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In This List

Rio Tinto H1 profit surges 93% YOY to US$3.31B

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020

Report Outlooks of Lithium and Cobalt

Essential Metals & Mining Insights July 2020


Rio Tinto H1 profit surges 93% YOY to US$3.31B

TOP NEWS

Rio Tinto H1 profit surges 93% YOY to US$3.31B; US$1.10 per share interim dividend declared

Rio Tinto declared an interim dividend of US$1.10 per share, compared to the year-ago interim dividend of 45 U.S. cents per share, after a 93% surge in net earnings to US$3.31 billion in the first half. The dividend, which is equivalent to US$2.0 billion, along with an additional share buyback of US$1.0 billion by the end of the year, will see the company return US$3.0 billion in cash to shareholders. Consolidated sales revenues, meanwhile, totaled US$19.3 billion, US$3.8 billion higher compared to the first half last year, mainly due to higher average commodity prices. Rio Tinto also cut its net debt by US$2.0 billion to US$7.6 billion.

Yancoal seeks to raise US$2.5B to fund acquisition of Rio Tinto coal assets

Yancoal Australia Ltd. will launch a US$2.5 billion equity raising to fund the acquisition of Rio Tinto's Coal & Allied Industries Ltd. unit. The financing will include an entitlement offer to raise around US$2.35 billion, with Yancoal parent Yanzhou Coal Mining Co. Ltd. committing to subscribe for US$1.0 billion. Yancoal also plans to place shares at 10 cents apiece with strategic investors to raise US$150 million, with proceeds earmarked to fund the upfront consideration of the deal. Yancoal shares on the ASX crashed by 41% following news of the equity raising.

BHP, Mitsubishi explore sale of Gregory Crinum coal JV in Queensland

BHP Billiton Group and joint venture partner Mitsubishi Corp. are preparing to initiate a formal auction for their 50/50-owned Gregory Crinum coal complex in Queensland, Australia, The Australian Financial Review's Street Talk blog reported. The asset has not produced coal since November 2015.

DIVERSIFIED

* PT Antam (Persero) Tbk. posted year-on-year growth in the production of most of its metal products during the second quarter, except for gold, silver and alumina. The company produced 6,392 tonnes of ferronickel, 1.1 million wet tonnes of nickel ore, 13,214 ounces of gold, 95,970 ounces of silver, 113,785 wet tonnes of bauxite and 18,368 tonnes of alumina.

* Saudi Arabian Mining Co. witnessed a 109% increase in its net profit to 357 million Saudi Arabian riyals in the second quarter, compared to a year earlier, largely as a result of increased sales and prices for some commodities and tighter costs. Total revenue for the quarter climbed 17% year over year to 3.00 billion riyals on the back of increased sales of ammonium phosphate and gold, as well as higher aluminum and ammonium phosphate prices.

BASE METALS

* Industrias Peñoles SAB de CV's second-quarter profit was over 5x higher at 3.22 billion pesos, compared to the 639.3 million pesos reported in the same quarter of 2016. Total quarterly sales, meanwhile, rose 3.6% year over year to 20.71 billion pesos due to higher average metals prices.

* Southern Copper Corp. is ready to move forward with its Tia Maria copper project in Peru's Islay province after it receives the construction permits, daily El Comercio reported, citing the executive president of Peruvian subsidiary Southern Peru Copper Corp., Óscar González Rocha.

* New Century Resources Ltd., formerly Attila Resources Ltd., awarded a contract to Sedgman for a feasibility study focusing on the rapid restart of operations at the Century zinc mine in Queensland, Australia, via the initial reprocessing of substantial tailings resources at the site.

* European Cobalt Ltd. signed an exclusive option agreement to acquire the Jouhineva cobalt-copper-gold-silver project in Finland.

* The Indian government will offload a 4% stake in Hindustan Copper Ltd. through an offering of 37 million shares in the copper miner, BloombergQuint reported. The floor price was set at 64.75 Indian rupees per share, at an 8% discount to the Aug. 1 closing price of 70.6 rupees.

* Katanga Mining Ltd., a Glencore Plc subsidiary, said some of its past financial statements likely need to be restated as the company's independent directors conduct a review. Katanga also said the review would delay the company's second-quarter financials beyond Aug. 14 and might affect the value and classification of inventories and other assets.

PRECIOUS METALS

* Resolute Mining Ltd. expects the workers at its Syama gold mine in Mali to return to work by the end of this week, MiningNews reported. The strike only affected the sulfide processing unit as 490 workers, of the total 1,800 at the mine, downed tools for 120 hours demanding a bigger wage increase.

* Private equity group, Ibaera Capital GP Ltd., entered a binding term sheet to earn up to a 47.5% interest in Azumah Resources Ltd.'s Wa gold project in Ghana by spending US$13.5 million.

* Endeavour Mining Corp. remains on track to meet fiscal 2017 production guidance of between 600,000 and 640,000 ounces of gold and all-in sustaining costs of between US$860/oz and US$905/oz. This comes after second-quarter output increased year over year to 152,283 ounces of gold from 138,487 ounces of gold produced a year earlier as AISC dropped to US$897/oz from US$901/oz.

* Royal Bafokeng Platinum Ltd. posted a net loss attributable to company owners of 28.8 million South African rand for the six months that ended June 30, swinging from net income of 150 million rand a year ago. The company attributed the loss mainly to a one-off restructuring charge of 57.1 million rand and a lower realized average rand basket price.

* AngloGold Ashanti Ltd. expects to book a headline loss for the first half of between US$80 million and US$98 million, or between 19 cents and 23 cents per share. By comparison, for the first half of 2016, the Johannesburg Stock Exchange-listed miner reported headline earnings of US$93 million, or 23 cents per share.

* A federal court in Argentina ruled that the country's Supreme Court should take up a case related to a government request to suspend operations at Barrick Gold Corp.'s Veladero gold mine, Reuters reported, citing a court filing.

* Mark Skelton and Trevor Birch of Duff & Phelps Ltd. were appointed joint administrators of Asa Resource Group Plc. This comes after the company recently halted trading of its shares on London Stock Exchange, pending the clarification of its financial position as part of a larger investigation over US$4.3 million in funds unaccounted for.

BULK COMMODITIES

* There appear to be some questions as to what the recent decision by Australia's Federal Court in favor of the Yindjibarndi native title group against Fortescue Metals Group Ltd. will mean for the wider Australian mining industry. While the Association of Mining and Exploration Companies has raised concerns that the recent court ruling may have far wider national implications, Fat Prophets analyst David Lennox believes the legal dispute is more likely a "one-off."

* Glencore Plc's head of coal assets, Peter Freyberg, said that Australia might have to postpone on its commitments under the Paris climate agreement to keep up its economy, The Australian reported. Freyberg noted that the renewable energy target needs to be abolished, with penalties introduced on anti-competitive electricity producers.

* Mosaic Co. posted second-quarter net income of US$97.3 million, swinging from a year-ago loss of US$10.2 million. Net sales for the period improved to US$1.75 billion, compared to US$1.67 billion a year earlier, with higher sales volumes offsetting lower phosphate prices realized.

* JSW Steel Ltd.'s crude steel production in the first quarter of the new financial year was up 1% year over year at 3.9 million tonnes. Total steel sales climbed 5% on a yearly basis to 3.5 million tonnes in the first quarter. JSW booked consolidated net profit after tax of 6.24 billion rupees and revenue of about 159.77 billion rupees.

* China Investment Fund and the government of Angola are negotiating a project to mine iron ore deposits associated with a steelworks in the country's Kwanza Norte province, Macauhub reported Aug. 1, citing the provincial director of Industry, Geology and Mining, Emanuel de Sousa.

* Crusader Resources Ltd. signed a conditional sale agreement to divest its Posse iron ore mine in Brazil for about 8 million Brazilian reais.

* Mastermyne Group Ltd. was awarded a contract to supply development labor to South32 Ltd.'s Illawarra coal operations at its Appin colliery in New South Wales, Australia.

* Maintenance works impacted on OAO Metalloinvest's iron ore production in the second quarter of 2017, pushing output down by 2.6% year over year to 10.1 million tonnes. An ongoing overhaul at the Ural Steel facility weighed on crude steel production, which dropped year over year by 4.7% to 1.1 million tonnes.

* Ternium SA posted a 62% year-over-year increase in its attributable net income in the second quarter, driven by higher iron ore and steel shipments as well as stronger sales. Attributable net income came in at US$249.7 million, up from US$154.0 million reported in the year-ago period.

* Brazil's competition regulator Cade approved Ternium's acquisition of ThyssenKrupp AG's 5 million-tonne-per-annum slab facility, Companhia Siderúrgica do Atlântico, without restrictions, Metal Bulletin reported.

* A Brazilian regulator cleared Vale's US$2.5 billion sale of its Vale Fertilizantes unit to Mosaic without restrictions, Reuters reported.

* U.S. Steel Corp. said an investigation is underway into an incident at the hot strip mill of the company's Great Lakes Works facility in Michigan. Five employees were transported to local hospitals for treatment. Operations at the hot strip mill remain suspended, but other operations at Great Lakes have not been affected.

SPECIALTY

* Vedomosti reported that PJSC Alrosa does not see the point to increasing production now. Alrosa's target for production this year will not undergo a strong correction as the market will not be able to digest additional volumes of rough diamonds, company President Sergei Ivanov said. Alrosa, as reported, is reviewing plans for sales and production in 2017, and new targets will be ready in September when the company will submit an adjusted budget.

* FMC Corp. saw earnings for the second quarter climb 14% to US$74.7 million, or 56 cents per share, compared to the same quarter of 2016, largely due to strong growth in lithium segment earnings. Lithium segment earnings rose to US$24.2 million from US$16.5 million a year ago, while revenue was up 17% at US$74 million.

INDUSTRY NEWS

* The municipal council of the Colombian town of Ibagué in Tolima department banned all medium and large-scale mining projects in the area, daily Portafolio reported. The decision affects a total of 61 mining concessions that have still not applied for a license from regional environmental authority Corporación Autónoma Regional del Tolima.

* Effective immediately, several major stock market indexes operated by S&P Global Inc. will no longer bring in companies with nonvoting share classes.

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