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Wesfarmer agrees to A$776M Kidman buy; BHP flags copper, nickel, oil focus


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Wesfarmer agrees to A$776M Kidman buy; BHP flags copper, nickel, oil focus


Wesfarmer formally agrees to purchase Kidman for A$776M

Wesfarmers Ltd. formally agreed to acquire 100% of Kidman Resources Ltd. for A$1.90 cash per share in a transaction valued at A$776 million. Meanwhile, Wesfarmers agreed with Sociedad Quimica y Minera de Chile SA to amend the joint venture agreement over the Mount Holland lithium project in Western Australia between SQM and Kidman. The takeover is expected to be complete in September.

BHP flags copper, nickel, oil focus in further diversification from iron ore

BHP Group outlined a long-term strategy focusing on copper, nickel and oil for its growth in what experts said is a trend for Australian iron ore majors to look to battery minerals for future growth given an unattractive longer-term iron ore outlook. BHP CFO Peter Beaven said diversifying will enable the company to have more cash at the bottom of cycles and act counter-cyclically given that cash flow volatility could be reduced by about 30% over 20 years by not being solely reliant on iron ore.

Meijin Energy drops bid for mining lease at A$6.7B China Stone coal mine

Meijin Energy Co. Ltd. dropped its application for a mining lease for its proposed A$6.7 billion China Stone coal mine in Queensland, Australia, ABC News reported. The company did not explain the move, but analysts said the project is no longer in line with China's coal policy and is not financially feasible given the difficulty Adani Enterprises Ltd. has faced for the nearby Carmichael coal mine.


* BHP revealed a smaller expansion plan for its Olympic Dam copper mine in South Australia, which may increase production capacity by as little as 20%, rather than the 65% increase planned, The Australian Financial Review wrote, citing CFO Peter Beaven. The expansion could cost as much as US$2.5 billion.

* Workers' unions No. 1, 2 and 3 at Codelco's Chuquicamata operations in Chile decided to wait for the state miner to submit a second offer for a new labor contract after negotiations fell through May 22. The unions and Codelco had agreed to seek a consensus before May 24; however, workers have decided to wait for a new offer May 24 and expect to vote on it between May 29 and May 30, daily Diario Financiero reported.

* Separately, production at the Chuquicamata mine is expected to fall 40% over the next two years as it is undergoing a complex transformation into an underground shaft mine to extend the project's life, Reuters reported, citing an internal forecast. Output from the mine in 2021 is estimated to fall by 182,000 tonnes compared to 2019's forecast 459,000 tonnes, the newswire added.

* Copper producer and recycler Aurubis AG agreed to acquire materials recycler Metallo Group for €380 million. Closing is expected by the end of the year.

* Mincor Resources NL entered into a binding agreement with Independence Group NL to wholly acquire the Long nickel operation in Western Australia, which holds a JORC-compliant resource of 750,000 tonnes at 4.2% nickel containing 32,000 tonnes of nickel.

* Rockfire Resources PLC exercised its option to acquire 100% of the Copper Dome porphyry copper deposit in Queensland, Australia, and will pay A$30,000 cash and A$50,000 in shares to Symbolic Resources Pty. Ltd.

* Boliden AB signed a long-term electricity supply agreement with a wind power developer for annual electricity deliveries of 240 GWh in Sweden and 175 GWh in Finland from wind farms near the mining operations in the Boliden area and the Kokkola smelting operations in Finland.

* Copper producers such as First Quantum Minerals Ltd. and Vedanta Resources PLC are expected to be hit by planned power outages in Zambia, where one of the worst droughts in decades is affecting the output of hydroelectric dams, Bloomberg News reported. Copper producers in Zambia use more than half of the country's electricity supply, according to the news agency.

* First Quantum unit Minera Antares Peru SAC terminated its option to acquire Peruvian Metals Corp.'s Panteria copper project in Peru. Peruvian Metals said it will seek new partners for the project.


* Suspended operations at Newmont Goldcorp Corp.'s Penasquito gold mine in Mexico's Zacatecas state are causing 50 million Mexican pesos in daily losses for the company, according to estimates by Mexico's mining chamber, Camimex. The suspension affects 20,000 people who work directly or indirectly at the mine, Camimex said. The association called on federal and state governments to urgently address the blockade affecting the project, which has been led by trucking contractor company Cava and some members of nearby communities since March, daily La Jornada reported.

* Woomera Mining Ltd. agreed to purchase an 80% interest in Cazaly Resources Ltd.'s Mount Venn gold tenements in the northeastern goldfields of Western Australia.

* Barrick Gold Corp. CEO Mark Bristow said gold miners must focus on more mergers to attract more investment, Reuters reported. "The industry is in decline and we have put ourselves in a very a tight spot because we haven't invested in exploration and our future."

* Mining production in Zimbabwe, especially gold, was stunted in the first quarter due to delays in the central bank's distribution of dollar payments to miners, Reuters reported. Miners in the country are paid in dollars for half of their output and in the local RTGS dollar currency for the rest.

* Bavura Holdings signed an agreement to explore and mine platinum on Zimbabwe's mineral-rich Great Dyke as the country seeks to quickly exploit its reserves by speeding up investment in the mining sector, Reuters wrote, citing the information ministry. Nigerian billionaire Benedict Peters owns a major stake in Bavura.

* Zimbabwe's US$500 million loan from the African Export-Import Bank is backed by Great Dyke Investments' planned Darwendale platinum group metals joint venture between Russian investors and the Zimbabwean military, Bloomberg reported, citing people familiar with the matter. The loan will be paid over four years once the project starts production.

* McEwen Mining Inc. achieved commercial production at its Gold Bar mine in Nevada, outlining production guidance of 50,000 gold ounces for the year at all-in sustaining costs of US$975 per ounce.

* Golden Queen Mining Co. Ltd. completed the sale of a 50% stake in the Soledad Mountain gold-silver mine in California through the sale of its Golden Queen Mining Holdings Inc. unit to Chairman and CEO Thomas Clay and members of his family.

* Canex Metals Inc. signed a letter of intent with a U.S.-based prospector to acquire a 100% interest in the Gold Range property in Arizona.

* Equinox Gold Corp. agreed to sell its Elk gold project in British Columbia through the sale of its Gold Mountain Mining Corp. subsidiary to privately listed Bayshore Minerals Inc. for C$10 million.


* Technology that could capture carbon dioxide emitted by coal plants for use or storage could be a lifeline to pull coal into a "new era" in a lower-carbon energy world, but the expensive technology will likely need the government's help in the form of research and subsidies, according to an exclusive S&P Global Market Intelligence report.

* Mechel PAO reported a 244% year-over-year jump in profit attributable to shareholders for the first quarter to 11.34 billion Russian rubles amid gains on foreign currency debt, while revenue remained flat at 74.86 billion rubles. However, coal production dropped 29% year over year to 3.5 million tonnes, pig iron output fell 12% to 870,000 tonnes, and steel output dipped 12% to 930,000 tonnes.

* Gensource Potash Corp. agreed to form a joint venture company to develop the Maverick potash project within the Vanguard property in Saskatchewan. The Maverick project will be developed alongside the company's other project at the Vanguard area, Vanguard One. Meanwhile, an international fertilizer producer agreed to a 10-year off-take for 250,000 tonnes per year.

* BHP is considering spending about A$800 million to automate 500 haul trucks across its iron ore operations in Western Australia and coal sites in Queensland, International Mining reported, citing CFO Peter Beaven.

* Germany plans to spend €40 billion to soften the impact of a ban on coal mines and coal-fired power plants in parts of the country, Financial Times wrote.

* Despite approving thyssenkrupp AG CEO Guido Kerkhoff's plan to list the group's elevator business, the company's supervisory board remains open to the possible sale of the unit, which drew interest from Finnish rival KONE Oyj, sources told Reuters.

* China Hongqiao Group Ltd. entered into a supply framework agreement with PT Cita Mineral Investindo Tbk, under which the latter will supply bauxite to the former's PT Well Harvest Winning Alumina Refinery until 2021.

* Ausdrill Ltd.'s BTP Equipment Pty. Ltd. unit won a three-year, A$126 million contract extension to provide mining and ancillary equipment to Peabody Energy Corp.'s coal mines in Hunter Valley and Bowen Basin in Australia.


* Sociedad Quimica y Minera de Chile SA's first-quarter earnings slipped to US$80.5 million, or 31 U.S. cents per share, from US$113.8 million, or 43 cents per share, a year ago. Results were hit by lower margins from the company's lithium business due to lower average prices and higher costs related to a new lease payment structure with CORFO, the Chilean economic development agency.

* ASX-listed Talga Resources Ltd.'s preliminary feasibility study for its Vittangi graphite project in Sweden estimated a pretax net present value, discounted at 8%, of US$1.06 billion, a 55% internal rate of return and a 1.5-year payback period after commissioning of the second stage. Capital expenditure is estimated at US$27 million for the first stage and US$147 million for the second stage, including contingency of about 20%.

* AVZ Minerals Ltd.'s extended scoping study for the Manono lithium project in the Democratic Republic of the Congo outlined a pretax net present value of US$2.63 billion, at a 10% discount rate, with an internal rate of return of over 64% based on annual throughput of 5 million tonnes per annum. Capital expenditure for the project is now estimated at US$380 million to US$400 million.

* The Barruecopardo tungsten joint venture project in Spain, owned 70% by Oak Tree Capital Management LP and 30% by Ormonde Mining PLC, started open pit mining at the northern starter pit. Meanwhile, commissioning of the process plant is complete, and it is achieving throughput rates of up to 190 tonnes per hour. The joint venture is planning to mine higher-grade ore sources in the near term.

* Aura Energy Ltd. produced the first samples of yellowcake product at its Tiris uranium project in Mauritania as part of a definitive feasibility study.


* The government of Western Australia noted that about one-third of the successful applicants in the latest round of the exploration incentive program's co-funded exploration drilling program were battery-materials focused. A total of A$5.1 million will be granted to 45 companies and prospectors.

* Drilling activity in the March quarter continued to trend downward after a recent peak in October 2018, according to the Metals and Mining Research team at S&P Global Market Intelligence. Despite this downtrend, however, many companies — especially small-cap pure explorers — received above-average boosts to their share prices after announcing results for their projects during the quarter.

* Tanzania will start voiding inactive mining exploration licenses and distributing the land to small-scale miners that can immediately begin work, Reuters reported, citing Deputy Minister for Minerals Stanslaus Nyongo.

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