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Thyssenkrupp files suit over veto of Tata Steel JV; Wesfarmers drops Lynas bid

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Insight Weekly: US stock performance; banks' M&A risk; COVID-19 vaccine makers' earnings

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Essential Metals Mining Insights November 2021

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[Infographic]: 2021 World Exploration Trends


Thyssenkrupp files suit over veto of Tata Steel JV; Wesfarmers drops Lynas bid

TOP NEWS

Thyssenkrupp objects to Tata Steel JV rejection; Klöckner talks continue

Thyssenkrupp AG filed a complaint with the General Court of the European Union against the European Commission's decision to block a European flat steel joint venture with Tata Steel Ltd. The German conglomerate said the commitments submitted by the two companies should have been sufficient to alleviate competition concerns. Meanwhile, thyssenkrupp's talks with metals trader Klöckner & Co SE are continuing, but a takeover is not in the works, Reuters reported, citing German newspaper Handelsblatt.

Wesfarmers drops A$1.5B takeover bid for rare earths producer Lynas

Wesfarmers Ltd. no longer intends to pursue a takeover of Lynas Corp. Ltd. In late March, the coal mining-to-retail giant introduced a nonbinding indicative proposal to acquire Lynas for A$1.5 billion in cash.

Whitehaven to raise Narrabri coal mine stake to 77.5%

Whitehaven Coal Ltd. intends to increase its interest in the Narrabri coal mine in New South Wales, Australia, to 77.5% from 70%. The company entered a binding agreement to acquire EDF Trading Australia Pty. Ltd., which owns a 7.5% interest in Narrabri, for US$72 million.

BASE METALS

* Antofagasta PLC is positive that its Twin Metals Minnesota LLC unit will secure permits to develop a US$1 billion underground copper mine near the Boundary Waters Wilderness area in Minnesota, which the U.S. government recently opened to mining, Financial Times wrote, citing CEO Ivan Arriagada.

* The Zambian government is determined to urgently secure an investor for Vedanta Resources Ltd.'s Konkola Copper Mines PLC unit once the court proceedings over its disputed liquidation are concluded, Reuters reported, citing Richard Musukwa, the country's mining minister.

* Chilean environmental regulator SMA slapped a US$1.2 million fine on Teck Resources Ltd.'s Quebrada Blanca copper mine for improper handling of mining waste and internal environmental controls, Reuters reported.

* MMG Ltd. agreed to supply Minmetals North-Europe AB with about 10,000 dry tonnes of zinc concentrate from the Dugald River mine in Queensland, Australia.

PRECIOUS METALS

* Platinum group metals producer Northam Platinum Ltd. swung to a net profit of 60.1 million South African rand in fiscal 2019, from a year-ago loss of 705 million rand. Sales revenue in the year surged 41.0% to 10.65 billion rand as 4E sales climbed 20.7% to 570,933 ounces and 6E sales increased 19.6% to 657,362 ounces. Operating profit swelled 192.7% to a record 2.41 billion rand.

* Chinese gold producer Hunan Gold Corp. Ltd.'s net profit attributable to shareholders in the first six months dropped 39.2% year over year to 84.0 million Chinese yuan. Operating revenue rose 27.6% year over year to 8.37 billion yuan.

* Gold Fields Ltd. unit Gruyere Holdings Pty Ltd. sold a 9.9% stake, or 87,117,909 shares, in Gold Road Resources Ltd. at A$1.45 per share for total gross proceeds of A$126.3 million, sending Gold Road's shares down over 17% on the ASX. Gold Fields said it has no intention of exiting its 50% interest in the Gruyere joint venture.

* China relaxed restrictions on gold imports, with the central bank now issuing lower quotas for the precious metal after not granting them for several months, Reuters reported, citing bullion industry sources. The sources cited did not specify the exact amount of gold allowed for import by the central bank.

* Fraser Range Metals Group Ltd. inked a conditional agreement to acquire Wildcat Resources Ltd., which holds the 200-square-kilometer Mount Adrah gold project in south-central New South Wales, Australia.

* While the recent rise in the price of gold has fired up the share prices of industry miners, many earlier-stage Canadian explorers have failed to benefit from the market surge, experts said, noting that they face broader investor disinterest for higher-risk equities, according to an exclusive S&P Global Market Intelligence report.

* Lydian International Ltd. is disappointed after Armenian Prime Minister Nikol Pashinyan asked the country's environmental ministry to evaluate whether it still needs another environmental impact assessment for the Amulsar gold project despite a recent audit that cleared the company of any wrongdoing.

* Torex Gold Resources Inc. hedged 96,000 ounces of gold sales evenly over the next 12 months with a floor price of US$1,400 per ounce and a ceiling price ranging from US$1,666/oz in September to US$1,768/oz in August 2020.

* Kirkland Lake Gold Ltd. increased its stake in Bonterra Resources Inc. to 11.32% from 10.17% on a nondiluted basis through a C$5 million private placement.

* De Grey Mining Ltd. completed its A$15 million acquisition of Indee Gold Pty Ltd.

* Explor Resources Inc. agreed to merge with Pure Nickel Inc. to jointly advance the Timmins Porcupine and Neal gold projects.

* Zimbabwean crocodile and alligator skin exporter, Padenga Holdings Ltd., acquired a 50.1% stake in Dallaglio Investments, which has interests in Vast Resources PLC's Pickstone Peerless and Eureka gold mines, Independent Media reported.

BULK COMMODITIES

* Alumina Ltd.'s first-half attributable net profit sank 26% to US$210.9 million, or 7.3 cents per share, hurt by lower realized alumina prices related to its Alcoa World Alumina and Chemicals, or AWAC, joint venture. The company's 40% share of net profit in the AWAC joint venture declined to US$219.0 million, from US$295.1 million in the year-ago period.

* Coal demand from China is expected to peak in 2025 on the back of demand from its utilities and other industrial sectors, Reuters reported, citing a state-owned think tank CNPC Economics and Technology Research Institute. Compared to 2018, coal consumption in China is expected to drop 18% by 2035, and 39% by 2050.

* China's state-backed aluminum producer Qinghai Provincial Investment Group Co. missed a coupon payment on a US$300 million 2020 note, Bloomberg News reported, citing a person familiar to the matter. The company missed a payment on the same bond in February, but paid a few days later.

* Fortescue Metals Group Ltd. and Woodside Petroleum Ltd. warned that those promoting anti-China sentiment may cost Australia more than A$200 billion in investment and jobs, The West Australian reported.

* Luxembourg-based steel pipes manufacturer Tenaris SA was granted a US$1.9 billion contract by state-owned Abu Dhabi National Oil Co. to supply tubulars and Rig Direct services over the next five years with the possibility of a two-year extension.

* A court in Rio de Janeiro formally declared mining holding company MMX Mineração e Metálicos SA bankrupt. The ruling comes three years after the company filed for bankruptcy protection against creditors, news agency Agencia Brasil reported.

* Kommersant reported that according to estimates by the Ministry of Energy, the Russian Federation will produce 550 million tonnes to 670 Mt of coal by 2035, a 25% to 52% increase over the record level of production in 2018. Most of the production is planned to be exported by rail to Asia-Pacific countries.

* Baoshan Iron & Steel Co. Ltd.'s first-half net profit dropped 38.2% year over year to 6.19 billion Chinese yuan because of rising raw material prices and weaker demand from the automobile and construction sectors amid the slowing economy in China and its trade war with the U.S.

* Chinese government inspectors labeled China Minmetals Corp.'s steelmaking unit Minmetals Yingkou Medium Plate Co. Ltd. a "repeat offender" over environmental violations, Reuters reported. This comes shortly after the company suspended production at rare earths unit Ganxian Hongjin Rare Earth Co. Ltd. over environmental breaches.

* BHP Group is avoiding private equity for its planned thermal coal exit due to the issues it had to deal with during 2018's shale divestment, The Australian Financial Review's Street Talk wrote, adding that Macquarie Capital is involved in exploring the company's coal divestment options.

* Exxaro Resources Ltd. reported a 104% year-over-year surge in attributable EPS to 25.89 South African rand for the first half. As a result, the company is paying an interim dividend of 8.64 rand per share, up by 3.34 rand from a year-ago, as well as a special dividend of 8.97 rand per share.

* Usinas Siderúrgicas de Minas Gerais SA is currently operating at only 42% of its flat steel rolling capacity at its Cubatao and Ipatinga facilities due to weak market conditions and global trade protectionism, Fastmarkets MB reported.

* Mechel PAO invested about 400 million Russian rubles in a new longwall at its V.I. Lenina underground coal mine in Russia. The new longwall is estimated to have industrial coking coal reserves of 560,000 tonnes.

* The Qingdao Intermediate People's Court in China is auctioning 87,100 tonnes of aluminum ingots, 63,585 tonnes of alumina and 12,368 tonnes of copper cathodes that were impounded during a government crackdown on the misuse of collateral for financing metals, Fastmarkets MB reported.

SPECIALTY

* Orocobre Ltd. secured a US$180 million debt facility for the second-stage expansion of its majority-owned Olaroz lithium operations in Argentina. The remaining capital required for the expansion will be provided through shareholders loans. The company expects its full year production in fiscal 2020 to be at least 5% higher than fiscal 2019 production of 12,605 tonnes of lithium carbonate.

* Argosy Minerals Ltd. executed a nonbinding heads of agreement with a unit of Mitsubishi Corp. to supply 2,000 tonnes per annum of lithium carbonate product from the Rincon lithium project in Argentina for an initial term of three-years.

* China's Tianqi Lithium Corp. posted a first-half net profit of 193.4 million Chinese yuan, slumping 85.2% from a year ago due to lower lithium prices and higher financial costs, Reuters reported, citing an exchange filing.

* Prospect Resources Ltd. signed a memorandum of understanding for the supply of power to the Arcadia lithium project in Zimbabwe from African Continental Minerals (Private) Ltd.'s Coalbed methane gas to power project.

INDUSTRY NEWS

* UASA, one of South Africa's oldest trade unions and previously known as the United Association of South Africa, has appealed to the country's government for a speedy resolution of the dispute with businesses over the Mining Charter and to streamline the registration process for companies in order to attract investment to the mining sector. UASA Head of Mining Franz Stehring said investors were looking to the government for certainty and ease of doing business, which was essential if mining was going to go from a "sunset to a sunrise industry.

* The Guardian reported that mining and energy companies hired lobbyists to access Australia's Queensland government 214 times between 2013 and 2018, more than any other sector.

* The London Metal Exchange fined ADM Investor Services International Ltd. £210,000 for its inadequate risk management systems, Reuters reported.

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