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Moody's projects 10.2% default rate for metals and mining; South32's value climbs A$500 million in a day; Anglo American losing 130 tonnes of copper daily on El Soldado strike

Industry Top Trends 2021: Metals and Mining

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Moody's projects 10.2% default rate for metals and mining; South32's value climbs A$500 million in a day; Anglo American losing 130 tonnes of copper daily on El Soldado strike

TOP NEWS

Moody's projects10.2% default rate for metals and mining

Moody's global trailing 12-month speculative-grade defaultrate closed at 4.5% in the second quarter, up from 4.0% in the prior quarterand from 2.5% a year ago. The rating agency believes that the low prices of oiland gas, as well as other commodities, will help push the default rate for U.S.oil and gas companies to 8.6%, and 10.2% for metals and mining issuers over thecoming year.

South32'svalue climbs A$500 million in a day

Following the "inevitable" dividend talk by CreditSuisse analysts and a positive near-term outlook from Citi Group, spin-offSouth32 Ltd.'s valueclimbed A$500 million in a day, TheAustralian reported.

AngloAmerican losing 130 tonnes of copper daily due to El Soldado strike  

Anglo AmericanPlc is losing 130 tonnes of copper daily from its Chile-basedEl Soldadocopper mine due to the ongoing work stoppage by the workers, Metal Bulletin reported.   

BASE METALS

* Yunnan TinCo. Ltd. expects to swing to a net profit of between 5 million Chinese yuanand 10 million yuan in the first half, compared to a net loss of 392.9 millionyuan, or 26.69 fen per share a year ago, due to a price rebound in nonferrousmetals.

* Kommersantreported that the cost of the Tominskoye copper project of rose to US$1.5 billion because ofenvironmental reasons.

* Based on assumptions of temporary mine closures in thePhilippines and the lack of mine supply growth, Goldman Sachs has forecast asignificant rise in nickel and zinc prices. Nickel prices are anticipated torise to US$11,000 per tonne in the next three months, and US$12,000 over thenext six months, before dropping back down to US$10,000 in 12 months, MetalsBulletin reported. 

PRECIOUS METALS

* AngloAmerican Platinum Ltd. flagged a year-over-year of up to 74% in its basic earningsin the six months through June 30. due to a lower inventory gain and a decreasein metal prices.

* FortunaSilver Mines Inc. produced 1.6 million ounces of silver in the secondquarter, representing a 7% year-over-year decline.  Gold production for the period, meanwhile,totaled 9,365 ounces reflecting a 4 % increase on the yearly basis. Silver andgold production for the six-month period to June totaled 3.2 million ounces and18,629 ounces, respectively, surpassing the company's mid-year projection by 7%and 10%, respectively.

* FirstMajestic Silver Corp.'s second-quarter output to 4.7 million silverequivalent ounces from 3.8 million silver equivalent ounces in the same periodof 2015.

* KlondexMines Ltd. achieved record quarterly production of 41,436 gold equivalentounces from its Nevada-based Fire Creek and Midas mines in the second quarter. The increase inproduction during the quarter was primarily due to an increase in tonnes minedand milled.

* Zimbabwean President Robert Mugabe has for theconfirmation of the government's compulsory acquisition of 28,000 hectares ofidle mining land currently held by Zimplats Holdings Ltd. after the company objected to theland's seizure.

* Due to sharp decline in production at the gold mine, Kyrgyzstan'sgross domestic product fell 2.3 % year over year for the six-month period endedJune 30, Reuters reported,as the Kumtor mine accounts for most of the country's industrial output.

* According to Reuters, Tanaka Holdings willacquire privately held precious metals refiner Metalor TechnologiesInternational SA to boost its business and expand into precious metals recoveryand refining in Europe, North America and Asia.

* MiddleIsland Resources Ltd. completed the A$2.5 million of the gold project inWestern Australia from Black OakMinerals Ltd.

BULK COMMODITIES

* Anti-mining group Lock the Gate Alliance representativeRick Humphries pressedon the Queensland government to block Rio Tinto's sale of its mothballed Blair Athol coal mine to for A$1. Tim Buckleyfrom the Institute for Energy Economics and Financial Analysis warned that thesale will leave taxpayers exposed to tens of millions of dollars inenvironmental rehabilitation costs, ABC reported.

* PAOSeverstal's hot metal output in the second quarter quarter overquarter to 2.2 million tonnes, and crude steel production declined 3% quarter overquarter to 2.8 million tonnes. Consolidated sales of steel products increased14% quarter over quarter to 2.8 million tonnes.

* Financial advisory and asset management firm, LazardAustralia, is runninga strategic review and is assessing market appetite for 's Australian coalassets. The review follows Peabody's recent agreement to its interest in undevelopedmetallurgical reserve tenements in Queensland's Bowen Basin for A$104 millionin cash plus royalties.

* A group of Essar Global shareholders inkeda letter of intent with United Steelworkers Union's local unit to negotiate atransaction to acquire ESSARSteel Algoma for about US$900 million, Reuters reported.  

* GlencorePlc's A$1 billion Hunter Valley coal train network reportedlyreceived separatebids during the July 11 auction from major coal carriers AurizonHoldings Ltd., Asciano Ltd.'s Pacific National and U.S.-listed Genesee &Wyoming Inc.  

* China's Baosteel Group Corp. will cut 9.2 million tonnes of crude steel capacitybetween 2016 and 2018, with shutdowns to include facilities in its flagshipplant in Shanghai and branches outside of the city, in a bid to curbovercapacity, Reuters reported.

* After defaulting on other bonds earlier this year, DongbeiSpecial Steel Group Co. Ltd. has again defaultedon a 300 million Chinese yuan three-year private placement note that matured onJuly 11, Reuters wrote.

* An optimized preliminary economic assessment at 's phosphate projectin Brazil indicated a post-tax net present value of US$400.0 million, using a7.5% discount rate and an internal rate of return of 43%.

SPECIALTY

* Rio Tinto's Energy Resources of Australia Ltd. produced489 tonnes of U3O8 in the second quarter, a 25% increase from output in the sameperiod of 2015, despite being unable to carry out exploration. All the oresmilled during the period were from existing stockpiles, which are expected tolast until late 2020.

* General Mining Corp. Ltd. signed a with anotherChinese customer and MitsubishiCorp. to supply 15,000 tonnes of lithium concentrate for thecurrent calendar year and 60,000 tonnes for 2017.

* PremierAfrican Minerals Ltd. has completed the modifications to a plant atits 49%-owned RHA tungsten project in Zimbabwe, with the plantexpected to startoperations later during the week.

INDUSTRY NEWS

* According to Rappler, Philippine Environment SecretaryGina Lopez calledfor the revision of the Philippine Mining Act, saying the law is"unfair" as it is "skewed towards the mining sector" andnot towards the people.

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