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BHP off-loads US onshore assets for US$10.8B

Industry Top Trends 2021: Metals and Mining

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


BHP off-loads US onshore assets for US$10.8B

TOP NEWS

BHP off-loads US onshore assets for US$10.8B

BHP Billiton Group agreed to sell its U.S. oil and gas assets for a total of US$10.8 billion. BP PLC will acquire Petrohawk Energy Corp., a BHP unit that holds the Eagle Ford, Haynesville and Permian assets, for US$10.5 billion. Meanwhile, Merit Energy Co.-owned MMGJ Hugoton III LLC will buy BHP Billiton Petroleum (Arkansas) Inc. and BHP Billiton Petroleum (Fayetteville) LLC, which hold the Fayetteville assets, for US$300 million. The transactions are expected to be completed by the end of October.

Hindalco unit Novelis acquiring aluminum-maker Aleris in US$2.6B deal

Hindalco Industries Ltd. unit Novelis Inc. signed a definitive agreement to buy rolled aluminum products-maker Aleris Corp. for US$2.6 billion, which will include the assumption of debt. The acquisition will give Novelis 13 additional plants in North America, Europe and Asia, with the latter being a market that the company plans to serve "more efficiently," according to the company's news release.

Anglo approves Quellaveco development, H1 earnings down 9% YOY

Anglo American PLC's first-half net profit fell 9% on a yearly basis to US$1.29 billion, while revenue rose to US$13.70 billion from US$12.22 billion a year ago. Meanwhile, the mining major's board approved the development of the Quellaveco copper project in Peru, a joint venture with Mitsubishi Corp. Initial copper output at Quellaveco is due in 2022, ramping up to full capacity the following year.

DIVERSIFIED

* Teck Resources Ltd. reported a rise in second-quarter earnings to C$634 million from C$580 million in the same quarter of 2017 as it enjoyed higher steelmaking coal, copper and zinc prices than the year-ago period. Separately, Teck closed the sale of its two-thirds interest in the Waneta Dam in British Columbia to BC Hydro and Power Authority for C$1.2 billion cash. Teck will record an after-tax gain of around C$820 million as a result of the sale, with no cash tax payable on the proceeds.

* Vale SA CEO Fabio Schvartsman said a scarcity of the company's trademark top quality ore will shield it for the foreseeable future from the impact of a global trade war, which has hurt other minerals, Reuters reported. The company forecast steady prices for iron ore and rising premiums for its ore on the back of strong demand from China.

* Philippines-based Philex Mining Corp.'s first-half net income dropped 23% on a yearly basis to 552 million Philippine pesos. Revenue declined 2% year over year to 4.65 billion pesos as an increase in revenue from copper sales was offset by a decline in gold and silver sales. The company also reported lower production volumes due to weaker grades and recoveries.

* Bankers Cobalt Corp. entered into an option with a private Namibian partner to acquire a 70% interest in the Kamanjab license in Namibia, which is prospective for base metals, precious metals and industrial metals.

BASE METALS

* MMG Ltd. said that a community on whose land the company is operating the Las Bambas copper-molybdenum mine in Peru is pursuing a US$450 million claim against the Peruvian subsidiary that owns the mine.

* Lundin Mining Corp. formally started the offer to acquire Nevsun Resources Ltd. for C$4.75 per share.

* KAZ Minerals PLC's second-quarter group copper output rose to 72,300 tonnes, from 65,900 tonnes a year earlier, due to increased output from the Aktogay mine in Kazakhstan. Zinc concentrate output, meanwhile, slumped to 10,700 tonnes from 16,800 tonnes.

* Nevsun Resources Ltd. produced 8.6 million pounds of copper in concentrate, up from 5.7 million pounds from a year earlier. Production of payable zinc in concentrate was also higher at 53.8 million pounds from 34.3 million pounds last year.

* Vedanta Resources PLC's Zambian unit said that work at its Konkola copper mine's underground shaft 4 was suspended after a miner was killed in an accident, Reuters reported. The company will conduct an investigation into the incident.

PRECIOUS METALS

* Yamana Gold Inc. booked attributable net income of US$18 million in the second quarter, a swing from a year-ago net loss of US$39.9 million. Revenue climbed to US$431.5 million from US$428.1 million.

* Newmont Mining Corp.'s second-quarter net income attributable to shareholders surged year over year to US$292 million from US$175 million. Additionally, Newmont agreed to acquire a 50% interest in the Galore Creek Partnership in British Columbia from Novagold Resources Inc. in a US$275 million deal. The transaction is expected to close July 27.

* Eldorado Gold Corp. lifted its full-year gold production forecast to between 330,000 and 340,000 ounces from 290,000 to 330,000 ounces previously, mainly due to the improved production forecast for its Kisladag mine in Turkey. The company's gold production in the period surged 56% year over year to 99,105 ounces.

* OceanaGold Corp.'s net profit in the second quarter surged to US$44.6 million, or 7 U.S. cents per share, compared to US$25.4 million, or 4 cents per share, booked a year ago. Revenue in the quarter jumped to US$205.7 million, from US$171.7 million in the second quarter of 2017.

* Polymetal International PLC's gold equivalent output in the second quarter increased nearly 17% year over year to 324,000 ounces.

* Newcrest Mining Ltd. produced 2.35 million ounces of gold in full fiscal 2018, hitting the upper end of its revised full-year guidance of between 2.25 Moz and 2.35 Moz, but down from 2.38 Moz it produced the previous year.

* Highland Gold Mining Ltd.'s second-quarter production at its Mnogovershinnoye, Novoshirokinskoye and Belaya Gora mines increased 4.6% yearly to 69,610 ounces.

* JPMorgan and Citi are seeking buyers for a A$257 million parcel of Evolution Mining Ltd. shares, The Australian Financial Review's Street Talk wrote. The brokers are selling the shares on behalf of Evolution shareholder La Mancha, priced at A$2.79 apiece.

* Rescuers brought to surface 644 miners who were underground when a fire broke out at Gold One International Ltd.'s Modder East gold mine in South Africa, Mining Weekly reported.

* As part of a strategy to decentralize operations, Barrick Gold Corp. cut jobs and closed offices in the second quarter, Bloomberg News reported. "We completed an extensive review of all positions sitting above operations, reallocating roles where appropriate, eliminating those no longer required and closing a number of smaller offices," it said. The move will result in about US$30 million of severance expenses.

* Harmony Gold Mining Co. Ltd.'s Hidden Valley mine in Papua New Guinea reached commercial production levels during June, and it is confident the operation will produce more than 180,000 ounces of gold in 2019.

* Gran Colombia Gold Corp. closed its acquisition of a 14.78% interest in Sandspring Resources Ltd.

* Jaxon Mining Inc.'s share price jumped over 31% on July 26 after the company announced the discovery of five major copper-gold mineralized trends within the Red Spring project area, part of the Hazelton silver-gold-copper project in British Columbia.

BULK COMMODITIES

* Evraz PLC reported a 3.9% rise in crude steel production in the second quarter to 3.5 million tonnes compared to the first quarter, mainly as a result of higher pig iron production.

* Russian coal group PJSC Raspadskaya's reported 2.43 million tonnes of raw coal production for the second quarter, down 19% compared to the first quarter and 21% year over year. The company the reduction is in line with the mining plan at Raspadskaya, which included a transition to two longwalls from three.

* Reliance Steel & Aluminum Co.'s second-quarter net income surged 124.1% year over year to US$230.8 million, and it hiked its quarterly cash dividend to 50 U.S. cents per share, from 45 cents apiece a year ago.

* TimkenSteel Corp. booked net income of US$8.4 million in the second quarter, up from US$1.3 million reported a year earlier. The company's net sales reached US$413.5 million against US$339.3 million last year.

* Fortescue Metals Group Ltd. could make a decision on whether to go ahead with its more than US$1.5 billion Iron Bridge magnetite project in Western Australia this calendar year, The Australian reported. The company jointly owns the project with China's Baoshan Iron & Steel Co. Ltd. and Taiwan's Formosa Plastics Corp.

* New Hope Group Co. Ltd. is exploring options to extend existing activities at its New Acland coal mine in Queensland, Australia, to save several hundred jobs at the site, The Australian reported. "We continue to investigate options to prolong stage-two mining operations in an attempt to prevent any gap in production between stage two and stage three, thus safeguarding the existing workforce of 288 full-time employees (at the mine) and around 500 contractors," a company spokesperson said.

* U.S. Treasury Secretary Steven Mnuchin said Washington was in productive talks with Russia's United Co. Rusal PLC for the company's removal from the U.S. sanctions list, Reuters reported.

* Brazilian authorities are studying the possibility of signing a social and environmental deal with Norsk Hydro ASA, Reuters reported. Prosecutors for the country's Para state said a deal being considered would include social and environmental obligations from them and from the company. The statement clarified that any such deal would not include a resumption of Alunorte's halted production, where the company was ordered to slash output after environmental violation allegations.

* MC Mining Ltd. said it is looking to take control of its Uitkomst Colliery in South Africa and purchase the contractor's assets, saying the contractor continued to experience equipment availability challenges in the quarter. "The in-sourcing of mining operations is expected to enhance asset management resulting in improved availability, leading to higher ROM production," the company wrote. Completion is expected in the first quarter of 2019.

* South Africa's Transnet Freight Rail (Pty) Ltd. will spend about 90 million South African rand on its yearly, large-scale maintenance shutdown on the manganese rail line between Aug. 2 and 8, Mining Weekly reported.

* China intends to phase out another 30 million tonnes of steelmaking capacity within this year, in order to achieve is target of eliminating 150 million tonnes of steel capacity during the 13th five-year period, sina.com reported, citing the Ministry of Industry and Information Technology, sina.com reported. Meanwhile, North China's Hebei province will cap its steel capacity at below 200 million tonnes by 2020.

* China's Jiangxi province intends to shut down 50 coal mines and eliminate 2.57 million tonnes of coal capacity this year, cfi.net reported, citing a document issued by the provincial government.

SPECIALTY

* Cameco Corp. widened its net loss attributable to shareholders to C$76 million in the second quarter from C$2 million a year earlier, while consolidated revenue fell 29% to C$333 million. The company said the results reflect the impact of a weak uranium market. As Cameco is not seeing an improvement in the market, it is extending the suspension of the McArthur River and Key Lake mines in Saskatchewan, which will lead to 550 permanent layoffs, including the temporary layoffs in effect since January. A care and maintenance crew of 200 will remain at the sites. Cameco is also cutting 150 staff and vacancies at its corporate office.

* Clean Commodities Corp. plans to conduct a strategic review to explore options that will maximize value for its shareholders, including a potential sale of the company. The company will also study the possible sale of assets, changing its traded exchange and implementing a share repurchase program.

* Anglo unit De Beers SA expects to close its acquisition of Peregrine Diamonds Ltd. in a month to six weeks' time, Reuters reported. Peregrine owns the Chidliak diamond project in Nunavut, Canada.

* Mineral Resources Ltd. denied disclosing market-sensitive information to institutional investors after the ASX's compliance team sent a letter to the company asking if a private briefing included information that was not previously available to the market, The Australian Financial Review reported. The company's share price climbed 7.6% during the time of the July 19 video conference, but Mineral Resources said it could not explain the price jump.

* Myanmar authorities recovered eight bodies from the 27 small-scale miners who were buried in a landslide at a defunct jade mining site, Reuters reported.

INDUSTRY NEWS

* Rio Tinto launched a partnership with the Regional Chambers of Commerce & Industry Western Australia, aimed at supporting and enhancing the capabilities of local businesses in the Karratha and the Pilbara inland regions.

* Tanzania plans to launch a minerals exchange by the end of the year as it looks to reap the benefits from its resources, Bloomberg News reported, citing Minerals Minister Angellah Kairuki. "We will take into consideration the laws to ensure that this plan is successful," Kairuki said.

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