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Top Vale shareholders aim to distribute company control in new shareholder pact


Essential IR Insights Newsletter - April 2023


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According to Market Intelligence, April 2023


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Top Vale shareholders aim to distribute company control in new shareholder pact


Vale shareholders aim to disperse company ownership in new shareholder accord

Major Vale SA shareholders are close to endorsing a new shareholder pact that would disperse share ownership in Vale within six years, under which no major shareholder will control the decision making for the company, Reuters reported, citing sources. Vale's current 20-year shareholder pact is set to expire in April, and talks among leading shareholders, including Bradespar SA, Mitsui & Co. Ltd. and Brazilian pension fund Previ, are underway for the replacement. Vale, however, clarified that there is no discussion or deliberation within the company about any possible unification of the shares it issued.

BHP, Vale to settle 155B reais civil claim negotiations by June 30

BHP Billiton Group, Vale and their Brazilian iron ore joint venture, Samarco Mineração SA, entered a preliminary agreement with the Federal Prosecutors' Office in Brazil, under which the parties will provide a total security of 2.2 billion Brazilian reais to support the social and environmental remediation programs necessitated by the tailings dam disaster of November 2015. The parties have agreed to conclude negotiations over the 155 billion reais civil claim settlement by June 30.

Alcoa's troubled Australian smelter gets over A$200M of state funding

Alcoa Corp.'s Portland aluminum smelter in Victoria, Australia, will be able to continue operations until 2021, after the company secured a funding package of over A$200 million from the Australian government, The Australian reported.


* On the back of increased production volumes, Finland's state-owned Terrafame swung to €12.2 million operating profit in the fourth quarter of 2016, from a €42.5 million loss in the previous quarter, Reuters reported. Nickel output in the quarter jumped 63% over the third quarter to 3,875 tonnes, while zinc production rose by 37% to 8,680 tonnes.

* Copper miner Antofagasta Plc is exiting the Alto Maipo hydroelectric power project by selling its entire 40% stake to partner AES Gener, the Chilean arm of U.S. power group AES Corp., Reuters reported, citing CEO Ivan Arriagada. The company signed up to the Alto Maipo project to secure power for its Los Pelambres mine in Chile.

* Moody's released upward adjustments to its pricing sensitivities for base metals this year, expecting political issues and speculation to continue driving short-term market activity and high volatility. Moody's expects increasing base metal prices to fall back over the course of 2017, except zinc prices, in the absence of "meaningful improvement in supply/demand fundamentals."

* Freeport-McMoRan Inc.'s unit is asking the Indonesian government for fiscal and legal guarantees that its taxes will remain the same as it transfers to a special mining permit under the country's new mining rules, Reuters reported, citing Freeport Indonesia spokesman Riza Pratama.

* Meanwhile, Kompas reported that the Indonesian government rejected a request by miner Freeport Indonesia to give it a contract extension until 2041, unless it changes its current contract of work to special mining business license. Deputy Energy Minister Arcandra Tahar said every entity, with no exception, should follow the new regulation to change its contract scheme.

* Celsius Resources Ltd. will purchase Opuwo Cobalt Pty. Ltd., which holds an option to acquire the Opuwo cobalt project in Namibia.

* Sage Gold Inc. signed a deal to acquire a 698-hectare land package at its Onaman copper-gold-silver property in northwestern Ontario from Jien Nunavik Mining Exploration Ltd.


* AngloGold Ashanti Ltd. is in talks with unions over its plan to lay off 849 workers out of its 25,000 employees in South Africa, Reuters reported, citing a letter signed by AngloGold Ashanti COO Chris Sheppard. The letter, addressed to unions, attributed the planned layoffs to "operational requirements."

* Barrick Gold Corp. unit Acacia Mining plc produced 829,705 ounces of gold in 2016, a 13% year-over-year increase that beat guidance for the year.

* S&P Global Ratings revised its outlook on Russian gold miner Polyus Gold International Ltd. and its subsidiary PJSC Polyus to positive from stable, while the affirming long-term corporate credit rating on both companies at BB-. The outlook revision reflects the expectation that Polyus Gold will maintain a conservative financial policy as it moves forward with a new dividend policy and a planned secondary public offering.

* Sibanye Gold Ltd.'s proposed US$2.2 billion acquisition of Stillwater Mining Co. is edging forward as the companies received an early termination of the waiting period with respect to the transaction, satisfying an antitrust condition.

* IDM Mining Ltd. struck a definitive deal to sell its portfolio of properties in Canada's Yukon Territory to StrikePoint Gold Inc. for C$4.2 million in cash and shares.

* An independent preliminary economic assessment for Geologix Explorations Inc.'s Tepal gold-copper project in Mexico estimated an after-tax net present value of US$169 million, at a 5% discount rate, and an internal rate of return of 24%. The project will require initial CapEx of US$214.2 million to establish an open-pit contract mining operation.

* The mineral resource at Avanco Resources Ltd.'s CentroGold project in northern Brazil increased to approximately 1.3 million ounces of gold with the new estimate for the Contact zone, located within the Cipoeiro deposit.

* Red 5 Ltd. will put the processing plant at its Siana gold project in the Philippines on temporary standby by the end of January due to delays in the processing of the environmental compliance certificate required for the construction of the mine's long-term tailings storage facility.

* Polymetal International Plc struck a deal with Polar Silver Resources Ltd. to acquire up to a 50% stake in the Prognoz silver deposit in Yakutia, Russia.

* Investors appear to be taking a more cautious approach to Australian gold floats this year, with companies undertaking more realistic capital raisings and witnessing modest trade in their first days on the ASX.

* Although base metals prices strengthened in 2016, gold remained the top-explored commodity during the year. Due to the overall decline in exploration budgets, gold's share of the global budget surpassed its 2012 share of 47% and accounted for 48% in 2016.

* Shanta Gold Ltd. expects to produce 80,000 ounces to 85,000 ounces of gold this year at all-in sustaining costs of US$800 per ounce to US$850 per ounce. The company achieved record gold production in 2016 of 87,713 ounces, beating the year's guidance of 82,000 ounces to 87,000 ounces.


* Aluminum Corp. of China Ltd. expects its net profit attributable to shareholders to increase about 85% year over year to 380 million Chinese yuan in 2016. Total profit in the period is expected to increase about 7.3x over the prior year to 1.60 billion yuan, based on initial calculations.

* OJSC Novolipetsk Steel's crude steel output in the fourth quarter of 2016 increased 8% year over year to 4.2 million tonnes due to improved productivity following repairs and strong demand for its products, including billet exports. However, group sales in the quarter dropped 4% to 3.6 million tonnes, attributed to a 17% decline in semifinished product sales.

* Rio Tinto's 59.39%-owned Boyne Smelters Ltd. plans to cut 45,000 tonnes of aluminum output, worth up to A$110 million, from its Boyne Island aluminum smelter in Queensland, Australia, and will let up to 30 workers go due to an increase in electricity prices in the state.

* After reaching four-year agreement with the government and energy provider AGL, Alcoa said it will immediately begin work to restart smelting capacity at the Portland smelter that was lost due to a December 2016 power outage. Restoring the curtailed production is expected to take approximately six months, the company added.

* CITIC Resources Holdings Ltd. transferred US$89.8 million plus interest to the Qingdao Public Security Bureau, in line with a civil court ruling, for allegedly breaching an aluminum ingots supply contract with Shanxi Coal Import & Export Co. Ltd. The company's subsidiary previously denied having entered into any contract and considers the claim to be baseless.

* Encanto Potash Corp. finalized a 20-year off-take agreement comprising at least 5 million tonnes of potash per year with the National Federation of Farmers' Procurement, Processing and Retailing Cooperatives of India Ltd., wrote.

* The Hong Kong stock exchange plans to kick off a U.S. dollar-denominated, cash-settled iron ore futures contract in this year in a bid to compete with U.S. and Asian counterparts, Reuters reported.

* Moody's upgraded Fortescue Metals Group Ltd.'s corporate family rating to Ba1 from Ba2 on the basis of substantial debt reduction, cost improvements, and limited near-term capital expenditures. The ratings outlook is stable.

* Evraz Plc's crude steel output dropped 5.7% year over year to 13.5 million tonnes in full-year 2016, while coking coal concentrate production increased 4.9% on a yearly basis to 14.3 million tonnes.

* Yanzhou Coal Mining Co. Ltd. unit Yancoal Australia Ltd.'s attributable coal output totaled 4.51 million tonnes in the fourth quarter of 2016, up 21% from the corresponding year-ago period. Sales volume during the period came in at 6.18 tonnes, reflecting a 25% year-over-year increase.

* Rio Tinto has awarded a bulk earthworks contract valued at A$70 million to Queensland-based civil engineering firm QBirt for the development of critical mine infrastructure at its world-class Amrun bauxite project on Cape York.

* Kommersant reported that United Co. RUSAL Plc will kick off its road show of eurobonds Jan. 20 in Europe, North America and Asia, in a bid to raise over US$500 million to refinance part of its debt of about US$8 billion.

* Davenport Resources Ltd. will start trading on the ASX on Jan. 20. Davenport has been trying to list since late last year and expected to first hit the boards of the ASX in October 2016.


* S&P Global Ratings downgraded its long-term corporate credit ratings for AREVA SA to B from B+, with a developing outlook, mainly due to a condition attached to the European Commission's approval of AREVA's planned €5 billion capital increase.

* Albemarle Corp.'s bondholders submitted €533.3 million in principal amount of 1.875% senior notes due 2021 under its cash tender offer by the early tender date of Jan. 18. Based on the results, the company will not accept for repurchase the 4.150% senior notes due 2024 as the €533.3 million will exceed the maximum repurchase amount of about US$325.2 million. The tender offer has been closed.

* Lithium Americas Corp. said Bangchak Petroleum Public Co. Ltd., through its subsidiary, BCP Innovation Pte. Ltd., signed an agreement for a US$112 million strategic investment, in exchange for increasing its ownership stake to 16.4% of the outstanding common shares of Lithium Americas. Funding will be used to advance construction of the Cauchari-Olaroz project in Argentina.

* De Beers SA will pilot fixed-price forward contracts in its auction sales starting Feb. 16 to give customers guaranteed access to future supply and price certainty, Mining Weekly reported.

* British miner Cornish Lithium signed a definitive mineral rights agreement with Strongbow Exploration Inc. to explore for lithium in Cornwall, Reuters reported.

* Plant design improvements at W Resources Plc's flagship La Parrilla tungsten mine in Spain will allow the mine ore feed to be expanded from the initial 1.95 million tonnes per annum run-of-mine to 3.5 million tonnes per annum run-of-mine.

* Clean Commodities Corp. secured an advanced and drill-ready uranium exploration project in Newfoundland and Labrador, at a cost equating tenure license costs plus a 2% royalty to an arm's-length party.

* Strongbow Exploration Inc. entered into an agreement with Cornish Lithium, whereby the latter has the right to explore for and potentially develop lithium in hot spring brines and associated geothermal energy on all mineral rights held by Strongbow through its subsidiary, Cornish Minerals Ltd. (Bermuda), in Cornwall, U.K.


* The U.K.'s exit from the European Union is slowing down Hong Kong Exchanges & Clearing Ltd.'s launch of a London-Hong Kong connect, which aims to introduce futures products of the London Metal Exchange to Hong Kong and mainland investors, according to CEO Charles Li.

* Mining fatalities in South Africa fell to a new record low of 73 in 2016 from 77 in 2015 amid the government's efforts to improve safety practices, Reuters reported, citing Mineral Resources Minister Mosebenzi Zwane.

S&P Global Ratings and SNL Metals & Mining, an offering of S&P Global Market Intelligence, are owned by S&P Global Inc.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.