Simandou since 1997.

In a later statement, the government said it was open to discussions with new partners in the ambitious project that aims to extract iron ore from Guinea’s remote hinterland to a port hundreds of kilometres away, but which has been dogged by delays in recent years.


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## Dona Ferentes (15 July 2022)

Shares are trading down to $92. Iron Ore dropping to US$100 for 62Fe, and an ambiguous update on costs. (And AUD is down to around USD 0.67 now)

Rio retained its promise to keep unit costs between $US19.50 and $US21 per tonne, but changed its assumption for the value of the Australian dollar this year from an average of US75¢ to US71¢.

A 5 per cent decline in the Australian dollar should notionally reduce the US denominated cost of exporting Australian iron ore because the wages paid to Rio’s Australian workforce are in Australian dollars.



> _But Rio did not lower its unit costs in lockstep with its change to foreign exchange guidance; a move that is tantamount to raising unit cost guidance_.


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## SirRumpole (21 July 2022)

RIO hit with $1 billion tax bill.









						Rio Tinto agrees to pay nearly $1 billion in tax avoidance settlement with ATO
					

Rio Tinto will hand over $1 billion in unpaid taxes after an ATO investigation, in one of the largest settlements in Australian tax history.




					www.abc.net.au
				




Divvies may be under threat ?


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## frugal.rock (21 July 2022)

SirRumpole said:


> RIO hit with $1 billion tax bill.



About ruddy time too.


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## Garpal Gumnut (27 July 2022)

> The 2022 interim dividend of AUD 3.8370 per share is fully franked at the applicable corporate rate of 30%



Quite a miserable little interim divi from RIO, a core part of my SMSF portfolio. 

From the AFR. 



>




I shall have a word with Jakob Stausholm the newish CEO. 

What language does he speak? 

gg


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## Dona Ferentes (27 July 2022)

Garpal Gumnut said:


> Quite a miserable little interim divi from RIO, a core part of my SMSF portfolio
> 
> What language does Mr Stausholm speak?
> 
> gg



Mr Stausholm told me that last year’s interim dividend was unusual in that it was boosted by a special dividend and Wednesday’s dividend was more in line with Rio’s traditional payout policy. (but that was using Google Translate)


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## InsvestoBoy (27 July 2022)

Garpal Gumnut said:


> Quite a miserable little interim divi from RIO, a core part of my SMSF portfolio.




What were you hoping for GG


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## Garpal Gumnut (27 July 2022)

InsvestoBoy said:


> What were you hoping for GG



Same as last year. Interim and Special $7.60

I believe myself they are withholding cash as BHP may make another tilt at them as Iron Ore falls in price. 

I'm waiting for a crash to bulk up on both of them. 

gg


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## InsvestoBoy (28 July 2022)

Garpal Gumnut said:


> Same as last year. Interim and Special $7.60
> 
> I believe myself they are withholding cash as BHP may make another tilt at them as Iron Ore falls in price.
> 
> ...




As a holder does it matter to you too much whether that cash sits in your bank account or theirs?  Once they give it to you the share price will go down by the same amount anyway.


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## Garpal Gumnut (28 July 2022)

InsvestoBoy said:


> As a holder does it matter to you too much whether that cash sits in your bank account or theirs?  Once they give it to you the share price will go down by the same amount anyway.



Thanks @InsvestoBoy 

My attitude towards RIO is similar to that of the late Kerry Packer towards the Federal Government and the ATO of the time back in the 1990's.

RIO has a big heft in mining and metals for historical reasons. The recent behaviour of its board and executives towards investors and workers and indigenous peoples has been atrocious. 

I have pulled more fully franked divies out of RIO than they are now worth so I see no reason to support the high salaries and poor performance of its upper echelons by reinvesting my divies. 

The board has shown extremely poor corporate governance over the last five years, it is lock-stepped in to China much as Germany was to Russian gas and nobody at RIO seems to take any responsibility for atrocious decisions. 

I bought them for b***er all and am along for the ride, until they get taken over by BHP. 

The money is better off in my bank account than some muppet paid close to $20m. or $30m. to do a job my manservant Švejk could do blindfolded. 

gg


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## Garpal Gumnut (3 August 2022)

There is quite an interesting article from my good friend Michael Pascoe in this morning's The New Daily, a newspaper which I believe is owned by Industry Super Funds who cream millions from the superannuation savings of unsuspecting skulls who watch escalator advertisements on the televisions. 

It summarises the tax shenanigans of RIO TINTO one of my core investments, damning them in succinct and reasonable prose. Were I principled I'd sell them. In fact I may do, as the divi has fallen. 

It is particularly damning of the professionals assisting them. 

https://thenewdaily.com.au/finance/...um=email&utm_campaign=Morning News - 20220803

gg


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## rcw1 (5 September 2022)

Good evening
Been reported today (05/09/22)  Rio Tinto chief executive Jakob Stausholm and chief commercial officer Alf Barrios have held a video meeting with senior management of China's state-owned China Mineral Resources Group.  China Mineral was set up by the Chinese regime in August to buy and administer the supply of mineral resources to the country. 

Chinese authorities have in the past expressed a desire to control iron ore pricing having been frustrated by soaring prices throughout the past two years.  Rio Tinto says it looked forward to working with China Mineral to "deepen comprehensive cooperation" in various fields and achieve "win-win" development. “We fully understand the establishment of a safe, sustainable and given the importance of the supply chain in supporting China's economic growth, Rio Tinto will continue to strive to be a trusted partner in China," Mr Barrios says in a statement posted in Mandarin on Rio Tinto's Chinese website.

Ha ha ha ha ha ha

Kind regards
rcw1


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## rcw1 (6 September 2022)

Good afternoon
Been reported Rio Tinto has entered into a binding agreement to acquire all of the remaining shares of Turquoise Hill Resources Ltd it dues not own at $43 per share.









						Rio Tinto and Turquoise Hill enter into definitive arrangement agreement for Rio Tinto to acquire full ownership of Turquoise Hill
					

Rio Tinto has entered into a binding agreement (the “Arrangement Agreement”) to acquire all of the remaining shares of Turquoise Hill Resources Ltd (T



					www.businesswire.com
				




Kind regards
rcw1


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## rcw1 (15 September 2022)

Good morning 
Been reported today 
Rio Tinto has approved a new $US2bn ($3bn) iron ore project in Western Australia with joint venture partner China's biggest state-owned steelmaker, Baowu.

The deal will see Rio take a 54 per cent stake in the Western Range iron ore project in WA's Pilbara with Baowu to own the 46 per cent balance, meaning the Australian resources giant will stump up $US1.3bn of the overall cost.

The 25 million tonne capacity will help sustain production of the Pilbara iron ore blend from Rio's existing Paraburdoo mining hub with construction to start in early 2023 and first production due in 2025. 

The building phase will create 1600 jobs with 800 permanent roles filled by existing works moving over from other sites in the Paraburdoo hub.

The pact will also see Rio and Baowu enter into an iron ore sales agreement at market prices covering up to 126.5 million tonnes of iron ore over approximately 13 years, representing Baowu’s 46 per cent interest in an expected 275 million tonnes of production from Western Range through the joint venture.

Approval from Australian shareholders will be required given Baowu has common ownership through the Chinese government with Chinalco, Rio's biggest shareholder with a 11.3 per cent stake.

A general meeting will be held on October 25 to sign off on the deal.

Rio share of the capital costs are already included in capital expenditure guidance of around $US9-10bn for each of 2023 and 2024.


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## rcw1 (18 October 2022)

Good morning 
Couple of RIO announcements today. 

Of note:
Rio Tinto has confirmed the rich Rhodes Ridge iron ore deposit is on its development horizon.

Rio’s PIlbara operations shipped 69.5 million tonnes of iron ore in the quarter, up 4 per cent on the June period. But Rio said the impact of the derailment on the line from its new Gudai-Darri mine meant its full year exports would come in towards the bottom end of its 320 to 335 million tonne range.

Rhodes Ridge is half owned by the billionaire Wright family, and was at the centre of more than a decade’s worth of legal battles between Wright Prospecting and Gina Rinehart’s Hancock Prospecting over its ownership.

The deposit is one of the richest undeveloped iron ore projects in the world, containing 5.8 billion tonnes of iron ore at an average grade of 62.3 per cent iron. 

Have a very nice day, today

Kind regards
Rcw1


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## divs4ever (18 October 2022)

InsvestoBoy said:


> As a holder does it matter to you too much whether that cash sits in your bank account or theirs?  Once they give it to you the share price will go down by the same amount anyway.



( i do not hold RIO  , but have in the past )

 HELL , YES !! there are only a few companies  i hold ( in the current scenario ) i would trust to use the cash more wisely than me , without first explaining what they plan to do with that retained cash

 a persistent trend in the corporate world is share buy-bucks to prop up a soft share-price , or maybe some extra virtue-signal directors to the board .


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## Dona Ferentes (19 October 2022)

It wasn't Market Sensitive, but the long-term implications are strong, for RIO .... as long as iron ore demand keeps up.



> “_Slowing global demand poses downside risks to China’s strong exports, while consumers remain cautious of the property market,_” the RIO quarterly said.




_Rio Tinto (50 per cent) and Wright Prospecting Pty Ltd (50 per cent) have agreed to modernise the joint venture covering the Rhodes Ridge project in the East Pilbara in Western Australia, home to one of the world’s largest and highest quality undeveloped iron ore deposits.  

The binding joint venture updates an existing agreement between the two parties dating back to 1972 and now provides a pathway for the development of the Rhodes Ridge deposits utilising Rio Tinto’s rail, port and power infrastructure.  

The participants have commenced an Order of Magnitude study, conducted by Rio Tinto, which will consider the development of an operation before the end of the decade with initial plant capacity of up to 40 million tonnes annually, subject to the receipt of relevant approvals.  

Rhodes Ridge contains 5.8 billion tonnes of high grade Mineral Resources at an average grade of 62.3% Fe. The project’s total resource, 6.7 billion tonnes at an average grade of 61.6% Fe, represents approximately one-third of Rio Tinto’s existing Resource base in the Pilbara. A resource drilling program is currently underway to support future project studies_.

..... The 6 billion tonnes of the highest quality iron ore that make up the Rhodes Ridge deposit is concentrated over just 60 kilometres – and located near existing rail, port and renewable power infrastructure. Scoping and planning work will now begin, with a view to achieving the first production by the end of the decade.


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## InsvestoBoy (23 October 2022)

divs4ever said:


> a persistent trend in the corporate world is share buy-bucks to prop up a soft share-price , or maybe some extra virtue-signal directors to the board .




Outside of Australia, dividends are often the subject of double taxation, first corp tax on profits and then again income tax on dividends.

Buybacks are a natural consequence of that taxation regime. Nothing to do with propping up share price or virtue signalling.


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## divs4ever (23 October 2022)

InsvestoBoy said:


> Outside of Australia, dividends are often the subject of double taxation, first corp tax on profits and then again income tax on dividends.
> 
> Buybacks are a natural consequence of that taxation regime. Nothing to do with propping up share price or virtue signalling.



 so how would you interpret the proposed  tax in US of unrealized capital gains  ( which if successfully introduced  is liable to be adopted  by other distressed governments in a modified form )

 i guess our opinions differ on virtue-signalling 

 cheers


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## InsvestoBoy (23 October 2022)

divs4ever said:


> so how would you interpret the proposed  tax in US of unrealized capital gains  ( which if successfully introduced  is liable to be adopted  by other distressed governments in a modified form )




I'm not really in favour of the approach, but it's only for households with a net worth of $100M or more. The top 1% of US household networth is $10M. So we are talking about the top 1% of the top 1%. Like I said, not in favour, but frankly if you have more than $100M in *net worth* in a society that looks like a 3rd world country for huge chunks of the population, you're going to be vulnerable to a bit of redistribution.

I'm gonna guess you haven't bothered to read anything about the actual meat of the proposal at all.



divs4ever said:


> i guess our opinions differ on virtue-signalling
> 
> cheers




You can have an opinion that the sky is purple but it's still wrong. Share buybacks have nothing to do with virtue signalling.


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## divs4ever (23 October 2022)

InsvestoBoy said:


> You can have an opinion that the sky is purple but it's still wrong. Share buybacks have nothing to do with virtue signalling.



   they were meant to be read  as independent concepts  , joined by the idea neither in my opinion  an efficient use  of shareholder capital 

 colour vision  , might be another path you might choose  not to go down ( at least with me )



InsvestoBoy said:


> I'm not really in favour of the approach, but it's only for households with a net worth of $100M or more.




 i see it as a preemptive attempt  to get permission to include the middle class  ( at a later  date )

 Paul Keating would have called it 'bracket-creep ' ( as a best case scenario )


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## rcw1 (2 November 2022)

rcw1 said:


> Good afternoon
> Been reported Rio Tinto has entered into a binding agreement to acquire all of the remaining shares of Turquoise Hill Resources Ltd it dues not own at $43 per share.
> 
> 
> ...



Good morning
Announcement today 


			https://cdn-api.markitdigital.com/apiman-gateway/CommSec/commsec-node-api/1.0/event/document/1410-02592808-5OUIHO8PDIDJHPIHPSNKA43QGG/pdf?access_token=0007JeKgtzLm3CRL6VP8EE0fCPBY
		


Rio Tinto has secured more support for its 'best and final' $C43 ($49) per share deal to take over Mongolian copper mine Oyu Tolgoi's owner Turquoise Hill Resources.

Announced today it had agreements with certain funds and other entities related to Pentwater Capital Management and SailingStone Capital Partners - previously opposed the deal.

A meeting to vote on Rio buying the approximately 49 per cent stake in Turquoise Hill that it does not own has been postponed to November 8.

Rio Tinto has agreed to increase the dissent condition under the arrangement agreement from 12.5 per cent to 17.5 per cent of Turquoise Hill shares issued and outstanding.

The parties have also agreed that the dissent proceedings with the securityholders and certain other claims shall be conducted by arbitration, and the securityholders shall be paid C$34.40 of the consideration following the completion of the arrangement, with the remaining consideration payable following the final determination of the arbitration.

Holding 

Have a very nice day today.
Kind regards
rcw1


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## Garpal Gumnut (2 January 2023)

I've backed RIO in the 2023 comp. 

A solid company until recently but a bit dodgy of late.

It should be $200 by years end, after it falters a bit and BHP finally lobs a takeover bid nobody can refuse.

gg


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