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Wesfarmers lobs A$1.5B bid for Lynas; MMG's Las Bambas copper mine issues worsen


Essential IR Insights Newsletter - April 2023


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According to Market Intelligence, April 2023


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Wesfarmers lobs A$1.5B bid for Lynas; MMG's Las Bambas copper mine issues worsen


Wesfarmers makes A$1.5B bid for Lynas

Rare earths producer Lynas Corp. Ltd.'s ASX shares were up more than 31% during morning Asia trading hours on West Australian diversified major Wesfarmers Ltd.'s A$1.5 billion cash bid for it. Wesfarmers announced its nonbinding indicative proposal to acquire Lynas for A$2.25 per share, a 44.7% premium to the target's last closing price of A$1.55. Lynas has thus far only said the bid was unsolicited and "highly conditional," and its shareholders need not take any action yet.

MMG to declare force majeure on copper shipments from Las Bambas mine

MMG Ltd. will declare force majeure under sales contracts for copper produced at the Las Bambas mine in Peru as protests by the local Fuerabamba community are expected to "progressively impact" production. Protests near the mine's entrance are now disrupting the transport of personnel and the operation's inbound and outbound logistics. The Fuerabamba community vowed not to participate in negotiations aimed at ending the road blockade after its president and lawyers wer arrested on allegations of extortion, Reuters reported.

Newmont's US$470M special dividend wins over Goldcorp deal skeptics

In the wake of growing shareholder pushback against a planned merger with Goldcorp Inc., Newmont Mining Corp. said it would offer a special dividend of 88 U.S. cents per share, worth about US$470 million, to premerger shareholders. Newmont investor Van Eck Associates Corp. had said the deal gave away too much to incoming Goldcorp shareholders but changed its stance on the tie-up after the dividend announcement. Paulson & Co. Inc. also said it will no longer oppose the deal. Shareholder advisory firm Institutional Shareholder Services Inc. encouraged investors in both companies to back the deal, according to Bloomberg News.


* Earth AI Pty. Ltd., a company harnessing artificial intelligence and big data to search for mineral resources in Australia, will apply for gold and base metals permits in New South Wales and Western Australia in September after inaugurating its own automated rig in April targeting copper, zinc and vanadium in the Northern Territory.


* Construction of Minsur SA's Mina Justa copper-gold mine in Peru is on schedule and is 20% complete to date. The company expects to end work in mid-2020 and start operations by the end of that year, daily Gestión reported, citing CEO Juan Luis Kruger.

* Pancontinental Resources Corp. secured an option to acquire the 4,170-hectare St Laurent project in Ontario as part of its battery and energy metals exploration plan. The project contains an advanced exploration target hosting a 600-meter-long anomaly with associated nickel-copper-cobalt-gold-platinum-palladium mineralization.

* Codelco dismissed Canadian engineering company SNC-Lavalin Group Inc. after the latter allegedly failed to meet its obligations under a US$260 million contract that included building sulfuric acid plants at the Chuquicamata copper mine in Chile, Reuters wrote.

* An updated pre-feasibility study for Pacifico Minerals Ltd.'s Sorby Hills lead-silver-zinc project in Western Australia outlined a pretax net present value, at an 8% discount, of A$243 million, with a 62% internal rate of return and 16-month payback period from commercial production.

* Erris Resources PLC's soil sampling at its Abbeytown zinc project in Ireland identified three new targets up to 1.25 kilometers southwest of the mine.

* CanAlaska Uranium Ltd. agreed to buy the past-producing Manibridge nickel mine in Manitoba from Pure Nickel Inc.


* The Minerals Council of South Africa expects over 90,000 job losses in the gold and platinum mining sector over the next three years due to state-owned utility Eskom's plans to increase power tariffs at above inflation rates, Reuters wrote.

* SolGold PLC flagged a delay in its preliminary economic assessment for the Alpala copper-gold project in Ecuador as initial mine plan assessments and metallurgical data have been more complex than the company expected.

* Zijin Mining Group Co. Ltd.'s net profit attributable to shareholders for 2018 rose 16.7% to 4.09 billion Chinese yuan thanks to increased production. President and Vice Chairman Lan Fusheng said March 25 that the company is seeking M&A opportunities, and it will use 5 billion yuan of its capital expenditure this year on M&A.

* Independence Group NL has received offers for its 30% interest in the Tropicana gold mine in Western Australia but said it wants to understand the mine's true value before making any decision, The Australian reported. Managing Director Peter Bradford also confirmed that the company started a sale process for its shuttered Long nickel mine in Western Australia.

* Eric Sprott will retire as the chairman and board member of Kirkland Lake Gold Ltd. after the company's May 7 annual general meeting of shareholders. Jeff Parr will assume the role of interim chairman.

* Lonmin PLC Chairman Brian Beamish conceded that the company, being acquired by Sibanye Gold Ltd. in a £285 million all-share deal, does not have enough funds to make new investments needed to avoid layoffs.

* Galantas Gold Corp. plans to increase gold processing at its Omagh gold processing plant in Northern Ireland. The company plans to achieve production of 2,000 to 2,500 troy ounces of gold in concentrate per month in 2020/2021.

* Caledonia Mining Corp. PLC is looking to make further investments in Zimbabwe amid a currency crisis, Reuters reported, citing CFO Mark Learmonth, who said the company is considering acquiring brownfield projects using some of the surplus cash generated from its Blanket gold mine.

* Westgold Resources Ltd. agreed to sell its Higginsville gold operations to RNC Minerals for A$25 million in cash and A$25 million in shares.


* Despite efforts to cut down fossil fuel consumption in the country, China increased its coal mining capacity by 194 million tonnes to a total of 3.53 billion tonnes by the end of 2018, Reuters reported, citing data from the National Energy Administration. Since the start of this year, the regulator has approved seven more coal mining projects with an aggregate capacity of 22.5 million tonnes, the newswire added.

* An initial independent assessment of the existing Camrail rail network adjacent to Canyon Resources Ltd.'s Minim Martap bauxite project in Cameroon concluded that it has the capacity to transport commercial tonnages of bauxite.

* Fitch Ratings assigned a BB- long-term issuer default rating to United Co. Rusal PLC, with a stable outlook, after the U.S. Office of Foreign Assets Control removed the company from its list of specially designated nationals and blocked persons.

* A Brazilian court required Vale SA to suspend 13 dams, a decision that delayed the restart of its Brucutu iron ore mine, the company's biggest mine in the state of Minas Gerais. The Court of Santa Bárbara's March 22 decision covers the Sul dam, which receives discharge from the concentration plant at Brucutu. The company did not provide a timeline for the mine's restart.

* Rio Tinto, BHP and Fortescue Metals Group Ltd. reported that their Australian operations felt some impact from cyclones Trevor and Veronica, which battered the country over the weekend, Reuters wrote. Fortescue expects iron ore shipments of between 1.5 million and 2 million tonnes to be delayed due to Veronica. Meanwhile, Rio Tinto and BHP have started resuming operations at some of their facilities that had been suspended, the newswire wrote separately.

* Kore Potash PLC received an engineering, procurement and construction proposal for its Kola mine, part of the Sintoukola potash project in the Democratic Republic of the Congo, from the French Consortium of Engineering Companies. The company noted that the proposal was delivered after the Feb. 28 due date, but it will consider all development options for Kola.

* An update for Cazaly Resources Ltd.'s definitive feasibility study for its Parker Range iron ore project in Western Australia slashed capital expenditure costs by 23% to A$130 million, from A$169.5 million outlined in a previous study. Operating costs were also reduced 12% to A$48.85 per tonne from A$55.29/t.

* Kalium Lakes Ltd. signed a 10-year off-take deal to supply K+S AG with 90,000 tonnes of sulfate of potash products annually from the Beyondie project in Western Australia.

* Warrior Met Coal Inc. closed a restricted payment offer for up to US$150 million of its 8.00% senior secured notes due 2024 at 103% of the aggregate principal amount and a separate tender offer for US$150 million of the notes at 104.25%.

* Mexico reimposed a 15% steel tariff on countries with which it does not have free trade deals, Reuters reported, citing the government's official gazette.

* European antitrust regulators launched an in-depth probe into Novelis Inc.'s proposed US$2.6 billion acquisition of aluminum products-maker Aleris Corp.

* Norsk Hydro ASA's extruded solutions division is now running at 60% capacity following last week's cyberattack.


* Pilbara Minerals Ltd.'s scoping study for the stage-three expansion at the Pilgangoora lithium-tantalum project in Western Australia estimated a posttax net present value, discounted at 10%, of A$3.73 billion. The stage-three project includes increasing the overall plant throughput to 7.5 million tonnes per annum, compared to 5 mtpa in stage two, at an estimated incremental capital cost of A$225.8 million.

* Separately, Pilbara Minerals reported minimal damage at the Pilgangoora operations from Cyclone Veronica. However, the company flagged minor shipment delays over the coming week as the Pilbara Ports Authority continues to suspend ship-loading activities within Port Hedland. Pilbara Minerals also received A$50 million from Jiangxi Ganfeng Lithium Co. Ltd. for an additional 75,000 tonnes per annum of spodumene concentrate under the previously announced Pilgangoora Stage 2 funding agreement.

* Greenland Minerals Ltd.'s optimization studies at its Kvanefjeld rare earth project in Greenland cut capital costs by 44% to US$175 million, including indirect costs and contingency, compared to a 2016 feasibility study.

* Capital pool company Spirit Banner II Capital Corp. entered into a binding letter to purchase all of Five Star Diamonds Ltd.'s six diamond projects in Brazil. Five Star intends to change its name to Star Royalties Ltd. and continue as a royalty and stream company.

* Starting April 5, Chile will accept bids from companies looking to develop battery materials using discounted lithium produced by Sociedad Quimica y Minera de Chile SA as part of the company's 2018 deal with the authorities, Reuters reported.

* The Australian Manufacturing Workers' Union is threatening Albemarle Corp. with disrupting the start of construction at the Kemerton lithium processing plant, claiming the company has so far declined the union's requests for a meeting to discuss the employment of local workers, The West Australian wrote, citing the union.

* Finnish energy company Fortum Oyj will start recycling lithium-ion batteries while piloting so-called second-life applications where electric vehicle batteries are used for stationary energy storages after they are no longer fit for their original purpose.

* The U.S. Federal Trade Commission withdrew Tronox Ltd.'s proposed takeover of Saudi Arabia-based National Titanium Dioxide Co. Ltd. from adjudication as it considers the company's divestiture plan.

* Relentless Resources Ltd. put its IPO, originally slated for February, on hold while it aims to potentially quadruple the net present value of its heavy mineral sands projects in New South Wales, Australia.


* Australia's miners issued a scathing report suggesting the country's lack of major tax reform in nearly 20 years has seen it fall behind in competitiveness while other competing mining countries have lowered their company tax rates. Western Australia's volume of spodumene concentrate sales in 2018 rose 24% over 2017 to a new record of 2.1 million tonnes. Gold sales volumes increased for the third year in a row to 212 tonnes in 2018, their highest level since 1998.

* The mining industry in Western Australia increased direct employment by 5.8% in 2018 to about 89,800 amid rising gold and lithium production, marking the first positive trend in mining employment in the region in five years, The West Australian reported.

* The EU completed its preparations for a no-deal Brexit as the U.K. seems increasingly likely to leave the bloc without a withdrawal agreement April 12, according to the European Commission.

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