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S&P bumps up Anglo American on strong H1 performance

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S&P bumps up Anglo American on strong H1 performance

TOP NEWS

Anglo American sees upgrades from S&P on strong H1 performance

S&P Global Ratings bumped up its long- and short-term corporate credit ratings on Anglo American Plc to BBB-/A-3 from BB+/B with a stable outlook. The upgrade is a result of the company's strong financial performance in the first half of the year, which reflected the rebound in commodity prices, particularly for iron ore and coking coal.

Commonwealth Bank rules out financing Adani's Carmichael coal mine

Commonwealth Bank of Australia confirmed that it will not lend cash to Adani Enterprises Ltd. for its proposed Carmichael coal mine in Queensland, a move that puts pressure on the Australian government to run out loans of its own, The Sydney Morning Herald reported.

Newcrest FY'17 earnings fall 7% YOY to US$308M

Newcrest Mining Ltd.'s attributable earnings in its fiscal 2017 fell 7% year over year to US$308 million. Sales revenue totaled US$3.48 billion, up 6% from US$3.30 billion a year earlier. The company declared a final 70% franked dividend of U.S. 7.5 cents per share, which will be paid in October.

DIVERSIFIED

* Unnamed sources told The Australian that several of BHP Billiton Group's institutional investors in Australia, which reportedly hold up to 40% of the company's Australian shares, are opposed to former Origin Energy Managing Director Grant King's appointment to BHP's board.

* A majority of Vale SA's preferred shareholders agreed to swap their stock into common shares of the company as 1,420,262,529 preferred shares, equivalent to 72.2% of the total preferred shares in circulation, have been tendered as of Aug. 10, exceeding the minimum 54.09% threshold set for voluntary conversion.

BASE METALS

* BHP is studying whether it can use gold as feed for the Kambalda nickel concentrator in Western Australia as keeping the operation running has been quite challenging due to a lack of nickel ore, Nickel West Asset President Eddy Haegel told reporters on the sidelines of Diggers & Dealers Mining Forum in Kalgoorlie, Australia. "At this moment in time, if nothing changes it is likely that we shut the facility," Haegel said.

* Vedanta Resources Plc's Zinc International subsidiary has committed over 80% of the US$400 million CapEx for the first phase of the Gamsberg zinc project in South Africa, Mining Weekly reported. This phase is expected to have a mine life of 13 years and will restore the company's zinc volumes to over 300,000 tonnes per annum.

* IndustriALL Global Union accused Freeport-McMoRan Inc.'s PT Freeport Indonesia and smelter PT Smelting of treating the "fired" workers at Grasberg mine "inhumanely and with contempt" and urged both to reinstate staff and contractors, Reuters wrote.

* Codelco CEO Nelson Pizarro said the Chilean state-owned miner plans to produce sustainable copper cathode in the years to come, Reuters reported. The pilot project is taking place at the company's Gabriela Mistral mine in Chile.

PRECIOUS METALS

* M&A activity among South Africa's gold producers is unlikely to pick up in the coming months, as tighter margins and muted cash flow generation have prompted a change in business strategies, according to a report by RBC Capital Markets.

* The average all-in sustaining costs, or AISC, in 2016 for primary gold mines covered by S&P Global Market Intelligence's Mine Economics data remained relatively flat from 2015, due to a drop in fuel, reagents and corporate overhead costs, partially offset by a fall in by-product credits, increased royalties and a rise in exploration and other costs. AISC for 2017 is expected to remain flat year over year due to strengthening local currencies, escalating diesel prices, offset by increased by-product credits, increased gold production volumes, and by some reductions in CapEx and corporate overhead costs.

* PJSC Polyus' second-quarter gold output increased 7% year over year to 488,000 ounces on the back of higher production at the Olimpiada and Verninskoye projects. CEO Pavel Grachev said Polyus was on track to meet its 2017 production guidance of between 2.075 million ounces and 2.125 million ounces of gold. The Russian gold miner also increased guidance for 2018 and 2019.

* Ghana's gold output is likely to drop by about 50% this year because of a temporary ban on small-scale mining, which boosted output last year to 4.1 million ounces but was causing damage to the environment, Reuters reported, citing Barbara Oteng-Gyasi, deputy minister of land and mines.

* Economic shifts and larger mines have led to lower capital intensities for new primary gold mines in recent years — a trend that is expected to continue through this year and in 2018, based on mines now in development.

* Lingbao Gold Group Co. Ltd. will sell a 60% stake in unit Lingbao Wason, which is engaged in copper foil manufacturing, to Beijing Zhongxin Zehui Investment Co. Ltd. for 637.2 million Chinese yuan.

BULK COMMODITIES

* Responding to a warning by Queensland over possible breaches of dust levels at the company's Moranbah North and Grosvenor mines during the second quarter, Anglo American said it will work with the government to urgently address the issue and to ensure full compliance. Anglo added that it undertook independent monitoring procedures in the said period to ensure that the health and safety of all employees and contractors was not compromised at its sites.

* Tata Steel Ltd. unit Tata Steel UK signed a deal with the trustee of the British Steel Pension Scheme that will allow the scheme to separate from the U.K. unit and certain affiliated companies. Under a Regulated Apportionment Arrangement, Tata will contribute £550 million and a 33% stake in Tata Steel UK to the pension scheme trustee in order to separate from the scheme.

* Steel Authority of India Ltd., or SAIL, posted a net loss of 8.01 billion Indian rupees in the first quarter of fiscal 2018, widening from a net loss of 5.35 billion rupees reported a year ago. Total sales volume stood at 3.0 million tonnes, which represents a 9% increase on a yearly basis, while salable steel output declined to 3.2 million tonnes from 3.4 million tonnes last year.

* Hindalco Industries Ltd. posted an after-tax net profit of 2.90 billion Indian rupees in the first quarter of its fiscal 2018, down from net profit of 2.94 billion rupees booked a year earlier despite higher revenue and production. Revenue in the period rose 28% year over year to 104.07 billion rupees, driven by higher volumes and realization.

* Thailand-based Banpu PCL posted net profit of US$65.9 million in the second quarter, significantly higher from net profit of about US$8.0 million reported a year earlier. Total run-of-mine coal production, however, slipped to about 8.0 million tonnes from 8.8 million tonnes in the prior-year period as heavy rainfall affected the company's Indonesian operations.

* North Asia Resources Holdings Ltd. expects to book an attributable net loss of HK$110 million to HK$130 million in the first half, narrowing from the loss of about HK$245 million booked in the same period last year.

* The La Escondida underground coal mine in Spain was closed due to a lack of clients, Mining.com reported. The closure of the last project of its type located in the Castilla and León region will leave over 70 workers jobless.

* The China Iron and Steel Association warned that steel futures prices were not driven by higher expected demand or supply disruptions but due to misinterpretation of Chinese capacity cuts and the government's crackdown on pollution, The Australian reported. The association also blamed some traders for driving up prices for their own benefit by making exaggerated claims that steel prices will increase in the final six months of 2017.

* Mikhail Prokhorov sold 1,063,511,040 shares of United Co. Rusal Plc, representing approximately 7% of the company.

* Israel Chemicals Ltd. signed contracts to supply 750,000 tonnes of potash, including options, to its Indian customers between August 2017 and July 2018. The US$13-per-tonne sales price is above previous contracts.

* Queensland, Australia's Environment and Heritage Protection Department fined Adani's affiliate Abbot Point Bulk Coal Pty. Ltd. A$12,190 for breaching conditions of a temporary emissions license at its Abbot Point coal terminal during Tropical Cyclone Debbie on March 27.

* China has already achieved half of its target of cutting coal mining capacity by 800 million tonnes per annum by the end of 2020, Reuters reported, citing the National Development and Reform Commission.

* Chinese coal companies with annual revenue of more than 20 million yuan posted a combined profit of 147.48 billion yuan in the first half of this year, reflecting an increase of 140.3 billion yuan over last year, Caixin reported, citing data from National Development and Reform Commission.

SPECIALTY

* Rio Tinto metallurgists and chemical engineers are quietly testing a closely guarded process in a bid to develop a unique Serbian mineral deposit and the miner's first new mining product in decades, The Australian reported. The company is aiming to develop a top-three global lithium mine at the Jadar lithium deposit to cater to the growing demand for batteries as fossil fuels' role as an energy source declines.

* PJSC Alrosa denied accusations that the Mir underground mine, part of the Mirny Division, in the Siberian region of Yakutia, was unsafe, following an Aug. 4 flood that left eight miners missing. Relations of the missing workers spoke to Russian news site Meduza, alleging that Mir was in a "lamentable state" and there had been floods at the mine in the past.

* Hong Kong customs officers seized HK$5.5 million worth of diamonds hidden in the glove compartment of a car bound for Shenzhen, China, in an anti-smuggling operation, the South China Morning Post reported.

INDUSTRY NEWS

* A recently announced increase in mining royalties and the creation of new mining agency in Brazil, combined with clearer and more consistent regulations, is expected to boost the long-term outlook of the country's resources industry, Mining Weekly reported, citing a recent report by BMI Research.

* Between the start of 2016 and the end of July 2017, mining companies reported potential capital spending of almost US$60 billion. However, only US$583 million has been spent so far, with the remainder targeted for future spending.

* The Democratic Republic of the Congo has reinstated a value-added tax on mining company imports, which is expected to affect the operations of miners in the country, Reuters reported, citing the DRC's chamber of mines.

* In a bid to protect wildlife, including endangered species of camels, China has shut down 132 mining projects in two nature reserves in Ruoqiang county, while another 15 will cease to operate after their licenses' expire, China Daily reported.

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. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.