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DRC's revised mining law to immediately raise costs, royalties for miners

TOP NEWS

DRC's revised mining law to immediately raise costs for miners

Sweeping amendments to the revised mining law passed by the Democratic Republic of the Congo's parliament Jan. 27 will force companies including Glencore Plc, Randgold Resources Ltd. and Ivanhoe Mines Ltd. to comply immediately, resulting in higher costs and royalties for every mining project in the country, Bloomberg News reported. The previous law passed in 2002 exempted license holders from changes to fiscal and custom regimes for 10 years. The revised mining law includes a new 50% tax on income realized when the commodity prices increase 25% from the levels estimated in a project's bankable feasibility study.

Glencore's FY'17 copper production down 8%

Glencore Plc's own-sourced production in 2017 dropped 8% for copper to 1.3 million tonnes, while zinc output was stable year over year at 1.1 million tonnes. Own-sourced nickel production declined 5% to 109,100 tonnes. Coal production decreased 3% to 121 million tonnes in 2017, and attributable ferrochrome production remained in line at 1.5 million tonnes.

US Steel swings to profit in Q4, FY'17

U.S. Steel Corp. swung to a net profit of US$159 million in the fourth quarter of 2017, from a year-ago loss of US$105 million. For full year 2017, the company posted a net profit of US$387 million, swinging from a year-ago net loss of US$440 million. If market conditions remain at their current levels, U.S. Steel expects to book net earnings of US$685 million and EBITDA of approximately US$1.5 billion in 2018.

DIVERSIFIED

* BHP Billiton Group is advancing plans to sell its U.S. shale business by planning to divide them into seven packages, Bloomberg News reported, citing people with knowledge of the plans. The company still favors selling to a single buyer and values them at US$10 billion or more. The mining giant is also considering swapping onshore assets for offshore wells in the Gulf of Mexico, the sources added.

BASE METALS

* Glencore unit Katanga Mining Ltd.'s full-year 2017 mined ore increased to 433,169 tonnes, from 825 tonnes in 2016, and contained copper in mined ore increased to 9,459 tonnes from 22 tonnes as ore mining resumed in the fourth quarter following the commissioning of phase one of the WOL project, part of the Kamoto copper project in the Democratic Republic of the Congo.

* Tongling Nonferrous Metals Group Co. Ltd.'s net profit attributable to shareholders for 2017 is expected to surge between 183% and 222% to between 510 million Chinese yuan and 580 million yuan, compared to a 2016 profit of 180.3 million yuan.

* Nevsun Resources Ltd. cut its dividend and will shift spending to its Timok copper-gold project in Serbia. It is not clear if or when Nevsun intends to reinstate the dividend.

* Rising copper prices and internal union divisions could influence collective agreement negotiations scheduled for BHP Billiton Group's Escondida and Spence copper mines, both of which end this year. Escondida's talks in July are expected to have an impact on negotiations at Spence and on the rest of the sector, daily Pulso reported.

* Alligator Energy Ltd. decided to invest in cobalt-nickel projects and secured an option to earn up to a 70% interest in the Piedmont project in Northern Italy and plans to invest A$200,000 in a company that is acquiring 100% of the Young lateritic cobalt-nickel project in New South Wales, Australia.

* Responding to media speculation, Bluejay Mining plc confirmed it is in the process of concluding a fundraising of £17 million at 22 pence per share.

* A revised mining law passed by the Democratic Republic of the Congo's parliament would see royalties for cobalt increase from 2% to 10% and sets higher tax rates for copper and gold, Financial Times reported.

* Shares in Ivanhoe Mines Ltd. fell 11.3% on the Toronto Stock Exchange on Jan. 31, after DRC lawmakers voted in favor of new mining laws that immediately lifted a provision exempting license holders from compliance with the new code for 10 years, Mining.com reported.

PRECIOUS METALS

* La Mancha Group International is looking to sell 22.1 million shares in Evolution Mining Ltd., offering the stock at between A$2.74 and A$2.81 per share, The Australian Financial Review's Street Talk reported. Following the sale, which could be worth up to A$62.2 million, La Mancha's stake in Evolution will fall to 20%.

* DRDGold Ltd. expects its EPS to range between 14.16 South African cents and 14.64 cents for the six months ended Dec. 31, 2017, compared to 0.6 cent posted a year ago. The miner attributed the expected increase primarily to an 11% increase in gold production despite a 4% decrease in the rand gold price received.

* China Gold International Resources Corp. Ltd. expects to produce 100 million pounds of copper and 48,000 ounces of gold from its Jiama mine in China and 112,000 ounces of gold from the Chang Shan Hao mine this year. Production in 2017 totaled 47,710 ounces of gold and 79 million pounds of copper from the Jiama mine and 186,957 ounces of gold from the Chang Shan Hao mine.

* Vast Resources Plc achieved record output at its Pickstone Peerless mine, producing 6,057 ounces of gold in the fourth quarter of 2017, compared to 4,352 ounces produced a year ago. At the Manaila mine, concentrate production for copper declined to 562 tonnes and to 96 tonnes for zinc, compared to 889 tonnes and 165 tonnes, respectively, in the December quarter of 2016.

* OceanaGold Corp. forecasts reduced full-year group gold production of between 480,000 and 530,000 ounces, at all-in sustaining costs of between US$725/oz and US$775/oz, due to a lower grade expected at the Waihi project in New Zealand.

* Golden Star Resources Ltd. achieved commercial production at its Prestea Underground gold mine in Ghana. The project will continue its ramp-up during 2018. The combined Prestea underground and open pit mines are expected to produce between 93,000 ounces and 113,000 ounces of gold at cash operating costs of US$740/oz to US$880/oz.

* Patagonia Gold Plc completed the acquisition of the Calcatreu gold deposit in Argentina from Pan American Silver Corp.

* Stratex International Plc intends to fast-track exploration at its Dalafin gold project in Senegal and reduce the company's financial exposure via a joint venture with a third party.

* Acacia Mining plc bought additional put options covering 120,000 ounces of gold at a strike price of US$1,320 per ounce for a cost of US$2.0 million. The options will expire in installments of 30,000 ounces per month between March and June.

* BrookMount Explorations Inc. acquired all of the issued and outstanding shares of SL Group Holdings Ltd., securing a 90% interest in a fully operational and producing gold mining business based in Indonesia.

BULK COMMODITIES

* Kobe Steel Ltd. swung to a net profit of ¥55.82 billion for the first nine months of its fiscal 2017, from a loss of ¥36.48 billion a year ago, as sales surged 13.3% to ¥1.379 trillion. For the year ending March 31, 2018, the Japanese steelmaker is forecasting a profit of ¥45 billion and sees sales rising 11.4% year over year to ¥1.89 trillion.

* JFE Holdings Inc. posted a net profit of ¥138.62 billion for the nine months through December 2017, rising by 316.3% year over year. For the year ending March 31, 2018, the Japanese steelmaker expects a net profit of ¥160 billion, up 135.5% on a yearly basis.

* China's Shanxi and Hebei regions set rigid targets to phase out excessive steel capacity. Shanxi intends to eliminate 23 million tonnes of coal capacity and 1.9 million tonnes of steel capacity within the year, slightly above the 2017 goal, Shanghai Securities News reported. Hebei aims to phase out over 10 million tonnes of steel capacity, 10.62 million tonnes of coal capacity and 5 million tonnes of coke capacity.

* The Hebei province government in China disputed media reports that it was considering extending winter steel production cuts that were introduced to curb air pollution, Reuters reported. The provincial government said they would strictly impose only the curbs ordered by the central government.

* Nippon Steel & Sumitomo Metal Corp.'s steelmaking and steel fabrication segment posted an ordinary profit of ¥189.7 billion for the third quarter of fiscal 2017, more than double the ¥81.9 billion ordinary profit posted a year ago, as the segment' net sales jumped to ¥3.699 trillion from ¥2.926 trillion.

* Constellium NV signed a binding agreement to sell the North Building Assets of its Sierre plant in Switzerland to Novelis for €200 million. As part of the agreement, the companies also agreed to enter into long-term production and metal supply agreements.

* Brazil-headquartered steelmaker Gerdau SA agreed to sell assets in Beaumont, Texas, to Optimus Steel LLC for US$92.5 million, subject to price adjustments. The sale includes a mill, which has a melt shop with a 700,000-tonne capacity and can produce wire rod and coiled rebar, as well as downstream locations Beaumont Wire Products and Carrollton Wire Products.

* Tibet Mineral Development Co. Ltd. expected net profit attributable to shareholders to range between 27 million Chinese yuan and 37.5 million yuan in 2017, which represents an increase of between 26.9% and 76.3% from the 21.3 million yuan posted in 2016.

* Handa Copper Corp. agreed to acquire the Mejillones phosphate project in Chile, which covers a contiguous area of about 8,200 hectares comprising 13 exploration and eight exploitation concessions, from Buccaneer Holdings Ltd.

* Metinvest BV's fourth-quarter 2017 crude steel output rose 6% quarter on quarter to 1.91 million tonnes from 1.80 million tonnes, and hot metal output rose 6% to 2.15 million tonnes from 2.02 million tonnes. Meanwhile, coal output in the December quarter inched down 2% on a quarterly basis to 566,000 tonnes, from 577,000 tonnes in the third quarter of 2017.

* Altona Energy Plc is looking for new engineering consultants for its Arckaringa coal project in South Australia, as "a smaller, more cost-effective team, with greater local knowledge of the Arckaringa Basin, will be better suited to a project of the size the company is planning."

* JSW Steel Ltd. posted record net profit of 17.74 billion Indian rupees for its third fiscal quarter, representing a 148% increase on a yearly basis. Revenue from operations rose to 178.61 billion rupees, up 17% year over year.

* Outokumpu Oyj's net income in the fourth quarter of 2017 totaled €128 million, down from €192 million reported in the year-ago period. Adjusted EBITDA totaled €82 million, compared to €98 million a year earlier. By contrast, Outokumpu's full-year net income increased to €392 million, from €144 million in 2016, while adjusted EBITDA more than doubled to €631 million.

* OAO Metalloinvest produced 10.1 million tonnes of iron ore in the fourth quarter of 2017, down about 2% on a yearly basis due to maintenance works. Pellet production rose approximately 3% to 6.5 million tonnes compared to the same period in 2016.

* China's Hebei province suspended its plan to switch millions of households from coal to natural gas heating systems after supply shortages left homes without heat in subzero temperatures, according to a report in Chinese business magazine Caixin.

* Tharisa Plc is planning to build two new plants and upgrade its Genesis facility in a bid to boost its output to 2 million tonnes per year of chrome concentrate by 2020, Metal Bulletin reported.

SPECIALTY

* A preliminary economic assessment for the production of lithium carbonate from Millennial Lithium Corp.'s Pastos Grandes project in Argentina estimated a posttax net present value, discounted at 8%, of US$824 million, an internal rate of return of 23.4% and a 4.5-year payback period.

* Stellar Diamonds Plc expects to receive a takeover offer from Newfield Resources Ltd. of about 0.76 of a Newfield share for each Stellar share held. The potential offer will imply a value of 12.7 pence per Stellar share. Newfield has support from 29.80% of Stellar's shareholders for the offer.

* Sheffield Resources Ltd. signed a fifth binding off-take agreement for premium zircon produced at its Thunderbird mineral sands project in Western Australia, as the company agreed to supply Qingyuan Jinsheng ZR & TI Resources Co. Ltd. with 9,000 tonnes of premium zircon per year for an initial five years.

* Denison Mines Corp.'s resource estimate for its Wheeler River uranium project in Saskatchewan swelled 88% to 132.1 million pounds of uranium in the indicated category. A pre-feasibility study for the project is expected to be completed this year.

* American Pacific Borate & Lithium Ltd. updated the JORC-compliant resource estimate for its Fort Cady borate-lithium project in Southern California by 30% to 120.4 million tonnes at 6.5% boron trioxide and 340 parts per million of lithium.

* Suncor Energy Inc. intends to slash about 400 positions of heavy equipment operators over the next six years, as the company is looking to automate its fleet with the deployment of over 150 driverless trucks at its oil sand mining operations in Canada, Reuters reported.

* W Resources Plc now plans to borrow an increased amount of US$35 million for the development of its La Parrilla tungsten-tin project in Spain, with the first US$13 million expected to be drawn in early February.

INDUSTRY NEWS

* Amid a shortage of financing on the global market for mining projects, the European Bank of Reconstruction and Development is seeing more mining companies in the Eurasia region moving toward nontraditional forms of finance, according to an exclusive S&P Global Market Intelligence report.

* German industrial workers staged the first of a series of planned 24-hour strikes Jan. 31 over a wage dispute with employers, Reuters reported. The IG Metall union called for full-day walkouts through Feb. 2.

* Zambia's Chamber of Mines said a new law requiring miners and bulk cargo firms to transport at least 30% of their freight by rail is "economically inappropriate and unworkable" and should be reviewed, Reuters reported.

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.