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Alcoa urges striking Australian workers to return as dispute bites into output

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


Alcoa urges striking Australian workers to return as dispute bites into output

TOP NEWS

Alcoa urges striking Australian workers to return as dispute bites into output

Alcoa Corp. urged striking employees at its Western Australian operations to return to work after admitting that the ongoing industrial action is affecting alumina production, The Australian Financial Review reported. The Australian Workers' Union rejected the enterprise bargaining agreement and voted overwhelmingly in favor of continuing the strike, which is entering its fifth week. The company said the labor action has resulted in a 15,000-tonne drop in August output, compared to annual production of about 9 million tonnes.

Pretium Resources hit with 2 lawsuits over production reporting

Pretium Resources Inc. is facing two separate class-action lawsuits for allegedly making false and misleading statements, particularly about its Brucejack gold mine in British Columbia not being a "high-grade, high-output" mine. These moves follow the release of a 47-page report by Viceroy Research, which claimed that the company's reported grades and reserves are inflated. The report added that Pretium moved "undisclosed tonnage" of rock at the mine that, in its view, renders the mine "uneconomic" and Pretium stock "worthless." Pretium President and CEO told S&P Global Market Intelligence that the company stands by its numbers. He rejected the core claims made by Viceroy.

Hyundai Steel, Dongkuk among 6 South Korean steel firms fined over price fixing

South Korea's six largest steel firms, including Hyundai Steel Co. and Dongkuk Steel Mill Co. Ltd., were slapped with a total fine of 119 billion South Korean won over charges of fixing the prices of steel reinforcement bars, The Korea Herald reported, citing the country's Fair Trade Commission.

DIVERSIFIED

* African Rainbow Minerals Ltd.'s attributable profit for the year surged to 4.75 billion South African rand, from 1.43 billion rand a year ago. Revenue climbed to 9.60 billion rand, from 9.02 billion rand in the prior year. The earnings include a net value gain of 977 million rand on the restructuring of the ARM Coal debt in late June. The year-ago results also included attributable impairments of the Nkomati mine and Modikwa mine assets of 711 million rand and 734 million rand after tax and noncontrolling interest, respectively. Patrice Motsepe, the company's executive chairman, said it is looking at some very exciting growth opportunities, Mining Weekly reported.

* Glencore PLC officially dissolved its Rosneft-stake consortium with Qatar Investment Authority after transferring its 14.16% stake in the Russian state-owned company to a wholly owned subsidiary of Qatar Investment, as agreed upon earlier. Glencore and Qatar Investment now hold a direct stake in Rosneft of 0.57% and 18.93%, respectively.

BASE METALS

* The same investors who seeded Argentina-focused lithium player Centaur Resources have backed International Cobalt Resources Ltd., which launched a prospectus ahead of an A$11.2 million IPO on the ASX due Oct. 22 mainly on cobalt with associated gold, copper and nickel across three different provinces and styles of mineralization in Canada. Managing Director Ben Cooper found the assets and has been joined on the board being formed for the IPO by Independent Chairman David Barwick, who has chaired, been managing director or president of over 30 public companies and has brought two mines into production in Canada. Mount Ridley Mines Ltd. Managing Director Ashley Hood is also International Cobalt's nonexecutive director.

* PT Antam (Persero) Tbk. swung to a first-half net profit of 344.45 billion Indonesian rupiah from a year-ago net loss of 496.12 billion rupiah. The results came on the back of higher production and net sales as well as efficiency improvements, which led to stable cash costs. Net sales in the half surged 292% year over year to 11.82 trillion rupiah. Ferronickel sales jumped 90% to 12,579 tons of nickel in ferronickel, and production grew 37% to 12,811 tons of nickel in ferronickel.

* Intrepid Mines Ltd. struck a conditional deal to sell its Intrepid Mines Zambia Ltd. unit to Consolidated Mining and Investments Ltd. unit Vulcan Copper Ltd. for US$5 million.

PRECIOUS METALS

* Northam Platinum Ltd.'s normalized headline earnings grew to 421.5 million South African rand in fiscal 2018 from 398.3 million rand a year earlier, while its headline loss widened to 701.6 million rand from 636.4 million rand, Mining Weekly reported. The company, meanwhile, said its growth, diversification and optimization strategy is on track, with development advancing at the Booysendal South and Zondereinde platinum mines in South Africa.

* Ramelius Resources Ltd. intends to make an off-market takeover bid for Explaurum Ltd., offering 1 Ramelius share for every 4 Explaurum shares held, valuing the offer at 12.3 Australian cents apiece.

* RNC Minerals is no longer in talks for the potential sale of its Beta Hunt mine in Western Australia as it reported a high-grade gold discovery at the site. The discovery includes 95-kilogram specimen stone containing an estimated 2,440 ounces of gold and a 63-kilogram specimen stone containing an estimated 1,620 ounces.

* Tahoe Resources Inc. restarted mining operations at its La Arena gold mine in Peru following an agreement to end a protest at the site. The protesters on Sept. 6 agreed to participate in formal discussions with Tahoe starting Sept. 7. The Ministry of Energy and Mines will host the talks.

* Pan African Resources PLC reached a three-year wage agreement with the National Union of Mineworkers and the United Association of South Africa, which represent the majority of employees at the Barberton gold mine in South Africa. Under the deal, an average annual wage increase over the three years will be 6.5% for National Union of Mineworkers members and 5.5% for United Association of South Africa members.

* Barminco Holdings Pty. Ltd. was awarded a five-year contract extension worth about A$700 million to provide underground mining services at AngloGold Ashanti Ltd.'s Sunrise Dam gold mine in Western Australia.

BULK COMMODITIES

* Assore Ltd. CEO Charles Walters said that 2.7 billion South African rand in CapEx was approved for the modernization and optimization of Assmang Pty. Ltd.'s Gloria manganese mine in South Africa, Mining Weekly reported. Assore owns 50% of Assmang, which it controls jointly with African Rainbow Minerals.

* Swiss steelmaker Schmolz + Bickenbach AG is considering a legal action after it lost a US$420 million, five-year contract to supply the U.S. Air Force with warhead bodies used in bunker-busting bombs, Reuters reported. The company's U.S. unit lost the contract after its foreign ownership drew complaints from rivals.

* Nucor Corp.'s board approved a US$650 million investment to expand the production capacity at Nucor Steel Gallatin LLC, the company's flat-rolled sheet steel mill in Kentucky. With the investment, the mill's current capacity of 1.6 million tons per year will be increased to around 3 million t/y. The project is expected to create 70 full-time jobs.

* Fertilizer producer Danakali Ltd. is looking to raise US$322 million this year to develop its Colluli potash project in Eritrea, Reuters reported, citing industry sources. The amount will be used to allow the project's first phase to start production in 2022 of 470,000 tonnes per year of low-chloride potassium sulfate, which commands a premium to the more common muriate of potash.

* Indian state-owned National Mineral Development Corp. Ltd., or NMDC, is seeking to secure tungsten exploration licenses in Western Australia, Press Trust of India reported. The company made three new exploration tenement applications in the Kimberley region, and all three have some known tungsten occurrences as well as prospective geology to contain other minerals, including copper, zinc, gold and rare earth elements, company sources said.

* India's National Company Law Appellate Tribunal ruled that ArcelorMittal bid for bankrupt Essar Steel India Ltd. is eligible if it clears all outstanding dues of two defaulting companies by Sept. 11 and ruled that Numetal is also eligible to bid. The required dues of Uttam Galva Steels Ltd. and KSS Petron amount to more than 70 billion Indian rupees, while ArcelorMittal previously said it had exited Uttam Galva Steels Ltd. before bidding for Essar Steel.

* Sirius Minerals PLC CEO Chris Fraser flagged the possibility of bringing in a partner with a larger balance sheet to help the company advance its North Yorkshire polyhalite project in the U.K., which is expected to produce first potash in 2021, The Australian Financial Review reported.

* S&P Global Ratings withdrew all of its ratings on Englewood, Colo.-based coal producer Westmoreland Coal Co. and its issuing subsidiary Oxford Mining Co. LLC at the issuer's request.

* Coal India Ltd.-operated mines, with a combined annual capacity of 20 million tonnes, received notices in July and August from the pollution regulator for the central Indian state of Odisha for environmental noncompliance, Reuters reported. The regulator said the problems in one of the mines included an unusable sludge treatment plant as well as a faulty water sprinkling system. The company said it is fixing the issues.

* South32 Ltd. said in a report discussing its climate change strategy that it will develop decarbonization plans in 2019 to support its goal of net zero emissions by 2050. The company will initially focus on its long-life, emissions-intensive operations in Australia, the Worsley alumina and Illawarra metallurgical coal operations, and will consider current and foreseeable advancements in low-carbon technology and alternative energy sources.

SPECIALTY

* Tianqi Lithium Corp. and Chile's national competition authority, FNE, reached an agreement over the Chinese company's acquisition of a 24% stake in Chile's Sociedad Quimica y Minera de Chile SA, or SQM, Reuters reported. The transaction is expected to close in the fourth quarter, as the miner secured necessary approvals from all other anti-trust regulators, including India and China. The court scheduled to hear the details of the settlement on Sept. 13, and is slated to make a decision by Oct. 4, the FNE noted.

* Bushveld Minerals Ltd. reported that an unprotected industrial action at its Vametco vanadium mine in South Africa has temporarily stopped production since the evening of Sept. 5. The company said the industrial action is related to legacy issues and compensation structures prior to Bushveld's acquisition of Vametco.

* Trans Hex Group Ltd. is selling its head office building in Cape Town, for 28.5 million South African rand, with the proceeds to be used to fund its working capital requirements and future operational growth, Mining Weekly reported.

* A scoping study for Thor Mining PLC's Pilot Mountain tungsten project in Nevada outlined a 12-year life for the project's Desert Scheelite deposit. The study generated a net pretax income of US$125 million at the base case, with a payback period of 36 months.

INDUSTRY NEWS

* The market capitalization of the world's 25 largest mining companies at the end of August fell to an aggregate US$710.8 billion, with only five companies posting month-over-month gains. The total was down 8.5% from the aggregate US$776.8 billion capitalization of the top 25 companies at the end of July. As a result, 14 of the largest 25 companies, or 56%, now have a market capitalization lower than a year ago.

* Mineral exploration in the Rainy River watershed in Minnesota's Superior National Forest, also known as the Iron Range, will soon be allowed after the U.S. Department of Agriculture, or USDA, cancelled a review that would have led to a 20-year ban on mining and prospecting in the area. Antofagasta PLC unit Twin Metals Minnesota LLC is expected to benefit from the latest move, as the company recently got the green light for the reinstatement of two expired mineral leases for its Twin Metals copper-nickel project.

* Even before making a decision on whether to impose steep tariffs on US$200 billion of Chinese imports, President Donald Trump is considering new levies on an additional US$267 billion worth of products from the Asian nation, according to White House pool reports. "Now we've added another US$200 billion," Trump told reporters. "And I hate to say that, but behind that, there's another US$267 billion ready to go on short notice if I want. That totally changes the equation."

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.

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