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In This List

BHP to stay in industry associations; Aurubis to sell flat-rolled division

Mining Exploration Insights December

Mining Exploration Insights: Dip in gold drilling weighs on results

Mining Exploration Insights: Is the exploration sector back on recovery?

State of the Market: Mining Q2-2019


BHP to stay in industry associations; Aurubis to sell flat-rolled division

TOP NEWS

BHP Group to retain membership in all industry associations after 2019 review

BHP Group will not quit from any of its industry associations even as it identified "material differences on climate and energy policies" with four associations in its 2019 review. The company determined that it will stay as a member of the US Chamber of Commerce, the Mining Association of Canada, and the American Petroleum Institute. BHP also decided to remain with the NSW Minerals Council, but subject to further review by no later than April 30, 2020, to determine if the council will strictly adhere to its new climate and energy policy that supported the Paris Agreement.

Aurubis in talks to sell flat rolled products division as FY'19 operating earnings drop

Aurubis AG CEO Roland Harings said the company is in advanced talks to offload its flat-rolled products division, with a deal expected in 2020, Reuters reported, as the German copper producer recorded a 42% drop in fiscal 2019 operating earnings before taxes to €192 million driven by one-off impairment losses in the flat-rolled products segment and maintenance shutdowns. The company recommended a dividend of €1.25 per share, down from €1.55 in the previous year. Aurubis is also mulling takeovers in the recycling sector, Harings noted.

Mongolian Parliament approves resolution to improve Oyu Tolgoi deals

The Mongolian Parliament unanimously approved a resolution instructing the government to improve the investment and financing agreements covering Turquoise Hill Resources Ltd.'s 66%-owned Oyu Tolgoi copper-gold mine. The resolution tells the government to improve the implementation of the 2009 investment agreement, the 2011 shareholder agreement, and the 2015 underground mine development and financing plan, which was recently validated by a Mongolian court.

DIVERSIFIED

* Commodities trader Trafigura Group Pte. Ltd.'s metals and minerals segment booked a full-year 2019 gross profit of US$1.30 billion, or 44% of the overall group's record profit of US$2.98 billion. The company said results in 2020 could be better than 2019 as the market environment remains favorable for oil and metals.

BASE METALS

* Copper budgets have increased by US$245.4 million, or 12%, year over year in 2019, driven by optimism for new discoveries in Australia and by increased activity by major companies in Chile and the U.S., according to the Metals and Mining Research team of S&P Global Market Intelligence.

* Jiangxi Copper Co. Ltd. will receive financial support of 1.5 billion Chinese yuan from its controlling shareholder Jiangxi Copper Corp. Ltd., which the company can only use to repay loans or supplement its working capital.

* Dongying Fangyuan Nonferrous Metal Co. Ltd. stopped the syndication of a US$300 million, one-year loan two weeks into its launch to the market, Bloomberg reported, citing unidentified sources knowledgeable of the matter.

PRECIOUS METALS

* Alamos Gold Inc. is on track to reach its full-year 2019 production guidance of 480,000 ounces to 520,000 ounces, and all-in sustaining cost of US$920 per ounce to US$960/oz. The company expects production in 2020 to slip to 425,000 ounces to 465,000 ounces, with higher all-in sustaining cost of US$1,020/oz to US$1,060/oz.

* PNX Metals Ltd. decided to prioritize near-term gold production from its Fountain Head project, part of the Hayes Creek project in Australia's Northern Territory, and has accelerated studies and approvals for development of a gold heap leach operation. Funds will be re-allocated from the broader Hayes Creek definitive feasibility study to accelerate activities at Fountain Head.

* Triple Flag Precious Metals Corp. dropped plans for an IPO in Canada, citing "challenging" year-end market conditions. The company had expected to raise up to C$360 million if the 20 million shares it planned to issue were priced at the top end of the C$15 to C$18 per share range.

* Peninsula Mines Ltd. signed a binding agreement to acquire the Southern Cross gold project in Western Australia, which comprises 20 prospecting licences, one exploration licence and one exploration license application. The transaction is expected to complete mid-January 2020.

* IAMGOLD Corp. increased its stake in the Nelligan gold project in Quebec to 75% from 51% by paying Vanstar Mining Resources Inc. in advance an amount of C$2.4 million.

* Turkey is set to loosen rules for gold imports and is working with its local bourse Borsa Istanbul to also include the registration of gold brought without certification from the London Bullion Market Association, Bloomberg reported, citing unidentified sources privy to the matter.

* Emgold Mining Corp. secured an option to acquire a stake of up to 55% in the East-West gold project in Quebec from an unnamed private individual.

BULK COMMODITIES

* After Chinese steelmakers broadly saw their earnings plunge in the third quarter, analysts noted some recent changes in the demand picture, expecting a recovery in companies' earnings for the last quarter amid improving steel margins. Steel producers recently saw their margins improve with domestic prices for steel, especially construction steel rebar, rallying in November, according to Xu Ruoxu, a Shanghai-based nonferrous metals analyst with brokerage firm Shenwan Hongyuan Securities.

* A self-proclaimed nonpartisan budget watchdog suggested that the Black Lung Disability Trust Fund's outstanding debt to the U.S. Treasury could reach US$15.4 billion by 2050 due to the reduced coal excise tax rate on coal producers.

* Steel market participants anticipate a strong year for iron ore demand and prices in 2020 on the back of improving steel margins and government stimulus, according to an Iron Ore & Steel Outlook Survey by S&P Global Platts.

* S&P Global Ratings upgraded its outlook on Russian steelmakers PJSC Magnitogorsk Iron & Steel Works, or MMK, and PJSC Novolipetsk Steel, or NLMK, to positive from stable thanks to their low-cost operations and stable domestic demand amid a downturn in the global steel industry.

* Swiss bank Credit Suisse Group AG has decided to stop financing development of new coal-fired power plants, in addition to its existing policy of not financing related to development of new greenfield thermal coal mines.

* Tata Steel Ltd. is mothballing, instead of closing, its Orb Electrical Steels unit in Newport, South Wales, U.K., as the steelmaker seeks a new buyer for the operation, BBC News reported. Workers at the site will be redeployed to other parts of the business, including Port Talbot. A spokesperson said that mothballing the plant ensures that it is properly maintained over the coming period.

* TNG Ltd. signed a binding term sheet to sell 100% of the iron products to be produced at its Mount Peake vanadium-titanium-iron project in the Australia's Northern Territory to Indian mining conglomerate, Vimson Group. The company intends to annually produce about 500,000 tonnes of iron oxide fines from its planned TIVAN processing facility.

* Chinese crude steel production in 2020 is expected to shrink to 981 million tonnes, from a previous forecast of 988 Mt, as demand in 2020 is expected to decline 0.6% on a yearly basis to 881 Mt, Reuters reported, citing the China Metallurgical Industry Planning and Research Institute.

* German conglomerate thyssenkrupp AG plans to increase the adjusted EBIT margin of its elevators unit, ahead of a planned sale or IPO of the business, by 11.5% to 13.0% in fiscal 2020/2021 and expects annual savings of about €80 million globally over the next three years.

* Kommersant reported that Estonia-registered NT Marine Co. received permission to supply over 600,000 tonnes of coking and steam coal from Russia to Ukraine in December.

* Nippon Steel Corp. intends to terminate its reporting obligations with the U.S. Securities and Exchange Commission.

* Steel Dynamics Inc. completed the sale of US$400 million of 2.800% notes due 2024 and US$600 million of 3.450% notes due 2030. The proceeds from the notes will be used to redeem or satisfy and discharge the entire US$700 million of Steel Dynamics' 5.125% senior notes due 2021, and for general corporate purposes.

* Indonesia is considering to reduce the minimum coal quantity required to be sold to domestic buyers to 20% of the production from the current 25%, according to the country's energy ministry official Dodik Ariyanto, Reuters reported.

* The National Union of Mineworkers in South Africa will march on Dec. 13 to condemn the escalating violence at Rio Tinto's Richards Bay titanium mine that forced the mining giant to mothball the property, a decision that may lead to job losses, Mining Weekly reported.

* Mozambique's Minister of Mineral Resources and Energy issued a second mining license for the Mutamba heavy mineral sands project, a joint venture between Savannah Resources PLC and Rio Tinto.

SPECIALTY

* Northern Minerals Ltd. shed two Chinese directors in the past two months amid revelations that China has increased rare earth oxide exports, while western countries scramble to secure their own supply chains. CEO George Bauk said at the New World Metals Conference in Perth, Australia, that his company had been criticized for having so many Chinese directors on its board, as well as too much Chinese investment.

* The U.S. Army plans to invest in a rare earths plant as part of the country's efforts to boost domestic supplies of the materials used in military weapons and technology, Reuters reported, citing a government document. The Army will reportedly fund at least one project and up to two-thirds of a refiner's cost.

* PJSC Alrosa said that its Luaxe diamond deposit in Angola, held through state-controlled diamond miner Catoca, may start trial mining in mid-2020, and may produce 1 million carats worth US$90 million next year, Reuters reported. The ore from Luaxe will be processed at Catoca's nearby mine.

* Base Resources Ltd.'s definitive feasibility study for its Toliara heavy mineral sands project in Madagascar outlined a post-tax net present value, discounted at 10%, of US$652 million, a 21.4% internal rate of return, and a 4.25-year payback period. The first and second stage capex totals US$511 million for a 19-million-tonne-per-annum operation.

* Prospect Resources Ltd.'s updated definitive feasibility study for its 87%-owned Arcadia lithium project in Zimbabwe outlined a post-tax net present value, discounted at 10%, of US$645 million, a 70% internal rate of return, and a 1.5-year payback period. The base case development of a 2.4-million-tonne-per-annum operation was estimated to cost US$162 million, including a 14% contingency. The study confirmed Arcadia to be a high-margin project with forecast life-of-mine revenue of US$3.42 billion and average annual EBITDA of US$114 million.

* RareX Ltd. submitted a tenement application in Western Australia for exploration licence E38/3455, known as Weld North project, which will complement its Cummins Range rare earths project.

* A report from the administrators of lithium miner Alita Resources Ltd. identified a number of legal violations, including the possibility that it may have been trading insolvent two months before it collapsed, The Australian Financial Review wrote. The report also suggests that China Hydrogen Energy Ltd. and its Liatam Mining unit will become Alita's new owners, the report said.

INDUSTRY NEWS

* The mining industry is likely to remain an attractive end-use industry through 2019 of automated trucks due to efforts to enhance output capacities to meet demand for minerals from the manufacturing sector, according to a report by Transparency Market Research.

* South Africa's electric utility Eskom Holdings SOC Ltd. is aiming to stabilize its power grid by the end of March, following the most severe blackouts in the country in a decade, according to President Cyril Ramaphosa, Reuters reported.

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

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

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