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Rio's Q4'18 iron ore output, shipments slip YOY; Turquoise beats FY'18 targets

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


Rio's Q4'18 iron ore output, shipments slip YOY; Turquoise beats FY'18 targets

TOP NEWS

Rio Tinto's Q4'18 iron ore output, shipments slip YOY

Rio Tinto's iron ore production in the fourth quarter of 2018 slipped 1% year on year to 86.6 million tonnes, while full-year 2018 output rose 2% to 337.8 million tonnes, at the upper end of guidance, driven by the ramp-up of expanded mines and minimal weather events. Fourth-quarter shipments dropped 3% year on year to 87.4 million tonnes, while full-year shipments rose 2% to 338.2 million tonnes. Copper output for the quarter climbed 20% year on year to 177,800 tonnes, while bauxite production slid 14% to 11.8 million tonnes. Aluminum output was down 1% to 874,000 tonnes.

Turquoise Hill beats FY'18 copper, gold output guidance

Turquoise Hill Resources Ltd.'s Oyu Tolgoi mine in Mongolia exceeded full-year 2018 production guidance for both copper and gold by 2.6% and 1.8%, respectively, at 159,100 tonnes and 285,000 ounces. The company was targeting to produce between 140,000 and 155,000 tonnes of copper in concentrates and between 240,000 and 280,000 ounces of gold in concentrates. The company's fourth-quarter copper production, however, slipped 8.4% year over year to 41,500 tonnes, while gold production jumped 234.3% to 117,000 ounces in the quarter.

Australian gold midtiers best placed to rise via assets shed from major mergers

The assets likely to be divested from both Newmont Mining Corp.'s proposed US$10 billion takeover of Goldcorp Inc. and the US$18.3 billion Barrick Gold Corp./Randgold Resources Ltd. tie-up could propel some highly successful, cashed-up midtiers into majors, with some in the sector seeing the most opportunity for Australian miners to grow. Industry CEOs and analysts see Australian companies as particularly strong suitors for the assets.

BASE METALS

* Nickel Asia Corp.'s estimated value of shipments in 2018 climbed 20% year over year to 17.29 billion Philippine pesos due to a combination of higher export volume, improved prices and a favorable Philippine-peso-to-U.S.-dollar exchange rate. The company sold 19.35 million wet tonnes of nickel ore at US$16.86/wet tonne, compared to 17.70 million wet tonnes in 2017 at US$16.17/wet tonne.

* Trevali Mining Corp. produced 102.7 million pounds of zinc in the fourth quarter of 2018, compared to 104.8 million pounds of zinc the prior year, while full-year 2018 output reached 406.9 million pounds, against 225.1 million pounds in 2017. Full-year production at the Caribou zinc mine in New Brunswick, Canada totaled 72 million pounds of zinc, which fell within the lowered guidance of between 70 million and 75 million pounds.

* Hillgrove Resources Ltd. restored the section of a wall at its Kanmantoo copper project in South Australia where rockfall occurred in mid-December 2018, and the company restarted mining after securing access to the restricted area. Modifications to the pit design to avoid future accidents are expected to reduce future copper output by about 2,000 tonnes of recovered metal.

* South32 Ltd. agreed to provide US$9 million of funding over four years as part of its phase-one earn-in commitment to secure a 60% interest in Inca Minerals Ltd.'s Riqueza zinc project in Peru.

* Cash-strapped Nautilus Minerals Inc. secured a lifeline after receiving a US$500,000 loan from Deep Sea Mining Finance Ltd. under an existing structured credit facility of up to US$34 million. The seabed-mining hopeful recently said it needed to secure additional funds to continue operations.

* Philippines-based Global Ferronickel Holdings Inc. plans to keep its nickel ore shipments to China in 2019 at the prior-year level of 5.7 million wet tonnes due to expected weaker demand, Reuters reported. The company agreed to sell 1 million wet tonnes of ore to China Baowu Steel Group Corp. Ltd. unit Baoshan Iron & Steel Co. Ltd.

* Operations at Mitsubishi Materials Corp.'s majority-owned Gresik copper smelter has partially resumed, Fastmarkets MB wrote. An oxygen plant issue is preventing the smelter to return to full operations.

PRECIOUS METALS

* Asanko Gold Inc.'s fourth-quarter 2018 gold output reached 59,823 ounces, lifting full-year production to 223,152 ounces and exceeding its annual guidance of between 200,000 ounces and 220,000 ounces.

* Atlantic Gold Corp. agreed to invest C$9 million in Velocity Minerals Ltd. to secure a 39.2% interest in the company on a partially diluted basis. The companies will work together to advance Velocity's 70%-owned Rozino gold project in Bulgaria through a feasibility study ahead of construction and commissioning.

* Despite "encouraging" drilling results, Allegiant Gold Ltd. is abandoning its Hughes Canyon gold property in Nevada to prioritize other exploration projects.

* A Canadian national who was kidnapped by a dozen gunmen on a site owned by Progress Minerals Inc. near Burkina Faso's border with Niger was found dead, Reuters reported, citing a representative of Burkina Faso's security ministry.

BULK COMMODITIES

* Whitehaven Coal Ltd. achieved record managed run-of-mine coal production of 7.4 million tonnes in the second quarter of its 2019, a 36% increase year over year. Meanwhile, managed salable coal output increased 11% year over year to 5.6 million tonnes. Total coal sales in the three months, including purchased coal, dropped 7% on a yearly basis to 5.4 million tonnes. The company is on track to meet full-year production guidance of 22.0 million to 23.0 million tonnes of salable coal.

* GCM Resources PLC shares surged in London shortly after it reported a joint venture agreement and a definitive engineering, procurement and construction contract with state-owned Power Construction Corp. of China Ltd. to develop a coal-fired power plant at the site of GCM's proposed coal mine in northwestern Bangladesh. The power plant is part of GCM's broader strategy to generate 6,000 MW of low-cost electricity for the Bangladesh market using domestic coal, providing an estimated US$12.5 billion in foreign investment.

* Seeing a strong premium for higher-quality iron ore as a long-term market reality, Alderon Iron Ore Corp. will try to tap backers for funding to build the Kami iron ore project in Newfoundland and Labrador with estimated capital expenditure of US$900.7 million. "We're about to appoint a financial adviser and test the market again," Alderon President and CEO Tayfun Eldem said in an interview.

* A consortium led by state-owned African Exploration Mining and Finance Corp. will submit a bid to acquire Optimum Coal Holdings Ltd. and Optimum Coal Terminal (Pty) Ltd, Mining Weekly reported. Preferred bidder Project Halo, also a South African consortium, submitted the winning bid for the Gupta family-linked firms in December 2018.

* Flinders Mines Ltd. postponed an extraordinary general meeting to vote on its proposed delisting from the ASX after certain shareholders denouncing the move approached the Takeovers Panel. The meeting was moved to Feb. 6 from Jan. 22.

* Integrated contractor Eastern Tree Services vowed to not accept work on Adani Enterprises Ltd.'s controversial Carmichael coal project in Queensland amid pressure from activists, The Guardian reported.

* Turkish steel mills might be forced to reduce production further or shut down due to the European Commission's decision to extend steel import caps, sources told Reuters.

* Total U.S. coal production for the first full week of 2019 rose 13.9% year over year to 15.1 million tons from 13.2 million tons, according to data from the U.S. Energy Information Administration.

* The London Metal Exchange will launch seven new cash-settled futures contracts on March 11, including hot-rolled coil steel and alumina, Reuters reported. Meanwhile, French international banking group BNP Paribas SA applied for category II membership in the exchange, Fastmarkets MB wrote.

* Finnish industrial machinery firm Metso Corp. secured a contract to deliver an iron ore pellet plant and related engineering services to Tata Steel Ltd.'s Kalinganagar expansion project in India's Odisha state.

* Korab Resources Ltd. agreed to supply up to 20,000 tonnes of dead burned magnesia per year to oland-based ZM Ropczyce SA in exchange for research and development support and cooperation to develop new products.

SPECIALTY

* PJSC Alrosa fetched US$463 million from 32 international auctions in 2018 for special-size rough diamonds weighing over 10.8 carats. The Russian miner is planning to hold 37 international auctions this year.

* Base Resources Ltd. revised its 2019 production forecast, slashing ilmenite guidance to 385,000 to 415,000 tonnes from 420,000 to 450,000 tonnes, increasing the top end of rutile guidance by 1,000 tonnes, to between 88,000 and 94,000 tonnes, and reducing zircon guidance to 31,000 to 34,000 tonnes from between 32,000 and 37,000 tonnes.

INDUSTRY NEWS

* The Trump administration may be willing to dial back or even completely remove its crippling tariffs on China as the two countries work toward a trade deal ahead of a looming March 1 deadline, the Wall Street Journal reported. The goal is to advance trade talks and incentivize China to make concessions in a trade war that has rattled markets and begun to harm American companies, according to the report.

* A retired Army officer who was part of Belo Sun Mining Corp.'s advisory board last year returned as the head of Brazil's National Indian Foundation, a government body seeking to protect the rights of indigenous peoples, Reuters reported. Franklimberg Ribeiro de Freitas was fired from the agency in April 2018 by the previous government amid pressure from farmers who described him as too sympathetic to the land rights of indigenous tribes.

* Hancock Prospecting Pty Ltd Executive Chairman Gina Rinehart remained as the richest Australian with a net worth of US$14.8 billion, according to Forbes Magazine's 2019 Australia Rich List. Fortescue Metals Group Ltd. Chairman Andrew Forrest took the seventh spot with a net worth of US$4.3 billion. Mineralogy Pty Ltd.'s Clive Palmer and QCoal Pty Ltd's Chris Wallin came in at No. 20 and No. 41, respectively.

* The amount of capital available for private fund managers to invest totaled $2.099 trillion as of the end of June 2018, up from $1.779 trillion at year-end 2017, according to the latest data from Preqin Ltd.

* BlackRock Inc. Chairman and CEO Larry Fink is calling on corporations to step up and fill a leadership vacuum in society as "trust in multilateralism and official institutions is crumbling." Fink pressed CEOs to begin addressing broader societal concerns, ranging from the environment and retirement to gender and racial inequality at a time when "the global landscape is increasingly fragile."

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