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Ex-Vale CEO charged with homicide over Feijao; Mechel skips Elga stake buyback


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Ex-Vale CEO charged with homicide over Feijao; Mechel skips Elga stake buyback


Vale's former CEO, employees charged with homicide over Feijao tailings dam collapse

Fabio Schvartsman, the former CEO of Vale SA, was charged with 270 counts of homicide for the fatal collapse of the Feijao iron ore mine tailings dam in January 2019, Bloomberg News reported. Other former employees were also accused of homicide, while Vale and contractor TÜV SÜD AG were charged with environmental crimes. "Fabio Schvartsman acted directly to create corporate incentives, not to avoid risks, but to channel efforts into protecting Vale's market value," state prosecutor William Coelho told reporters in Minas Gerais. Vale's American depositary receipts on the NYSE closed at US$13.25, down 2.8% for the biggest decline since November.

Mechel's buyback option on top Russian coal mine lapses

Russian coal and steel producer Mechel PAO decided not to exercise its right to buy back a 34% stake in the Elga coal mine, Reuters reported, citing AO Gazprombank, the company's creditor. Mechel had until Jan. 20 to exercise its preemptive right to buy back the stake. A company representative said Mechel abandoned the option because it received an alternative offer. No further details were provided on the offer, which Mechel is reportedly studying. The company still owns 51% of Elga.

Antofagasta books record FY'19 copper production; Q4 output down 5.8% QOQ

Antofagasta PLC booked record copper production for full year 2019 of 770,000 tonnes, representing a 6.2% increase and hitting the upper end of its guidance, due to higher output at its Los Pelambres, Centinela and Zaldivar mines in Chile. Fourth-quarter output, however, slipped 5.8% quarterly to 185,500 tonnes, resulting from planned lower grades and maintenance at the Centinela mine, social unrest disrupting fuel delivery at the Los Pelambres mine, and a workers' strike at the Antucoya mine.


* Zinc prices are expected to fall moderately and will likely average US$2,300 per ton starting April 1 as the market turns to a surplus for the first time after four years of deficits, according to Mitsui Mining & Smelting Co. Ltd.'s metal sales group general manager, Kenji Sugawara, Bloomberg News reported.

* China's Yunnan Copper Co. Ltd.'s net profit attributable to shareholders for full year 2019 is expected to increase between 421.0% and 477.1%. The company attributed the forecast earnings growth to improved cost control and increased sales volume.

* Metals X Ltd. tapped Canaccord Genuity and Hartleys Ltd. as advisers for its strategic review of its assets, which includes the Nifty copper mine in Western Australia.

* An updated resource estimate for Jervois Mining Ltd.'s Idaho Cobalt Operations outlined a 22% increase in contained measured resource to 26.2 million pounds hosted in 2.92 million tons grading 0.45%, at a 0.15% cobalt cut-off grade. As a result, total measured and indicated resources grew to 50.1 million pounds of cobalt contained in 5.77 million tons grading 0.44%.

* The 25-year financial and technical assistance agreement awarded to Sagittarius Mines Inc.'s Tampakan copper and gold reserve in the Philippines set to expire on March 21 has been extended for 12 years until March 21, 2032, Minda News reported.

* Pembridge Resources PLC started a 14,000-meter diamond drilling program at the Minto copper project in Canada's Yukon Territory, which aims to expand the boundaries of the Copper Keel West, Copper Keel North, Copper Keel South and Minto East II deposits, upgrade resources into reserves, and expand existing reserves.


* An updated preliminary economic assessment on AngloGold Ashanti Ltd. and B2Gold Corp.'s Gramalote Ridge deposit, part of the Gramalote gold project in Colombia, generated a posttax net present value of US$671 million at a 5% discount rate, with an 18.1% internal rate of return and a 3.6-year payback period. The study assumed a gold price of US$1,350 per ounce and gold production of 3.85 million ounces over an initial mine life of 13.6 years.

* Ghana is delaying the sale of US$750 million of shares in a gold mining fund as the government reviews the processes for mineral royalty payments, Bloomberg News reported, citing unidentified sources. The public offering was initially prepared for this month, but it has been postponed until March, the sources said.

* AuStar Gold Ltd. terminated its acquisition of under administration Centennial Mining Ltd. and its unit Maldon Resources Pty Ltd., saying it was unable to satisfy its own due diligence requirements.

* Gold Fields Ltd. is said to have obtained the services of RBC Capital Markets for a potential sale of its 30% stake in the Salares Norte gold project in Chile's Atacama region, reported.

* Canada-headquartered First Majestic Silver Corp. expects to produce 21.5 million to 24 million ounces of silver equivalent at cash costs of US$5.76 to US$6.97 per ounce and all-in sustaining costs of US$13.37 to US$15.46 per ounce in full year 2020.

* Highland Gold Mining Ltd.'s production of gold and equivalents shot up 27% year over year to 83,429 ounces in the fourth quarter of 2019, bringing its total output over the full year to 300,704 ounces.

* Cygnus Gold Ltd. started a 20,000-meter aircore drilling program on the Lake Grace and Yandina projects, the company's joint venture with Gold Road Resources Ltd.

* China's 2019 gold consumption dropped 12.9% year on year to 1,002.8 tonnes amid high prices and economic slowdown that hit the world's largest gold market, Reuters reported, citing a statement from the China Gold Association.


* Australia's Finance Minister Mathias Cormann staunchly defended the country's coal use and mining, saying that demand for the commodity is still present and said not all mines are harmful to the environment, The Australian reported. "There is a global demand for coal, and if it's not met by cleaner Australian coal it will be met by comparatively dirtier coal from other sources and the world environment will be worse off," Cormann was quoted as saying in a forum of world leaders in Davos, Switzerland.

* Agrimin Ltd. is planning to help create new demand in Asian markets that currently receive very little sulfate of potash fertilizer but have "massive" potential, supplied from the new potash province being developed in Western Australia. Having now defined the barriers of the salt lake when increasing the JORC 2012-compliant drainable mineral resource for its Lake MacKay by 470%, CEO Mark Savich said the 123.4-million-tonne resource of sulfate of potash was "one of the biggest selling points" to the tier one fertilizer companies with which Agrimin is in discussions.

* Russian steelmaker PAO Severstal invested in Dutch robotics firm Airborne, which has developed automation technology that would help improve efficiency in carbon fiber composite production. Severstal said the deal could enable the company to offer lower prices for composites, which are said to be stronger and significantly lighter than steel, over the next five to seven years.

* PT Indonesia Asahan Aluminium intends to triple its production capacity to 750,000 tons by building a 500,000-ton smelter in North Kalimantan on the Indonesian side of Borneo, as the state-owned company seeks to utilize the region's abundant bauxite reserves, Bloomberg News reported, quoting Managing Director Oggy Achmad Kosasih.

* China's Cedar Holdings Group Co. Ltd. agreed to purchase London-based steel trader Stemcor Ltd. for an undisclosed amount, with the deal expected to be finalized in the first half of 2020, Reuters reported.

* A Brazil federal court ordered the suspension of the licensing process for Honbridge Holdings Ltd. unit Sul Americana de Metais S/A's 9.1-billion-Brazilian-reais Block 8 iron ore complex in the country's Minas Gerais state, Estado de Minas reported. The court's ruling came just prior to the anniversary of the January 2019 tailings dam disintegration at Vale's Feijão mine.

* Allegiance Coal Ltd. inked a binding agreement with Cline Mining Corp. to acquire New Elk Coal Co. LLC, owner of the New Elk hard coking coal in Colorado for US$1 and initial debt repayment to Cline amounting to US$11 million in cash and shares.


* Zentree Investments Ltd., the top minority shareholder of Energy Resources of Australia Ltd. with a 15.94% stake, did not rule out attempting to block Rio Tinto's attempt to take over the company by participating in its A$476 million renounceable entitlement offer, The Australian Financial Review reported. Zentree is considering whether to participate fully or partially in the offering.

* A feasibility study on Boss Resources Ltd.'s Honeymoon uranium project in South Australia defined a posttax net present value of A$166 million at an 8% discount rate, with a 33.29% internal rate of return and a 4.5-year payback period, assuming a U3O8 price of US$50 per pound.

* Gladiator Resources Ltd. entered into a binding share sale agreement with Vecco Group Pty. Ltd. to acquire the Highgate vanadium project, located in the Mt. Isa minerals province in Queensland, Australia, for staged payments of A$1.2 million in shares and A$100,000 in cash.

* Leading Edge Materials Corp. recognized a C$8.8 million impairment in its fiscal 2019 for the carrying value of the Woxna graphite mine and Kringelgruvan mining lease in Sweden.

* Black Rock Mining Ltd. executed a nonbinding cooperation framework agreement with China Railway Group Ltd.'s subsidiary China Railway Seventh Group Co. Ltd. for the latter to act as head engineering, procurement and construction contractor of the module one Mahenge graphite project's process plant and nonprocess infrastructure.

* The Commonwealth Minister for Indigenous Australians issued Eclipse Metals Ltd. consent for the grant of EL 27584, dubbed as the Devil's Elbow gold-palladium prospect, in Australia's Northern Territory.

* A new environmental impact study for Sayona Mining Ltd.'s flagship Authier lithium project was lodged with Québec's Ministry of the Environment and the Fight against Climate Change. The company said that the filing of the study is a further step towards the planned integration of Authier with North American Lithium.


* The mining companies with the 20 largest exploration budgets in 2019 allocated a total of US$2.93 billion for exploration during the year, accounting for 32% of the US$9.29 billion global exploration total. As part of the 30th edition of S&P Global Market Intelligence's "Corporate Exploration Strategies" study, corporate exploration profiles of the top 10 of these larger players are available in the Research Library.

* The U.S. still has a long way to go to minimize dependence on China as it works to diversify its critical minerals supply chain, according to industry observers from the U.S. and Australia.

* Australian mining contractor MACA Ltd. will exit Brazil, effective this month, following the early termination of a contract with an OZ Minerals Ltd. subsidiary for the Antas copper mine. MACA said it will retain ownership of the majority of the plant and equipment at Antas and sell assets not redeployed to other operations.

* Metal-cutting tools and mining gear maker Sandvik AB reported a loss of 149 million Swedish kronor in the fourth quarter of 2019, swinging from a year-ago profit of 2.55 billion kronor. Earnings were impacted by an impairment of 3.9 billion kronor related to the ongoing divestment of its drilling and completion unit. Full-year 2019 profit fell 33% to 8.52 billion kronor from 12.67 billion kronor.

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