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US, Mexico, Canada to end tariffs; AMCU appeal on Sibanye-Lonmin deal dismissed


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Essential IR Insights Newsletter - June 2023

US, Mexico, Canada to end tariffs; AMCU appeal on Sibanye-Lonmin deal dismissed


US, Mexico, Canada outline plan to end steel, aluminum tariffs

The trade dispute between the U.S., Mexico and Canada over aluminum and steel tariffs is set to end as the three countries agreed to drop duties within two days. The U.S. and Canada also agreed to end pending litigation over the tariffs at the World Trade Organization. Canadian steelmaker Stelco Holdings Inc. would actively pursue deals using extra cash it expects to generate from the move, Bloomberg News reported, citing CEO Alan Kestenbaum.

Union appeal over Sibanye Gold-Lonmin merger dismissed by competition court

The Competition Appeal Court of South Africa dismissed an appeal by the Association of Mineworkers and Construction Union to halt the merger between Sibanye Gold Ltd. and Lonmin PLC. The deal is expected to become effective June 7. South Africa's Public Investor Corp. has a 30% interest in Lonmin and may present another hurdle for the merger with concerns about the value of the deal decreasing since it was announced due to a drop in the Sibanye stock price, Bloomberg News reported, citing an anonymous source familiar with the matter.

Tanzania to issue protection order against Acacia's North Mara mine

Acacia Mining PLC confirmed that an environmental protection order will be issued against its North Mara gold mine in Tanzania after a government probe revealed that the mine leaked polluted water into nearby communities and rivers. Local news reports indicate that the company was fined 5.6 billion Tanzanian shilling owing to the breach. Acacia said operations remain unaffected.


* Zambian President Edgar Lungu threatened to "divorce" the local copper units of Vedanta Resources PLC and Glencore PLC amid an increase in mining taxes that sparked tensions between the mining sector and the government, Bloomberg News reported. Amos Chanda, Lungu's spokesman, clarified that the government will not engage in an unlawful seizure of private assets, and that the president was referring to the interest of other investors in the mines. In response, Vedanta’s Konkola Copper Mines PLC told Bloomberg News that it was committed to its operations in the country. Glencore's Mopani Copper Mines Plc declined to comment.

* Sumitomo Metal Mining Co. Ltd. President Akira Nozaki said the company plans to boost production of nickel-cobalt-aluminum cathode materials amid increasing demand for batteries, by increasing its capacity to 10,000 tonnes per month by the end of March 2028, up from 4,550 tonnes per month, Reuters reported.

* Glencore's Kazzinc Ltd. took a US$96.5 million impairment on a US$237 million loan it provided in 2013 to Astana Property Management, the private equity vehicle of Kazakhstan's former dictator, Bulat Utemuratov, The Sunday Times reported. The loan was reportedly used to build luxury apartments and a hotel that have performed poorly.

* Indonesia's state-controlled miner PT Indonesia Asahan Aluminium (Persero) and unit PT Aneka Tambang Tbk may partner with China's Zhejiang Huayou Cobalt Co. Ltd to build a high pressure acid leaching plant and a rotary kiln electric furnace to process nickel into chemicals for electric vehicle batteries, Reuters reported citing a government statement.


* Anglo American Platinum Ltd. is pondering the sale of its Bokoni and Twickenham platinum mines in South Africa as part of its divestment strategy to focus on the flagship Mogalakwena mine, Reuters reported, citing CEO Chris Griffith, who added that the company could pay higher dividends next year.

* Pan African Resources PLC's gold output for the nine months ended March 31 rose 51.4% year on year to 123,771 ounces from 81,729 ounces on the robust performance of its Barberton complex and Elikhulu tailings retreatment plant, both in South Africa.

* DynaResource Inc. intends to lodge an appeal against a recent court decision that favored Goldgroup Mining Inc. in a dispute over the San Jose de Gracia gold project in Mexico.

* Residents near Kingsgate Consolidated Ltd.'s Chatree gold mine in Thailand are in favor of the mine's restart to boost the local economy, Manager Daily reported, citing a survey conducted by government officials. The mine is under arbitration after the government shut it down in 2016 due to environmental concerns.

* Metminco Ltd. reached a binding agreement for a previously announced deal to acquire Colombia-focused Andes Resources Ltd. for 25 new Metminco shares for every Andes share.


* BHP Group was flagged for using improbable potash price projections to justify the economics of its US$5.7 billion Jansen project in Saskatchewan, Canada, The Australian Financial Review reported. The mining giant is said to bank on a price increase of 24% compared to current prices to deliver a project return of up to 15%. Mosaic Co. CEO Joe O'Rourke said that is unlikely as there is little need for new supply. Nutrien Ltd. CEO Charles Magro also said BHP could not gain profit quickly as greenfield potash projects generally have difficulties to create long-term shareholder value.

* The reelection of Australian Prime Minister Scott Morrison could boost approvals for Adani Enterprises Ltd.'s long-delayed Carmichael coal project in Queensland, Reuters reported, citing Minerals Council of Australia CEO Tania Constable.

* The U.S. is reducing tariffs placed on steel and aluminum imported from Turkey to 25% from 50%, Reuters reported.

* Flooding at Xilin Iron & Steel Group Co., Ltd.'s newly launched Cuihongshan iron ore mine in China's Heilongjiang province left nine people trapped underground while 34 were rescued, Reuters reported citing state media reports.

* Clive Palmer threatened to sue Citic Ltd. for "substantial damages" if Western Australia Premier Mark McGowan proceeds with his plan to change a state agreement removing the need for the approval of Palmer's Mineralogy Pty Ltd. for the Sino-Iron expansion project, The Australian Financial Review wrote.

* NRW Holdings Ltd. shares spiked over 10% in May 17 trading after securing a A$137 million earthworks contract at Rio Tinto's Koodaideri iron ore project in Western Australia's Pilbara region.

* BCI Minerals Ltd. optimized the pre-feasibility study for its Mardie salt-potash project in Western Australia based on a new development case, which includes increasing production of salt and sulfate of potash, as well as developing an export facility at the site. The optimized study outlined a pretax net present value, discounted at 10%, of A$560 million, higher than the previous study from June 2018 that estimated a pretax net present value, discounted at 10%, of A$335 million.

* France's Naval Group would be interested in taking over thyssenkrupp AG's marine division if the company offers the unit for sale, Germany's Frankfurter Allgemeine reported citing a source close to the French company, according to Reuters. Thyssenkrupp recently said it would be open to new ownership structures for its units.

* Coal mining services provider Mastermyne Group Ltd. agreed to sell the scaffold and blast and paint component of its Mastertec subsidiary to Radbyrn Pty. Ltd. for approximately A$6.0 million.


* Lynas Corp. Ltd. signed a memorandum of understanding with Blue Line Corp. to build a rare earths separation facility in Texas. The proposed joint venture, to be majority-owned by Lynas, will initially focus on heavy rare earths before dealing with light rare earths. Lynas is considering building new facilities amid regulatory issues related to the removal of radioactive waste from its Gebeng rare earths plant in Malaysia.

* Galan Lithium Ltd. received permits for a fresh round of drilling at its Candelas brine project in Argentina and is now looking to start production inside the window of what has been tipped as a major supply shortage looming within the next five years. Managing Director Juan Pablo Vargas de la Vega said at the Latin America Down Under conference in Perth, Australia, that a maiden resource is now "in sight," likely in the third quarter.

* Hexagon Resources Ltd. will move toward the completion of a feasibility study for the development of a graphite purification and processing plant after a scoping study deemed it to be "a highly attractive investment." Assuming development of the plant in Chelan County, Wash., the scoping study outlined a posttax net present value, discounted at 10%, of A$708 million to A$958 million, a 35% to 49% internal rate of return, and a four-year payback period.

* Sinomine Resource Group Co. Ltd. unit Dongpeng New Materials Co. Ltd. started development of a 15,000-tonne-per-annum battery grade lithium hydroxide plant in China's Jiangxi province, with completion expected in August 2020.

* American Battery Metals Corp. doubled the size of its Temple Mountain vanadium project in Utah to 2,150 acres after staking an additional 52 new claims to the site's northeast.


* Financings in the junior and intermediate mining sectors have picked up in recent months after scraping bottom at the end of 2018 and through the early part of this year, analysts said, with one industry veteran suggesting the worst may be over. In March and April, equity and debt financings were US$664 million and US$1.2 billion, respectively, according to S&P Global Market Intelligence research. That compared to US$103 million in January and US$143 million in February and similarly depressed levels in the last couple of months of 2018.

* Chinese scrap metal imports are expected to slump this month due to uncertainty surrounding new restrictions on copper, aluminum and steel scraps, Reuters reported.

* S&P Global Ratings said the metals and mining industry has accounted for the third-highest number of defaults this year with five, behind the utilities and telecommunications sectors.

* Mining services provider Ausdrill Ltd. will not proceed with a US$500 million debt refinancing amid weakening market conditions in the wake of increasing trade tensions between the U.S. and China. Meanwhile, S&P Global Ratings said the postponement will have no credit impact, as the company does not face immediate liquidity or refinancing risks.

* The Canadian government will invest more than C$325,000 in the Mining Association of Canada for a project that will develop best practices and guidance for the mining sector on climate change risks and adaptation measures.

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

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