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US sanctions force RusHydro to rethink Rusal smelter investment

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


US sanctions force RusHydro to rethink Rusal smelter investment

TOP NEWS

US sanctions force RusHydro to rethink Rusal smelter investment

Russian state-owned power company RusHydro is uncertain about its planned investment in United Co. Rusal PLC's proposed Taishet aluminum smelter project in Siberia due to U.S. sanctions on Russian entities and individuals, Reuters reported, citing RusHydro head Nikolai Shulginov. In April, RusHydro's board approved joining the project, but Shulginov said, "Now, taking the sanctions into account, everything has changed. We have to get back, maybe to recalculate our model: what will happen to the aluminum prices, to the electricity prices ... There are lots of 'buts.'" Taishet is designed to produce 428,500 tonnes of aluminum per annum.

Pretium Resources hit with 2 lawsuits over production reporting

Pretium Resources Inc. is facing two separate class-action lawsuits for allegedly making false and misleading statements, particularly about its Brucejack gold mine in British Columbia not being a "high-grade, high-output" mine. These moves follow the release of a 47-page report by Viceroy Research, which claimed that the company's reported grades and reserves are inflated. Pretium President and CEO Joseph Ovsenek told S&P Global Market Intelligence that the company stands by its numbers and rejected Viceroy's core claims.

Ramelius launches all-share takeover offer for Explaurum

Ramelius Resources Ltd. intends to make an off-market takeover bid for Explaurum Ltd. of 1 Ramelius share for every 4 Explaurum shares held, valuing the offer at 12.3 Australian cents per Explaurum share. The offer represents a 66.2% premium to the last closing price of 7.4 cents per Explaurum share Sept. 7 and a 50.0% premium to Explaurum's 30-day volume-weighted average price of 8.2 cents per share. Explaurum advised its shareholders to take no action until it has released its formal recommendations.

DIVERSIFIED

* India's largest nonferrous metals miners, including Hindalco Industries Ltd., Vedanta Ltd., Hindustan Zinc Ltd., Hindustan Copper Ltd. and National Aluminium Co. Ltd., warned against the country's participation in the Regional Comprehensive Economic Partnership trade deal, fearing it would further damage the industry following the India-ASEAN free trade agreement, The Economic Times of India reported.

BASE METALS

* Telson Mining Corp. temporarily suspended operations at its Campo Morado mine in Guerrero, Mexico, after a worker was fatally injured while reparing an underground articulated haulage dump truck.

* BHP Billiton Group awarded a A$190 million contract extension, covering a minimum of 24 months, for underground mining services at the Leinster nickel mine in Western Australia to CIMIC Group Ltd.'s Thiess.

* Mineral Resources Ltd. took a 10.8% stake in Barra Resources Ltd. after investing A$2 million in the Australian cobalt explorer. Proceeds will be used in part to complete the pre-feasibility study on the Mount Thirsty cobalt-nickel project in Western Australia.

PRECIOUS METALS

* Millennium Minerals Ltd. achieved its targeted production rate of 100,000 ounces per annum at its Nullagine gold project in Western Australia's Pilbara region ahead of schedule. The company is on track to achieve its forecast output this year of 20,000 to 22,000 ounces in the September quarter and 25,000 ounces in the December quarter.

* Syndicated Metals Ltd. estimated a maiden JORC-2012-compliant inferred mineral resource of 855,000 tonnes at 1.8 g/t of gold containing 50,000 ounces at the Korong gold deposit, part of its Monument project in Western Australia's Laverton gold district.

* Resource Development Group Ltd. intends to secure a 30% joint venture interest in 36 square kilometers of mining leases owned by unlisted public company Bullseye Mining Ltd. as part of Resource Development's North Laverton gold project

* Newmont Mining Corp. entered into an option to secure up to an 80% interest in the Anza gold project in Colombia from Orosur Mining Inc. The company also purchased a 19.9% stake in Orosur by subscribing for 29,213,186 common shares for US$2 million.

* Northam Platinum Ltd.'s normalized headline earnings grew to 421.5 million South African rand in fiscal 2018 from 398.3 million rand a year earlier, while its headline loss widened to 701.6 million rand from 636.4 million rand, Mining Weekly reported. The company said its growth, diversification and optimization strategy is on track, with development advancing at the Booysendal South and Zondereinde platinum mines in South Africa.

* RNC Minerals is no longer in talks for the potential sale of its Beta Hunt mine in Western Australia after it reported a high-grade gold discovery at the site.

* Chalice Gold Mines Ltd. agreed to acquire the remaining 30% joint venture interest in the Chimo property from Monarques Gold Corp. The property forms a key part of the company's East Cadillac gold project in Quebec.

* Tahoe Resources Inc. restarted mining operations at its La Arena gold mine in Peru following an agreement to end a protest at the site.

* Cradle Arc PLC entered into a joint venture agreement with Indiana Resources Ltd. unit Mukuyu Resources (Mali) Ltd. to explore and develop the Kossanto West gold project in Mali.

* Gold mining in South Africa has claimed 50 lives so far this year, roughly the same as this time in 2017, as the country's miners are facing concerns over mining safety, Bloomberg News reported.

* Kin Mining NL's update of indicated and inferred resource estimate for the Helens deposit, part of the Leonora gold project in Western Australia, resulted in a 92% rise in resource ounces to 70,900 ounces contained in 1.03 million tonnes grading 2.14 g/t gold.

BULK COMMODITIES

* Jastrzebska Spólka Weglowa SA's shares fell over 8% on the Warsaw Stock Exchange after reports emerged that the state-owned coking coal producer's CEO, Daniel Ozon, might be fired by the energy ministry Sept. 13 amid disagreements over strategy, Reuters wrote, citing a company source. Local daily Rzeczpospolita quoted Ozon as saying earlier that he refused to use company money to finance investments that were unrelated to its operations.

* South Korea's six largest steel companies, including Hyundai Steel Co. and Dongkuk Steel Mill Co. Ltd., were fined a total of 119 billion South Korean won over charges of fixing the prices of steel reinforcement bars, The Korea Herald reported, citing the country's Fair Trade Commission.

* Yancoal Australia Ltd. CEO Reinhold Schmidt disputed a Credit Suisse analyst who suggested the premium Asian power utilities paid on low-ash hunter valley coal rose to 70% due to the emergence of dominant players, saying the sector's consolidation was to be blamed, The Australian Financial Review reported.

* Assore Ltd. CEO Charles Walters said the company approved 2.7 billion South African rand in CapEx to modernize and optimize Assmang Pty. Ltd.'s Gloria manganese mine in South Africa, Mining Weekly reported.

* Nucor Corp.'s board approved a US$650 million investment to expand the production capacity at Nucor Steel Gallatin LLC, the company's flat-rolled sheet steel mill in Kentucky. The mill's current capacity of 1.6 million tons per annum will increase to about 3 mtpa.

* Fertilizer producer Danakali Ltd. is looking to raise US$322 million this year to develop its Colluli potash project in Eritrea, Reuters reported, citing industry sources. The amount will be used to allow the project's first phase to start production in 2022 of 470,000 tonnes per year of low-chloride potassium sulfate.

* Indian state-owned National Mineral Development Corp. Ltd. is seeking to secure tungsten exploration licenses in Western Australia, Press Trust of India reported.

* Sirius Minerals PLC CEO Chris Fraser flagged the possibility of bringing in a partner with a larger balance sheet to help the company advance its North Yorkshire polyhalite project in the U.K., which is expected to produce first potash in 2021, The Australian Financial Review reported.

* Iron ore shipments originating from Western Australia's port of Port Hedland to China marked a 10% monthly increase to 35.5 million tonnes in August, Reuters reported, citing the port's data.

* Supply of Chinese aluminum surged through world markets, with shipments from June to August exceeding 1.5 million tonnes as buyers sought supply of the commodity to replace production from United Co. Rusal PLC, which was hit by U.S.-imposed sanction, Bloomberg News reported.

* Russia's Ministry of Industry and Trade plans to prohibit state and municipal institutions from purchasing certain goods containing aluminum from foreign countries.

* S&P Global Ratings withdrew all of its ratings on Englewood, Colo.-based coal producer Westmoreland Coal Co. and its issuing subsidiary Oxford Mining Co. LLC at the issuer's request.

SPECIALTY

* European Lithium Ltd. is considering spinning off an Austrian subsidiary that holds its lithium assets to existing company shareholders and listing the entity at the prime market on the Vienna Stock Exchange.

* Savannah Resources PLC's mineral resource at its Mina do Barroso lithium project in northern Portugal increased by about 44% to 20.1 million tonnes at 1.04% lithium oxide for 209,000 contained tonnes. The JORC-2012-compliant measured, indicated and inferred mineral resource at the Grandao deposit increased about 64% to 16.4 million tonnes at 1.04% lithium oxide for 171,400 contained tonnes.

* Tianqi Lithium Corp. and Chile's national competition authority, FNE, reached an agreement over the Chinese company's acquisition of a 24% stake in Chile's Sociedad Quimica y Minera de Chile SA, Reuters reported. The transaction is expected to close in the fourth quarter. The court is scheduled to hear the details of the settlement Sept. 13 and is slated to make a decision by Oct. 4, the FNE said.

* QEM Ltd. closed its A$5 million raise for a A$20 million IPO due by early October focused on the Julie Creek project in North Queensland located over the Toolebuc Formation, which hosts widespread vanadium mineralization and is also considered an "oil shale," potentially giving the company two revenue streams, S&P Global Market Intelligence reported.

* Peak Resources Ltd. secured the environmental permit for its Teesside rare earth refinery and separation plant in the U.K., which will process ore from the Ngualla rare earths mine in Tanzania.

* Australian Vanadium Ltd. pegged a 49.7-square-kilometer license area prospective for vanadium-gold-copper-uranium mineralization, which expanded its landholding in the Gabanintha project in Western Australia to over 240 square kilometers.

INDUSTRY NEWS

* Ausdrill Ltd. raised about A$77 million from the retail component of its 1-for-2.13 pro rata accelerated nonrenounceable entitlement offer, which will be used to fund its A$271.5 million acquisition of Barminco Holdings Pty. Ltd.

* The market capitalization of the world's 25 largest mining companies at the end of August fell to an aggregate US$710.8 billion, with only five companies posting month-over-month gains. The total was down 8.5% from the end of July.

* Mineral exploration in the Rainy River watershed in Minnesota's Superior National Forest, also known as the Iron Range, will soon be allowed after the U.S. Department of Agriculture canceled a review that would have led to a 20-year ban on mining and prospecting in the area. Antofagasta PLC unit Twin Metals Minnesota LLC is expected to benefit from the latest move as the company recently got the green light to reinstate two expired mineral leases for its Twin Metals copper-nickel project.

* Even before deciding whether to impose steep tariffs on US$200 billion of Chinese imports, President Donald Trump is considering new levies on an additional US$267 billion worth of products from the Asian nation, according to White House pool reports.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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

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