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Elliott renews push for BHP overhaul ahead of AGM

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


Elliott renews push for BHP overhaul ahead of AGM

TOP NEWS

Elliott renews push for BHP overhaul ahead of AGM

Activist shareholder Elliott has been holding talks with international shareholders of BHP Billiton Group as it presses ahead with its campaign to force a radical shake-up of the mining heavyweight, Reuters reported, citing sources. Elliott representatives have met with London-, South Africa- and Australia-based investors to lay out the hedge fund's arguments for an overhaul. This comes as the miner prepares to hold its annual general meeting in London on Oct. 19 and in Sydney on Nov. 16.

Indonesian minister pegs Freeport unit value at US$8B

Indonesian Energy and Mineral Resources Minister Ignasius Jonan estimated that PT Freeport Indonesia is worth US$8 billion, amid talks over the divestment of a majority stake in the Freeport-McMoRan Inc. unit, Reuters wrote. Jonan unveiled the estimate during a parliament hearing, basing the valuation on the parent company's market capitalization of US$20.74 billion and that the Indonesian unit contributes up to 40% to Freeport's profits.

K+S targeting to lift EBITDA to €3B in 2030

K+S AG is aiming to lift its EBITDA to €3 billion in 2030, with at least a 15% return on capital employed, as part of its new strategy dubbed Shaping 2030. K+S will achieve about two-thirds of the growth by developing its existing business and through optimizing the organization and its processes. The company will also integrate its potash and magnesium products unit with its salt business as well as expand its specialty business.

DIVERSIFIED

* BHP CEO Andrew Mackenzie is facing uncertainty over his tenure in the group as the company's annual general meeting approaches and as Chairman Ken MacKenzie looks to further shuffle the board, The Daily Telegraph reported.

* Deutsche Bank retained its buy ratings and raised price targets for both BHP Billiton Group and Rio Tinto. BHP's stock was given a target price of A$28.50 per share, while the price target for Rio Tinto was raised to A$77.00 per share, The Motley Fool reported.

* Rio Tinto shares rose to a 44-month high Oct. 9, but a growing number of short-sellers are convinced that the stock is over-valued, The Australian Financial Review wrote. In recent days, short positions in the miner have grown to 9%.

BASE METALS

* BHP Billiton reached an early wage deal with the supervisors' trade union at its Escondida copper-gold mine in Chile, Metal Bulletin reported. The 36-month agreement with the Sindicato No 2 union allows contract talks to resume with the mineworkers' union, Sindicato No 1, according to the report.

* The Democratic Republic of the Congo ordered Sinohydro Corp. and China Railway Construction Corp.'s Sicomines copper joint venture to halt exports of unprocessed copper and cobalt and instead refine all of its metals within the country, Bloomberg News reported.

PRECIOUS METALS

* Sibanye Gold Ltd. and the National Union of Mineworkers will enter into arbitration proceedings Nov. 2 after wage talks at the company's Kroondal platinum operation in South Africa hit a deadlock last week, Miningmx reported. According to the union, the company only offered about a third of the wage hike it wanted for category A employees while there was also a wide difference between the demand and offer for category B employees.

* Centamin Plc achieved record production in the third quarter of 156,533 ounces of gold, a 5% increase year over year, at its Sukari gold mine in Egypt. The company maintained its full-year production guidance of 540,000 ounces.

* Newcrest Mining Ltd. is looking to increase the ratio of its CEO's annual long-term incentive grants to 180% of total fixed remuneration from November 2016, compared to the previous 150%, despite the miner posting a full-year profit of US$394 million, well short of forecasts of US$452 million. According to The Australian, the proposed incentive will require shareholder approval.

* Ramelius Resources Ltd. produced 33,150 ounces of gold from its Western Australia operations in the September quarter, exceeding the guidance range of between 28,000 ounces and 32,000 ounces.

* Caledonia Mining Corp. Plc is planning to expand in Zimbabwe, where production at its flagship Blanket gold mine has reached new highs and the country relies on it and other miners to generate currency, Reuters reported. "We are interested in looking at other assets that are profitable and of good quality," Caledonia Vice President Maurice Mason said.

* Hummingbird Resources Plc's 33.85%-owned Cora Gold Ltd. was admitted to trading on the London Stock Exchange's AIM on Oct. 9 following a successful fundraising of about £3.5 million. At an IPO price of 16.5 British pence per share, Hummingbird's interest in Cora Gold is valued at around US$5 million.

* Oryx Management Ltd. agreed to expand its proposed finance facility for KEFI Minerals Plc's Tulu Kapi gold project in Ethiopia to US$140 million from US$135 million to allow for an increase in ore processing capacity to 1.9 million tonnes per annum to 2.1 mtpa, from 1.5 mtpa to 1.7 mtpa, with the upper and lower limits depending upon the hardness of the ore.

* Kingsgate Consolidated Ltd. unit Akara Resources PCL may be able to restart mining in Thailand as the country's Department of Primary Industries and Mines recently informed the company that a government panel approved a gold mining management plan, Thailand's Prachachat Turakij reported.

* Dacian Gold Ltd. intersected first gold ore during underground mine development at Beresford, part of the company's Mount Morgans project in Western Australia, four weeks ahead of schedule.

* Enterprise Metals Ltd. entered a deal to fully acquire Calypso Minerals Pty. Ltd., which holds seven tenement applications prospective for gold, copper and zinc in Western Australia. The addition of tenements covering 733 square kilometers will expand the company's Murchison project landholding to 820 square kilometers.

BULK COMMODITIES

* Kobe Steel Ltd. said internal checks found that a portion of its aluminum and copper products were falsely labeled to show they met the specifications requested by customers. The incident of "improper conduct" involves about 19,300 tonnes of aluminum products, 19,400 tonnes of aluminum castings and forgings, and 2,200 tonnes of copper products shipped from September 2016 to August 2017.

* Edenville Energy Plc started producing washed coal at its Rukwa project in Tanzania.

* Thailand's Banpu PCL signed a deal to acquire about an 80% stake in 112 wells in the Marcellus shale in northeast Pennsylvania through a deal valued at US$210 million, Reuters reported.

* Unionized workers at Shougang Hierro-Peru SA's iron ore operations started an indefinite strike over wage disagreements, Metal Bulletin reported.

* Chinese coke producer Henan Jinma Energy Co. Ltd. has set the offer price for its Hong Kong IPO at HK$3.0 per share, with net proceeds expected to be HK$352.6 million. The company received applications for a total of 581,961,000 shares in Hong Kong, which represents an oversubscription of 43.64x.

* Steel Authority of India Ltd., or SAIL, signed an agreement with POSCO, which will provide wide-ranging technical services for SAIL's IISCO steel plant in Burnpur, India.

* China Baowu Steel Group Corp. Ltd. acquired a 90% stake in Shanghai Xinhua Iron & Steel Co. for 38.5 million yuan, Beijing News reported.

* Beowulf Mining Plc appointed SRK Consulting (UK) Ltd. to complete a scoping study on its Kallak magnetite iron ore project in Sweden. The study is scheduled to be finished by the end of February 2018.

* Crude steel output from China in the first eight months of the year increased 5.6% year over year to 566.41 million tonnes, while the steel price index reached 112.77 in August, a 37.51 point increase from a year ago, China Daily reported.

* The Queensland Supreme Court ordered Clive Palmer's Mineralogy Pty. Ltd. to pay US$17.6 million to a Singapore-based company for underwater gas survey works, The Australian reported.

* The government of New South Wales will introduce legislation in parliament to allow the Springvale coal mine to remain open, saying it is vital for employment and providing 15% of the Australian state's energy, ABC reported. The mine was facing a potential closure after the Land and Environment Court ruled that planning authorities applied the wrong test when granting its approval.

SPECIALTY

* Petra Diamonds Ltd. warned that it is likely to breach a key condition of its banking agreements related to a core earnings ratio for the year that ended June 30, after suffering a series of operational interruptions in Tanzania and South Africa.

* Following a similar story of lithium and cobalt, vanadium prices have risen almost five-fold since 2016, to US$11.5/lb on Sept. 28 from only US$2.45/lb at the start of last year. The mergers and acquisitions activity surrounding vanadium has also shown significant changes over the past two years. So far in 2017, as of Sept. 28, 11 primary vanadium deals have been announced, which is almost triple the number of deals announced in 2016 and 2015.

* Trans Hex Group Ltd. will lift its interest in West Coast Resources (Pty.) Ltd. to 67.2% by acquiring another 27.2% stake from investment company RAC for 39.1 million South African rand, Mining Weekly reported. The company already holds a 40% interest in West Coast Resources, which will become Trans Hex's subsidiary after the implementation of the deal.

* Lucapa Diamond Co. Ltd. has locked in US$15 million of debt financing to bring the Mothae diamond project in Lesotho into production in 2018.

INDUSTRY NEWS

* S&P Global Market Intelligence data revealed that the tide has turned for the Australian resources industry. So far this year, there have been 20 successful new listings, and there are about 10 more still aiming to list before the end of 2017. By comparison, just 10 companies that undertook IPOs to list on the ASX made the boards in 2016.

* Peru's mining investment rose 3.8% year over year to US$2.83 billion in the first eight months of the year, Andina reported, citing the country's energy and mines ministry.

* The Queensland government and METS Ignited, an industry-led, government-funded group, are launching a joint initiative to bring innovative ideas to the mining sector and create over 3,000 new mining technology jobs over the next decade, Daily Mercury reported.

S&P Global Market Intelligence is 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.