trending Market Intelligence /marketintelligence/en/news-insights/trending/c_qzemv0jzhjwpmdgka5wq2 content esgSubNav
In This List

Debt-free Rio Tinto is within reach as coal divestments beat forecasts


Japan M&A By the Numbers: Q4 2023


Infographic: The Big Picture 2024 – Energy Transition Outlook

Case Study

An Oil and Gas Company's Roadmap for Strategic Insights in a Quickly Evolving Regulatory Landscape


Essential IR Insights Newsletter Fall - 2023

Debt-free Rio Tinto is within reach as coal divestments beat forecasts


Debt-free Rio Tinto within reach as coal divestments beat forecasts

Rio Tinto was able to generate proceeds of more than US$11 billion through asset sales over the past five years, giving the company the option of becoming debt free, The Australian Financial Review wrote. The mining giant's net debt stood at US$3.8 billion as of Dec. 31, 2017. Meanwhile, UBS said the US$2.25 billion sale of Kestrel announced yesterday appeared to have factored in long-term coal prices of US$170/tonne, which analysts called "impressive." The latest deal brings Rio Tinto's proceeds from the recent Queensland, Australia, coal sales to US$4.15 billion, whereas analysts had expected the mining giant to net between US$1.7 billion and US$2.2 billion for the entire business, implying a long-term coking coal price forecast of US$120/tonne.

CSN targeting over US$900M asset sales in 2018

Brazil's Cia. Siderúrgica Nacional is looking to conclude asset sales this year of 2 billion to 3 billion Brazilian reais, or between US$600 million and US$901 million, to slash its debt, Reuters reported, citing CEO Benjamin Steinbruch. The executive did not elaborate on potential assets that could be off-loaded, but sources said the company could sell its interest in rival steelmaker Usinas Siderúrgicas de Minas Gerais SA.

CITIC's FY'17 profit rises to HK$43.90B; dividend up 9%

Citic Ltd.'s total dividend for 2017 increased 9% year over year to 36 Hong Kong cents per share, after a final dividend of 25 cents per share was declared. The company recorded a profit attributable to shareholders of HK$43.90 billion in the year, compared to HK$43.15 billion in 2016. The results were impacted by a noncash impairment charge of HK$7.2 billion on the Sino-Iron project in Western Australia.


* Rio Tinto accepted €431.6 million of notes for repurchase. The tender offer looks to repurchase up to US$850 million of debt and was open to holders of its €750 million 2% notes due May 2020 and €500 million 2.875% notes due December 2024.

* Vale SA may decide on its new dividend policy March 29. Under the new policy, payouts may be tethered to EBITDA, allowing the company to distribute 30% to 50% of the profits, Valor International reported, citing "people close to the talks."


* Codelco's union leader, Raimundo Espinoza, was removed from his post as president of the Chilean Federation of Copper Workers, reportedly due to internal differences and labor conflicts. He will be replaced by Héctor Roco, president of Codelco's Chuquicamata N°1 workers union. Roco will also replace Espinoza as the workers' representative on Codelco's board, daily Pulso reported.

* First Quantum Minerals Ltd.'s 90%-owned Cobre Panama copper project in Panama is expected to start trial production in the second half of 2018, with operations to begin in the second half of 2019, Pulse reported. South Korea's state-owned Korea Resources Corp. owns a 10% stake in the project.

* S&P Global Ratings affirmed Nexa Resources Perú SAA's BB+ corporate credit and issue-level ratings, with a stable outlook, reflecting the expectation that the company's operations will remain resilient over the next 12 months. The rating agency expects higher zinc production in the next 12 months at the Pasco operations to offset the declining output at the Cerro Lindo mine.

* Ardea Resources Ltd.'s pre-feasibility study for the Goongarrie nickel-cobalt project in Western Australia confirmed the economic viability of the open pit operation under two different autoclave throughput scenarios.

* OZ Minerals Ltd. CEO Andrew Cole said no agreement has been reached with Glencore PLC for the sale of its 8.27% interest in Brazil-focused copper-gold miner Avanco Resources Ltd., The Australian Financial Review reported.


* Western Australia's gold sector is bracing for another attempt by the state government to lift the royalty rate in 2019. Such a rise was ruled out for the 2018 budget but the door was left open down the line. Association of Mining and Exploration Cos. CEO Warren Pearce told S&P Global Market Intelligence that the industry hopes the government will not change the current royalty regime.

* Eastern Platinum Ltd. said its tailings facility at the Crocodile River platinum mine in South Africa is expected to generate first revenue in the third quarter, Mining Weekly reported, citing a company statement.

* Petropavlovsk PLC's profit in 2017 jumped to US$41.5 million, from US$31.7 million in 2016, due to an increase in operating profit and a US$34.6 million benefit from capitalized interest, partially offset by a US$29.2 million effect due to deferred taxation. The company's revenue increased 9% year over year to US$587.4 million on higher gold sales volumes and prices.

* Metminco Ltd.'s share price in afternoon trading on the ASX surged 40% after it announced a successful raising of about A$152,640 through the issue of 19,080,045 new ordinary shares. The company plans to use the funds for exploration activities, retiring the Redfield convertible note, paying creditors and for general working capital.

* Pan African Resources PLC's Barberton project is on track to produce about 50,000 ounces of gold in the second half, about a 23% increase from first-half output. Meanwhile, the construction of the Elikhulu tailings retreatment plant is ahead of schedule, and first gold production expected in August.

* Canada-listed Galway Gold Inc. filed an application for arbitration under the Canada-Colombia Free Trade Agreement as part of its efforts to recover losses from the Colombian government with respect to its Reina de Oro gold-copper project in the country.

* Harmony Gold Mining Co. Ltd. said two workers were fatally injured in a seismic-related fall-of-ground incident at the company's Joel gold mine in South Africa. An investigation is underway.


* The government of Queensland, Australia, may lose A$500 million in royalties per year, as Aurizon Holdings Ltd.'s revised maintenance plan is expected to reduce coal exports by A$4 billion, or up to 20 million tonnes per year, Mining Weekly reported. The Queensland Resources Council said that relative to Cyclone Debbie in March 2017, the new maintenance plan would have double the impact on the resources sector in terms of its capacity to export coal and generate royalties.

* China's retaliatory tariffs on U.S. imports could expand to include more iron, steel and aluminum products if trade tensions with the U.S. escalate. In 2017, metals imports from the U.S. to China totaled US$1.72 billion covering 209 groups — including iron and steel, aluminum, and nickel products, according to data from Panjiva Research, a global trade and logistics information data firm owned by S&P Global Inc..

* Separately, China's state-owned Global Times wrote that the East Asian country is ready to release its list of retaliatory tariffs on imports from the U.S. in response to the list of tariffs on Chinese products, which is expected to be released soon. The report noted that the U.S. list will have a strong impact on Washington. "Compared to China's list, the U.S. list hurts itself more than China," the newspaper wrote.

* Noble Group Ltd. said its restructuring plan was accepted by creditors holding 55% of its existing senior claims. The plan needs approval from 75% of the existing senior creditors as well a majority of shareholders.

* Australian Pacific Coal Ltd.'s pre-feasibility study for the Dartbrook coal mine in New South Wales, Australia, outlined the technical and financial capability of the 25-year open cut operation under both owner-operator and contractor cases. Under the owner-operator case, net present value, discounted at 10%, is estimated at A$1.34 billion, with an internal rate of return of 23.2% and a payback period of five years.

* S&P Global Ratings revised the global scale outlooks on Gerdau SA and Gerdau Ameristeel Corp. to stable from negative and affirmed the BBB- corporate credit ratings. The outlook revision is due to the company's efforts to sell noncore assets, which will total 3.1 billion Brazilian reais and be used to pay down debts.

* The Middle East is shaping up as a niche and "badly underserviced" prize for aspiring Australian high-grade iron ore producers amid evolving changes in China's market, but the high CapEx costs of developing such pelletization projects could see the big boys muscle in ahead of them.

* Anglo American PLC secured approval from the Brazilian environmental agency Ibama to restart operations at its Minas Rio iron ore mine in the country, Reuters reported.

* Metro Mining Ltd. delayed the start of mining at its Bauxite Hills project in Queensland, Australia, to the week of April 9 due to tropical cyclone Nora. The company said the delay is not expected to have any impact on the project's full-year production target.

* Potash and magnesium-focused Karnalyte Resources Inc. plans to complete a comprehensive review of its business, operations and strategy concurrently with the release of its first-quarter financial results.

* Vedomosti reported that PJSC Acron and Dorogobuzh, controlled by the former company, filed a lawsuit against PJSC Uralkali on Feb. 1 in the arbitration court of the Perm territory. The companies asked the court to resolve disagreements over a contract for the supply of chlorocallium. The Federal Antimonopoly Service of Russia is involved as a third party. Details of the disagreements were not disclosed.

* Glencore is considering bidding for the Optimum coal operations in South Africa, which the commodities trader sold to a Gupta family-connected company in 2015, Bloomberg News reported, citing sources.

* Norsk Hydro ASA will move to shut down half of its alumina capacity at the Alunorte refinery in the next two weeks to preserve equipment, Reuters reported, citing sources. The plant could completely shutter the lines within about two months.

* K+S AG plans to boost production by 25% at its Frisia Zout vacuum salt plant in the Netherlands to 1.2 million tonnes per year by the end of 2020. The company did not define the expansion cost in a March 27 press release, but a K+S spokesperson told S&P Global Market Intelligence that the investment required would be in the low tens of millions of euros.


* Kommersant reported that Russia's Ministry of Finance plans to privatize the country's largest diamond cutter, Smolensk Kristall, until 2019. For Kristall itself, PJSC Alrosa was the only candidate. Alrosa told Kommersant that the company will analyze the possibility of participating in the privatization.


* Cash balances at the end of the second half of 2017 were up 2.2% overall for 627 mining companies listed on the ASX and the London Stock Exchange. The companies saw cash balances grow from US$49.56 billion at the end of the first half of 2017 to US$50.68 billion at the end of the second half, according to a report by S&P Global Market Intelligence's Metals and Mining Research division.

S&P Global Market Intelligence and S&P Global Ratings are owned by S&P Global Inc.

The Daily Dose is updated as of 7 a.m. ET, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription. S&P Global Market Intelligence provides links to external sites where these offer further, relevant information to our readers. While we ensure that such links are functional at the time of publication, we are not responsible in instances where those links are unavailable later.