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BHP's fiscal Q2'20 iron ore output up YOY; Mechel drops coal mine buyback option


BHP's fiscal Q2'20 iron ore, copper output rise YOY

BHP Group's iron ore production in the second quarter of its fiscal 2020 totaled 60.40 million tonnes, up 4% from a year ago. The results reflected record production at the Jimblebar mine and the impact of the train derailment in the December 2018 half. Copper production rose 9% from a year ago to 455,000 tonnes, and metallurgical coal output grew 6% year over year to 10.92 Mt.

Mechel abandons option to buy back stake in Russian coal mine

Russian coal and steel producer Mechel PAO did not exercise its right to buy back a 34% stake in the Elga coal mine in Russia, Reuters reported, citing AO Gazprombank, the company's creditor, which has held a 49% interest in the mine since 2016. In September 2019, Mechel reportedly agreed to buy the 34% stake for 30 billion Russian rubles. A Mechel representative told Reuters that the company did not buy back the stake as it received an alternative offer it is studying.

GFG to consolidate aluminum assets into new Paris-based group

U.K. entrepreneur Sanjeev Gupta's GFG Alliance Ltd. continued efforts to consolidate its industrial businesses, forming a new group that will house the company's aluminum assets. Paris-based ALVANCE Aluminium Group will comprise the Dunkerque aluminum smelter in France and the Fort William aluminum smelter in Scotland. The Duffel aluminum rolling facilities in Belgium will also be part of the new entity.


* Western Areas Ltd. reached deals with BHP unit BHP Billiton Nickel West Pty. Ltd. and Jinchuan Co. Ltd. for the off-take of nickel concentrate produced from the Forrestania project in Western Australia. Its agreement with Nickel West is for 10,000 tonnes per annum of nickel in concentrate, capped at 30,000 tonnes. The Jinchuan deal is for 10,000 tonnes per annum for two years.

* The Russian government is considering providing support to PJSC Norilsk Nickel Co. as it plans to implement a major program to modernize facilities and improve the environment in the city of Norilsk, Kommersant reported.


* Canada-headquartered First Majestic Silver Corp. expects to produce 21.5 million ounces to 24 Moz of silver equivalent at cash costs of US$5.76 per ounce to US$6.97/oz and all-in sustaining costs of US$13.37/oz to US$15.46/oz.

* Mexus Gold US and partner Elias Felix decided to seek a joint venture for the Ures project in Mexico. The company said it will retain a royalty under an agreement.

* An updated preliminary economic assessment on AngloGold Ashanti Ltd. and B2Gold Corp.'s Gramalote Ridge deposit, part of the Gramalote gold project in Colombia, generated a posttax net present value, discounted at 5%, of US$671 million, with an 18.1% internal rate of return and a 3.6-year payback period based on a gold price of US$1,350 per ounce.

* Montreal-based Osisko Gold Royalties Ltd. paid C$3 million in cash to increase its net smelter royalty on Osisko Mining Inc.'s Windfall gold project in Quebec. Osisko Gold Royalties increased its effective NSR on the project to between 2% and 3% from between 1% and 1.5% by exercising a right from an August 2015 deal to repurchase six existing royalties.

* Resolute Mining Ltd. is seeking to raise up to A$196 million via an equity raising to repay a US$130 million finance facility from Taurus Funds Management Pt,y Ltd. ahead of the Jan. 31 repayment deadline.

* London-listed Highland Gold Mining Ltd. produced 83,429 ounces of gold and gold equivalent in the fourth quarter of 2019, rising 27% year over year. Full-year 2019 output grew 12% to 300,704 ounces, slightly above the annual guidance range of 290,000 to 300,000 ounces.

* U.K.-based Caledonia Mining Corp. PLC completed the acquisition of an additional 15% stake in the Blanket gold mine in Zimbabwe from Fremiro Investments (Pvt.) Ltd. It now owns a 64% stake in the mine.

* Revelo Resources Corp. agreed in principle to sell 20 generative net smelter royalty interests over exploration properties to EMX Royalty Corp. for US$1.5 million in cash.

* China's 2019 gold consumption dropped 12.9% year over year to 1,002.78 tonnes amid high prices and an economic slowdown that hit the world's largest gold market, Reuters reported, citing a statement from the China Gold Association.


* BHP said its coal mines in New South Wales, Australia, "could be constrained further" in the second half of its fiscal 2020 if air quality at the sites continues to worsen due to bushfires, which impacted production in December 2019. BHP's energy coal production from New South Wales dropped 11% to 7 million tonnes in the second quarter of its fiscal 2020 due to a change in product strategy to focus on higher-quality products.

* PJSC Magnitogorsk Iron & Steel Works' finished steel product sales in the fourth quarter of 2019 slid 4.0% against the prior quarter to 2.78 million tonnes. Pig iron output declined 1.7% to 2.60 Mt, crude steel output slipped 3.9% to 3.07 Mt. Iron ore output rose 5% to 678,000 tonnes, and coal concentrate production grew 14.7% to 721,000 tonnes.

* Russian steelmaker PAO Severstal invested in Dutch robotics company Airborne, which has developed automation technology that would help improve efficiency in producing carbon-fiber composites, which are said to be stronger and significantly lighter than steel. Severstal said the deal could allow it to offer lower prices for composites over the next five to seven years.

* Brazil's Minas Gerais state lost 22.3 billion reais in revenue from the closure of several Vale SA mines in the wake of the fatal Feijao dam breach in January 2019, Bnamericas wrote, citing the Minas Gerais industry federation.

* The Mannheim local court in Germany denied the registration of new shares that were to be issued from Altech Advanced Materials AG's recently completed €2.0 million rights offer. The denial was due to a technical issue.

* Groundbreaking for a US$4 billion integrated steel mill in Misamis Oriental, Philippines, is scheduled for March, Philippine News Agency reported, citing Phividec Industrial Administration CEO Franklin Quijano.


* The top minority shareholder of Energy Resources of Australia Ltd. did not rule out trying to block Rio Tinto's attempt to take over the company by participating in its A$476 million renounceable entitlement offer, The Australian Financial Review reported. Zentree Investments Ltd., a 15.94% shareholder in Energy Resources of Australia, is deciding whether to participate fully or partially in the offering, the report said, citing a statement.

* Anglo American PLC's diamond unit, De Beers SA, said it has seen improvement in the standards of the artisanal and small-scale mining sector through its GemFair initiative, launched in April 2018 in Sierra Leone in an effort to open a new source of ethical diamond supply. Mine sites participating in GemFair have increased to 94 from 16, all of which align with the company's minimum ethical and operating requirements.

* A feasibility study on Boss Resources Ltd.'s Honeymoon uranium project in South Australia defined a posttax net present value of A$166 million at an 8% discount rate, with a 33.29% internal rate of return and a 4.5-year payback period, assuming a U3O8 price of US$50 per pound.

* India's lack of access to lithium is emerging as a stumbling block in the country's target of becoming a global hub for manufacturing electric vehicles, Bloomberg News reported. The South Asian country plans to support the production of batteries for EVs by importing lithium chemicals from China, Manikaran Power Ltd. Director Jasmeet Singh Kalsi said, according to the report. Manikaran signed a memorandum of understanding with Neometals Ltd. in June 2019 to jointly look into developing India's first lithium refinery.

* Deep Yellow Ltd. will move toward completing a pre-feasibility study for the Reptile uranium project in Namibia after a positive scoping study for the Tumas deposit.

* Altura Mining Ltd. achieved a record shipment of 24,500 wet tonnes of lithium concentrate produced from its Pilgangoora mine in Western Australia to Chinese off-take partner Ganfeng Lithium Co. Ltd.


* Global foreign direct investment slightly declined in 2019 as political unrest in Hong Kong and uncertainty surrounding Brexit shooed away investors, but a marginal recovery in 2020 is in the cards, according to a report published by the United Nations Conference on Trade and Development.

* Australian mining contractor MACA Ltd. will exit Brazil, effective this month, following the early termination of a contract with an OZ Minerals Ltd. subsidiary for the Antas copper mine. MACA said it will retain ownership of the majority of the plant and equipment at Antas and will sell assets that are not redeployed to other operations.

* Metal-cutting tools and mining-gear maker Sandvik AB reported a loss of 149 million Swedish kronor in the fourth quarter of 2019, swinging from a year-ago profit of 2.55 billion kronor. Earnings were impacted by an impairment of 3.9 billion kronor related to the ongoing divestment of its drilling and completion unit. Full-year 2019 profit fell 33% to 8.52 billion kronor from 12.67 billion kronor.

* The Mining Commission in Chile's Lower House voted in favor of discussing a bill that would establish a new royalty of 3% for copper and lithium mining, Pulso reported. The proposed legislation will be analyzed and adjusted before being formally presented to the floor for a vote.

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