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Fortescue cuts 21% off Q2'17 production costs

TOP NEWS

Fortescue cuts 21% off Q2'17 production costs

Fortescue Metals Group Ltd. shipped 42.2 million tonnes of iron ore in the December 2016 quarter, which is consistent with its guidance and prior performance. Cash production, or C1, costs, meanwhile, came in at US$12.54 per wet tonne, representing a 21% reduction on a yearly basis. The company plans to ship 165 million tonnes to 170 million tonnes in its fiscal 2017 at C1 costs between US$12 to US$13 per tonne.

Iluka FY'16 mineral sands production falls 14.1% YOY

Iluka Resources Ltd. saw its total mineral sands output in the December 2016 quarter go down to 205,400 tonnes from 364,200 tonnes registered in the prior-year period. Total mineral sands output and sales for the 12 months ended December 2016, meanwhile, slid 14.1% and 26.7% year over year, respectively, to 992,900 tonnes and 697,300 tonnes.

Freeport may soon secure temporary mining permit in Indonesia, official says

Indonesia may issue a temporary mining permit for up to six months "in one or two days" to Freeport-McMoRan Inc. unit PT Freeport Indonesia, Reuters reported, citing the country's energy and mineral resources minister, Ignasius Jonan.

BASE METALS

* PT Antam (Persero) Tbk produced a record 20,293 tonnes of nickel contained in ferronickel in 2016, an 18% increase over the year-ago output of 17,211 tonnes of nickel contained in ferronickel.

* Fitzroy River Corp. Ltd.'s A$10.5 million off-market takeover bid for Royalco Resources Ltd. has become unconditional. The company said it will accelerate payment of the 20-cent-per-share cash consideration to Royalco shareholders that have accepted its offer.

PRECIOUS METALS

* Harmony Gold Mining Co. Ltd. expects EPS for the six months that ended Dec. 31, 2016, to be between 3.41 South African rand and 3.61 rand, surging from the year-ago loss per share of 1.02 rand.

* Detour Gold Corp. plans to produce between 550,000 ounces and 600,000 ounces of gold this year at total cash costs of US$690 to US$750 per ounce sold and all-in sustaining costs of US$1,025 to US$1,125 per ounce sold. The company produced 143,512 ounces of gold in the fourth quarter of 2016, totaling 537,765 ounces of gold for 2016.

* New Gold Inc. expects gold production to rise to between 380,000 ounces and 430,000 ounces this year at all-in sustaining costs of US$825 per ounce to US$865 per ounce. The company's 2016 output hit 381,663 ounces of gold at record low all-in sustaining costs of US$692 per ounce.

* OceanaGold Corp. produced 416,741 ounces of gold and 21,123 tonnes of copper for full-year 2016, achieving guidance for gold and beating it for copper. For this year, the company expects to produce 550,000 ounces to 610,000 ounces of gold at all-in sustaining costs of US$600 per ounce to US$650 per ounce sold.

* Kommersant reported that Nord Gold SE, owned over 90% by Alexei Mordashov, may buy minority shareholders stakes or delist from the London Stock Exchange. The company feels that it is undervalued and there is no rotation among key minority shareholders, which would increase the liquidity of its securities. If delisted, Nord Gold may return to the market between 2018 and 2019. The free-float of the company is estimated at US$125 million.

* Randgold Resources Ltd.'s Loulo gold mining complex in Mali is expected to report a production record for the fourth quarter of 2016, CEO Mark Bristow said. According to Bristow, the company was on track to beat its 2016 production guidance of 670,000 ounces of gold. Meanwhile, negotiations are underway to resolve an illegal sit-in at the company's Tongon mine in Ivory Coast, which was started Jan. 26 by some employees demanding annual ex gratia payments.

* Mirasol Resources Ltd. recently signed a letter of intent with OceanaGold Corp. to jointly explore Mirasol's early stage Curva gold project in Argentina. Under the agreement, OceanaGold can earn up to a 75% interest in the property.

* Vast Resources PLC signed a conditional agreement for the partial disposal of a noncontrolling interest in its Pickstone Peerless and Gadzema gold projects in Zimbabwe.

* Gold Resource Corp. suspended mining and milling operations for up to 48 hours at the Arista mine, part of its El Aguila gold operation in Mexico, following two recent fatal accidents.

* INV Metals Inc. was awarded the mining titles to two additional greenfields exploration projects in Ecuador: the 10,071-hectare Tierras Coloradas project and the 3,205-hectare La Rebuscada concession.

* Canadian Silver Hunter Inc. entered a binding option deal with Cobalt Projects International Corp., pursuant to which the latter may earn up to a 100% interest in the company's flagship South Lorrain silver project in Ontario.

BULK COMMODITIES

* AO Holding Co. METALLOINVEST produced 10.3 million tonnes of iron ore in the fourth quarter of 2016, representing a 4.0% increase on a quarterly basis. Metalloinvest's iron ore production for fiscal 2016 also surged 3.1% year over year to 40.7 million tonnes.

* Jindal Steel & Power Ltd. secured a five-year coal linkage of 500,000 tonnes per annum for its sponge iron units through Coal India Ltd.'s recently concluded coal linkage auction, the Press Trust of India reported.

* Glencore Plc's planned maintenance work at its Dunkirk manganese alloys plant in France starting mid-February will take about 26,000 tonnes of ferromanganese production out of the market, Metal Bulletin reported.

* Coal of Africa Ltd. secured the South African Department of Mineral Resources' approval for the stream diversion and associated infrastructure development at its Vele colliery and now awaits the integrated water use license, which is the final approval needed for the stream diversion of the plant's modification project, Fin24 reported.

* Wood Mackenzie believes that the executive order by U.S. President Donald Trump to leave the Trans-Pacific Partnership may result in higher steel costs for U.S. manufacturers and a reduction in high-value exports, CNBC reported. The reversal of the TPP is not an entirely positive outcome for the U.S. steel industry, analysts wrote.

* The former executive chairman of Waratah Resources Ltd., Benjamin Kirkpatrick, was convicted of misleading the market and causing the Australian iron ore and coal miner to breach its continuous disclosure obligations. The Australian Securities and Investments Commission claimed that Waratah Resources announced Oct. 14, 2013, that it had established a A$100 million trade finance facility with the Bank of China, when no such facility had been established or agreed upon.

* Universal Coal Plc begun open pit mining at its New Clydesdale operation in South Africa after securing a five-year, 650,000-tonne-per-annum export contract.

* A number of Arconic Inc. shareholders are pushing efforts to oust CEO Klaus Kleinfeld due to performance issues, following the company's split from Arconic Inc. in November 2016, The Wall Street Journal reported, citing "people familiar with the matter."

* India's coal imports in 2016 fell 5.4% year over year to 194.93 million tonnes, Reuters reported.

* China's steel industry has phased out over 70 million tonnes of capacity this year, far exceeding the target of 45 million tonnes, according to Xu Shaoshi, head of the National Development & Reform Commission, Securities Times reported. Meanwhile, member mills of the China Iron & Steel Association have achieved a combined profit of 33.2 billion Chinese yuan in the first 11 months of 2016, compared with a loss of 52.9 billion yuan the year before.

SPECIALTY

* PJSC ALROSA said its diamond output in 2016 fell to 37.4 million carats from 38.3 million carats in 2015, though sales volume rose to 40.1 million carats from the 30 million carats sold in the preceding year.

* Botswana's state-owned Okavango Diamond Co. posted an 80% jump in 2016 sales to US$547 million, while sales volumes surged 115% to 3.44 million carats, Okavango Deputy Managing Director Marcus ter Haar told Reuters.

* A group of shareholders collectively owning a 6.57% stake in West Africa-focused lithium and gold explorer Birimian Ltd. have called for a general meeting to vote on the removal of two of the company's directors. The shareholders want Chairman Winton Willesee and director Hugh Bresser voted off the board and Michael Langford and James McKay appointed as directors.

* Richland Resources Ltd. produced 839,898 carats of gemstones in the fourth quarter of 2016, beating the quarter's target of 800,000 carats, at a total operating cost of 79 U.S. cents per carat.

* The Supreme Court of Western Australia granted Kidman Resources Ltd.'s request to separate any determination of damages in the proceedings commenced by Marindi Metals Ltd. in November 2016. The trial, set for May 29, will deal exclusively with the issue of whether or not an agreement existed between the companies over lithium rights to the Mount Holland project in Western Australia and will only proceed to determine damages payable to Marindi later if the action is successful.

* Lithium X Energy Corp. signed a binding agreement to acquire the Arizaro lithium brine project in Argentina's Salta province. Under the deal, Lithium X will pay US$250,000 and issue 3.5 million common shares to the vendor for a 100% interest in the project.

* Mesa Exploration Corp. acquired mineral leases comprising 1,923 acres in the Montezuma Canyon Mining District and 640 acres in the Browns Hole Mining District in Utah. Uranium deposits in the districts are hosted in the Morrison and Chinle formation, both of which occur on the projects.

* Magnis Resources Ltd. signed a memorandum of understanding with Russia's ROSATOM International Network for project financing and an off-take agreement on the super jumbo and jumbo flake graphite to be produced from its Nachu graphite property in Tanzania.

* Thor Mining PLC applied for an additional exploration license area to secure prospective ground contiguous to its Molyhil tungsten project in Australia's Northern Territory after encouraging results from the company's 2016 exploration drilling program at the project.

INDUSTRY NEWS

* A majority of Australian fund managers tracked by the JP Morgan Fund Manager Radar increased exposure to the materials sector in December 2016, reflecting their bullish outlook on commodity prices, The Sydney Morning Herald wrote.

* The Australian government earmarked about A$1.9 million to fund four new mining research projects in New South Wales and Queensland to bolster the minerals sector, Mining Weekly reported.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.