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Lundin Mining says no plan to amend takeover offer for Nevsun Resources

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020


Lundin Mining says no plan to amend takeover offer for Nevsun Resources

TOP NEWS

Lundin Mining says no plan to amend takeover offer for Nevsun Resources

Responding to Zijin Mining Group Co. Ltd.'s recent C$6.00-per-share all-cash takeover bid for Nevsun Resources Ltd., Lundin Mining Corp. said it will not amend its previous C$1.4 billion takeover offer for Nevsun. In early August, Nevsun rejected the hostile takeover offer from Lundin, saying the C$4.75-per-share cash offer "fails to recognize the fundamental and strategic value" of its assets, including the Timok copper project in Serbia and the Bisha zinc mine in Eritrea. Meanwhile, shares in Zijin Mining fell by as much as 4.6% in Sept. 6 trading, on concerns that it may be paying too much to acquire Nevsun in the C$1.86 billion deal, the South China Morning Post reported.

S&P raises Newcrest's ratings to BBB with stable outlook

S&P Global Ratings raised its issuer credit rating on Newcrest Mining Ltd. and the issue ratings on its debt to BBB from BBB-, with a stable outlook. The rating agency said it expects Newcrest to sustain its strong credit metrics due to its low-cost production, low gearing, and stable operations at the Lihir gold mine in Papua New Guinea and the Cadia gold mine in New South Wales.

ArcelorMittal strikes deal with Italian steel unions for Ilva takeover

ArcelorMittal reached an agreement with Italian steel unions over its planned acquisition of Ilva International SpA. Ilva's workers will vote on the agreement before it is formally ratified, with the closing date expected on Nov. 1. Italian Deputy Prime Minister Luigi Di Maio said he would no longer oppose the takeover despite previously claiming the tender for the sale was invalid, Reuters reported.

BASE METALS

* CITIC Ltd. unit CITIC Metal Co. Ltd.'s C$723 million investment in Ivanhoe Mines Ltd. will close on Sept. 19 after securing necessary Chinese regulatory approvals. The deal will see CITIC Metal acquire a 19.9% interest in the company, becoming Ivanhoe's largest single shareholder.

* BHP Billiton Group tapped Finland-based Konecranes PLC to replace aging cranes at its Olympic Dam copper mine in South Australia. The new cranes have advanced features that will help BHP further reduce downtime and production losses at the site, according to Scott Montgomerie, BHP supervisor of the floats maintenance execution at Olympic Dam. The crane replacement is part of the company's A$600 million spend during BHP's 2018 financial year to prolong the mine's life.

* Guyana Goldfields Inc. closed the sale of its 6.1% interest in SolGold PLC to BHP for approximately US$35 million.

* Intrepid Mines Ltd. struck a conditional deal to sell its Intrepid Mines Zambia Ltd. unit to Consolidated Mining and Investments Ltd. unit Vulcan Copper Ltd. for US$5 million.

* Mantos Copper S.A. said a fire affected its sulfur plant at the Mantos Blancos copper mine in northern Chile, El Mercurio de Antofagasta reported. No workers were harmed, and the company is conducting an internal investigation on the incident.

* Raiden Resources Ltd. paused drilling activities at the Stara Planina copper project, pending the confirmation of the property's license extension.

* Peru canceled the mining concession for Camino Minerals Corp.'s Red Beds 2 copper deposit, which was granted to subsidiary Minquest Peru S.A.C. in March, Gestión reported. The concession included a landmark area known as the Rainbow Mountains of Peru, which is part of the Ausangate protected area in the Cusco region.

* Canadian Zinc Corp. completed a previously announced restructuring, backed by shareholder approval. The reorganization resulted in the company splitting into a publicly listed holding corporation, named NorZinc Ltd., and a directly held operating subsidiary retaining the name Canadian Zinc.

PRECIOUS METALS

* Pretium Resources Inc. hit back against Viceroy Research, which shorted the company's stock after releasing a scathing report calling into question its production numbers. The firm said Pretium under-reported how many tonnes of rock it moved at the Brucejack gold mine in British Columbia. "We stand by all our numbers," said Joseph Ovsenek, Pretium President and CEO. The mine has courted controversy over the years, given the highly variable nature of gold mineralization in the deposit.

* Pan African Resources PLC reached a three-year wage agreement with the National Union of Mineworkers, or NUM, and the United Association of South Africa, or UASA, which represent the majority of employees at its Barberton gold mine in South Africa. The deal provides for an average annual wage increase of approximately 6.5% and 5.5% for NUM and UASA members, respectively.

* R.J.K. Explorations Ltd. optioned the drill-ready Rolling Pond property, located within the Moosehead gold belt in Newfoundland. It will be R.J.K.'s newest acquisition in the Moosehead gold belt after the Moosehead Gold District and the Moosehead Extension property.

* Barminco Holdings Pty Ltd. was awarded a five-year contract extension, worth approximately A$700 million, to provide underground mining services at AngloGold Ashanti Ltd.'s Sunrise Dam gold mine in Western Australia.

BULK COMMODITIES

* European customers will avoid deals with United Co. Rusal PLC, hit by U.S. sanctions, in an upcoming industry event in Berlin called the "mating season," where 2019 metal supply agreements will be sealed, Reuters reported, citing three anonymous sources. "Customers will be reluctant to negotiate with them this year. We can't take risks with our supply chain, we have to find alternative sources," an aluminum consumer told the newswire.

* Australian Workers' Union members at Alcoa of Australia Ltd. voted against the company's proposed enterprise bargaining agreement that was presented in August. According to a report by Reuters, the workers will continue to strike against the alumina and bauxite producer as a result of the vote.

* Members of the United Steelworkers Local 1066 authorized its union leaders to call a strike against U.S. Steel Corp., should labor talks break down, The Chicago Tribune reported.

* The Queensland government in Australia is seeking public comment on Pembroke Resources Pty Ltd.'s proposed A$1-billion Olive Downs coal mine, Mining Weekly reported. The project would create around 500 jobs a year during construction, and could maintain an average of 1,000 jobs and produce up to 15 million tonnes of coal per year once the mine is running, said Cameron Dick, Queensland's minister for State Development, Manufacturing, Infrastructure and Planning.

* South African iron ore and manganese miner Assore Ltd. hiked its interim dividend 67% year over year to 10 South African rand per share after recording a profit attributable to shareholders of 2.45 billion rand per share for the first half, up from 2.22 billion rand recorded a year ago. Revenue in the period surged to 3.84 billion rand, compared to 3.28 billion rand in the prior-year half.

* Polish coal miner Jastrzebska Spólka Weglowa SA, or JSW, is considering a takeover of Prairie Mining Ltd., which has been developing the Jan Karski and Debiensko coking coal mines in Poland, Reuters reported, citing two anonymous sources.

* MC Mining Ltd. struck a deal with China Railway International Group Co. Ltd. for the engineering, procurement and construction contract at the former's Makhado hard coking and thermal coal project in South Africa.

SPECIALTY

* A scoping study for desert scheelite production at Thor Mining PLC's Pilot Mountain tungsten project in Nevada outlined a net pre-tax income of US$125 million and a 36-month payback period, with an operational life of 12 years.

* Kazakh uranium producer National Atomic Co. Kazatomprom JSC will maintain its "value over volume" plan as it is duty-bound to act "responsibly" and not flood the market with more uranium, the Financial Times reported, citing Chairman Galymzhan Pirmatov. Going forward, the company will revise its production levels to meet forecasts and will also assess the earlier shutdown of some of its mines.

* Uranium prices rose 30% in the past four months on the back of reduced production, halted projects and operations, as well as renewed interest, but analysts are concerned over the commodity's long-term outlook, Mining.com reported.

* Mountain Province Diamonds Inc. fetched US$26.9 million in revenues from its seventh diamond sale of the year. The company sold 411,317 carats at an average realized price of US$65 per carat.

* Golden Deeps Ltd. engaged SRK Consulting (Australasia) to review and update a historical resource estimate for the Abenab vanadium-lead-zinc project in Namibia.

INDUSTRY NEWS

* Peru's Energy and Mines Minister Francisco Ismodes proposed to make a temporary tax benefit for mining companies permanent, Reuters reported. Miners in Peru have enjoyed refunds on an 18% value-added tax rate for around two decades. However, the tax refund, which is set to expire, has drawn flak from opposition lawmakers, who seek to end it this year after the government returned about US$3.63 billion to mining companies in 2016 and 2017.

* President Donald Trump's pick, J. Steven Gardner, has withdrawn his name from consideration to lead the U.S. Office of Surface Mining Reclamation and Enforcement, the government agency responsible for protecting the public from the adverse effects of surface coal mining operations. Gardner cited uncertainty around his confirmation, reversals on conditions provided by the Office of Government Ethics, unknown financial implications and other factors as the reasons behind his pullout.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.

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