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Rio Tinto mulls US$1B investment in Mongolia for Oyu Tolgoi's power plant


Essential IR Insights Newsletter - April 2023


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According to Market Intelligence, April 2023


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Rio Tinto mulls US$1B investment in Mongolia for Oyu Tolgoi's power plant


Rio Tinto mulls US$1B investment in Mongolia for Oyu Tolgoi's power plant

Rio Tinto is mulling a US$1 billion investment in Mongolia to build a 450-MW coal-fired power plant for its Oyu Tolgoi copper-gold mine, The Australian reported. The company will make a construction decision for the coal-fired power plant in 2019, according to Jeff Tygesen, CEO of Turquoise Hill Resources Ltd., which owns 66% of Oyu Tolgoi and in which Rio Tinto owns a 51% stake. Rio Tinto started seeking a new power plan for Oyu Tolgoi after the Mongolian government canceled a power sector cooperation with the mining giant in February.

Metinvest's FY'17 earnings up more than 400% YOY on stronger revenues

Metinvest BV's net profit in 2017 increased by more than five times on a yearly basis to US$617 million, driven primarily by higher revenues and lower impairments. Revenues jumped 44% to US$8.93 billion on the back of higher steel and iron ore selling prices, as well as stronger sales of pig iron, slabs, flat products and coke.

Cleveland-Cliffs' Koolyanobbing iron ore mine closure risks job cuts

Cleveland-Cliffs Inc. plans to shut down its Koolyanobbing iron ore mine in Western Australia by the end of June, The West Australian wrote. Earlier this year, the U.S.-based miner hinted that it would close the operation by the end of 2018 due to profit decline resulting from increasing discounts from Chinese buyers for its lower-grade iron ore. Cleveland-Cliffs informed its port and rail contractors regarding its plan to shut down the mine, a move that could affect hundreds of jobs.


* Switzerland's Swiss Federal Tribunal upheld a decision to seize US$1.9 million in Swiss bank accounts as part of an ongoing corruption probe tied to former Mongolian Finance Minister Bayartsogt Sangajav, Reuters reported. The seized accounts were allegedly used to transfer about US$10 million to the former minister, who was instrumental in clearing the way for Rio Tinto's Oyu Tolgoi copper-gold operation in Mongolia.

* Cobalt 27 Capital Corp. executive chairman Anthony Milewski said that the most pressing issue for electric vehicle manufacturers is securing supplies of battery minerals, including cobalt, Mining Weekly reported.

* Canadian Metals Inc. signed a definitive option agreement to acquire the TV Tower, Mountain Brook and Blackshale SedEx zinc properties in New Brunswick. The properties comprise 355 claim units covering 7,762 hectares.

* Capstone Mining Corp. said an electrical technician at its Cozamin copper mine in Mexico was fatally injured while working on an underground voltage regulator. Operations at the mine resumed after a temporary halt, with the exception of the immediate area of the accident.


* S&P Global Ratings placed its ratings on Hecla Mining Co., including the B corporate credit rating, on CreditWatch with positive implications, following the U.S.-based silver-gold miner's acquisition of Klondex Mines Ltd. for US$462 million.

* Galane Gold Ltd. signed an earn-in agreement that will allow B2Gold Corp. to indirectly acquire up to a 70% stake in a newly incorporated Galane unit that applied for two prospecting licenses covering about 520 square kilometers around the Mupane gold project in Botswana.

* Alio Gold Inc. agreed to acquire Rye Patch Gold Corp. in an all-share deal valuing the latter at about C$128 million. The combined entity will have 165,000 ounces of gold production in 2018.

* Anaconda Mining Inc. announced its intention to make an unsolicited offer to acquire Maritime Resources Corp. Anaconda intends to offer 0.364 of a common share for every Maritime share, implying a value of 14 Canadian cents per share in the takeover target.

* As a proxy war for control of Colorado Resources Ltd. looms, both sides in the battle, which pits an ex-president and CEO against some of his old colleagues, slung allegations of self-interest in managing the company. Among other things, Colorado Resources' existing board alleged that ex-President and CEO Adam Travis worked against the interest of shareholders when he personally consolidated ownership of an exploration property called Gin next to the company's North ROK copper-gold property in British Columbia in 2013.

* Seeking exposure to Canadian markets, Australian-listed Beadell Resources Ltd. signed a definitive agreement to acquire Canadian-listed Golden Harp Resources Inc. Beadell, a junior gold miner, plans to rename the combined company Americano Mining Inc. and said it wants to be listed on both the TSX Venture Exchange and the ASX. If the deal closes, Beadell shareholders will own about 94.5% of the combined company.

* Gold Reserve Inc.'s preliminary economic assessment of its 45%-owned Siembra Minera gold-copper project in Venezuela pegged a posttax net present value, discounted at 10%, of US$3.93 billion, a 31.1% internal rate of return, and a 4.1-year capital payback.

* Classic Minerals Ltd. signed a nonbinding memorandum of understanding with Tianye SXO Gold Mining Pty Ltd. for the treatment of ore extracted from the Forrestania gold project in Western Australia.

* Red 5 Ltd. expects full processing operations at its Darlot gold mine in Western Australia to resume towards the end of the week, following reduced production rates as issues with the first mill of the project were being fixed.

* Katoro Gold PLC suspended feasibility work on the Imweru gold project in Tanzania until it has reached a final decision on the economic viability and further development of the property.


* Shares of National Mineral Development Corp. Ltd. dropped over 6% in India on March 19 after the company decided to skip dividend payments for fiscal 2018. The Indian state-owned iron ore miner declared its first interim dividend of 4.15 Indian rupees per share for fiscal 2017, which ended March 31, 2017.

* China is expected to close more mines as its supply-side reform moves to its next phase and it targets eliminating more zombie firms, Zhu Baoliang, chief economist and director of economic forecasting at China's State Information Center, told delegates at the Credit Suisse Asian Investment Conference in Hong Kong.

* New Hope Corp. Ltd.'s net profit in the first half of fiscal 2018 spiked 111% to a record A$115.6 million, from a net profit before nonregular items of A$54.9 million in the same period in the prior year. Revenue in the six-month period increased 36% to A$509.4 million.

* EU Trade Commissioner Cecilia Malmstrom will make her defense in the U.S. that European producers should be exempted from steel and aluminum tariffs imposed by the administration of President Donald Trump, adding that the EU is willing to cooperate to combat China's steel overproduction, the Financial Times reported.

* IRC Ltd. is expecting to swing to profit for the year ended Dec. 31, 2017, due to a more than fivefold increase in revenue to approximately US$110 million, EBITDA of approximately US$30 million, and an estimated US$130 million partial reversal of impairment losses on its K&S iron ore mine in Russia.

* China's raw coal production edged up 3.3% year over year to 3.52 billion tonnes in 2017 due to increasing demand and high-quality capacity, Xinhua News Agency reported, citing the National Bureau of Statistics. The increase was the first since 2014, after output hit a six-year low in 2016, the report said.

* Jupiter Mines Ltd., looking to return to the ASX, is targeting to raise A$240 million in an IPO, higher than the originally expected amount of between A$150 million and A$200 million. The company, which holds a 49.9% stake in the Tshipi manganese mine in South Africa, lodged a prospectus with the Australian Securities and Investments Commission, offering 600 million shares at 40 Australian cents per share, which upon completion, will result in a free float of about 70% of Jupiter shares on the ASX.

* Verdant Minerals Ltd signed a nonbinding memorandum of understanding with Wilson International Trading Ltd. for the off-take of up to 350,000 tonnes per year of phosphate rock concentrate or other phosphate products from its Ammaroo phosphate project in Australia's Northern Territory.

* South Africa's Moti Group is looking to double its investments in Zimbabwe to US$500 million after President Robert Mugabe was replaced, with the company looking to spend US$250 million over the next four years on interests ranging from chrome ore mining to fertilizer and diamond polishing, Bloomberg News reported. Moti has about US$250 million invested in Zimbabwe, mostly in the mining sector.

* Several trade unions in India's coal mining sector are uniting in opposition to the government's plan to open up coal mining in the country to private miners, though the forms of protest differ, Mining Weekly reported.


* The Australian Tax Office is reviewing the pricing of related party sales to Chengdu Tianqi Industry Group Co. Ltd. and its partner Albemarle Corp. of lithium product from the Greenbushes mine in Western Australia in 2015 and 2016 which could result in them paying more tax for those years. Tianqi Lithium Australia Pty Ltd general manager Phil Thick, meanwhile, said that even a negative outcome from the ATO would not impact his company's construction in Kwinana, south of Perth. "That has no impact on our project at all," Thick told S&P Global Market Intelligence.

* Alabama Graphite Corp. received final approval from the Supreme Court of British Columbia for its acquisition by a Westwater Resources Inc. subsidiary.

* Vimy Resources Ltd. estimated a maiden inferred resource at its Angularli deposit, part of the Alligator River project in Australia's Northern territory, of 25.9 million pounds of U3O8 contained in 910,000 tonnes at 1.3% U3O8, at a 0.15% cut-off grade.


* S&P Global Market Intelligence's Pipeline Activity Index recovered ground for a second consecutive month in February, rising to 96 from 92 as increases in initial resources and significant financings were tempered by a drop in drilling activity and project milestones. By target, the gold PAI was up to 134 from 127, while the base metals PAI rose to 68 from 63. The number of initial resource announcements increased for a second consecutive month in February, to 10 from seven.

* Zimbabwe introduced changes to a law to limit majority ownership by state entities to only diamond and platinum mines, Reuters reported. The law introduced during the rule of former president Robert Mugabe aimed to increase black ownership in the mining sector.

* Junior Australian exploration companies lauded the passage of the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 through the Senate. According to Mining Weekly, included in the bill is a tax credit arrangement that will allow companies with no mining income to renounce and pass future tax deductions to their Australian resident investors.

* According to South Africa's Solidarity trade union, in-principle agreements have been reached about certain changes to the third iteration of the mining charter during discussions between the government and the mining industry over the weekend, Mining Weekly reported.

* Mining firms in the Democratic Republic of the Congo are unlikely to secure substantial concessions in discussions with authorities over changes to the mining code, Bloomberg News reported, citing Albert Yuma, chairman of state-miner Gecamines SA. "There can be no renegotiation on any point once the code has been promulgated," Yuma said.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

The Daily Dose is updated as of 7 a.m. London time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.