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Codelco's Q1'19 profit, output plunge YOY; Lynas' Gebeng to continue operations


Essential IR Insights Newsletter - April 2023


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According to Market Intelligence, April 2023


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Codelco's Q1'19 profit, output plunge YOY; Lynas' Gebeng to continue operations


Codelco's Q1'19 profit, output plunge YOY

Codelco's pretax profit in the first quarter plunged 31% year over year to US$372 million from US$537 million in the year-ago period. Copper output fell 18% to 342,000 tonnes from 416,000 tonnes. Meanwhile, labor unions at the Chuquicamata mine will postpone a strike after it agreed to hold government-mediated talks with the company, Reuters reported. CEO Nelson Pizarro expressed confidence that a deal will be reached with workers.

Malaysia to allow Lynas to continue operating Gebeng rare earths plant

Amid fears that China may tighten rare earths supply as part of its ongoing trade war with the U.S., Malaysian Prime Minister Mahathir Mohamad said he plans to allow Lynas Corp. Ltd.'s US$800 million Gebeng rare earths processing plant to keep operating in the country, Reuters reported. The statement put an end to months of uncertainty over the future of the plant. Mahathir noted that radioactive waste needs to be addressed, perhaps by spreading it instead of it being concentrated in one place.

Report: US Defense Department aims to cut reliance on China's rare earths

The U.S. Defense Department is requesting new funding from the federal government to increase the production of rare earth minerals in the country and reduce reliance on China, Reuters reported. The funding request comes amid a reported threat from China that it could use its dominance in the said minerals as leverage in its trade dispute with the U.S. Meanwhile, the Chinese Commerce Ministry said it is willing to meet reasonable demand for rare earths from other countries as long as they do not turn around and suppress China, the newswire wrote separately.


* SolGold PLC and Cornerstone Capital Resources Inc. expect Ecuador's Constitutional Court to reject a petition to hold a mining referendum that could impact their Cascabel copper-gold joint venture. For a vote to proceed, the petitioners need court approval and 10% of the signatures of the voting population of the provinces involved.

* Zambia's attempt to seize Vedanta Resources Ltd.'s Konkola Copper Mines PLC over alleged environmental breaches should serve as a warning for other mining firms to follow the law, Reuters reported, citing a statement by Mines Minister Richard Musukwa.

* Benchmark copper prices on the London Metal Exchange fell almost 9% this month due to rising trade tensions between the U.S. and China. However, supply is expected to tighten in the second half amid disruptions that copper producer Codelco is facing in Chile, political and power problems in Zambia and restrictions on scrap imports in China, Reuters reported.

* An updated feasibility study for RNC Minerals' Dumont nickel-cobalt project in Quebec delivered a posttax net present value, discounted at 8%, of US$920 million, with a 15.4% internal rate of return over a 30-year mine life.

* Fincraft Resources JSC will spend US$200 million to US$300 million to launch mines at Gornostaevsky, one of the largest cobalt-nickel deposits in Kazakhstan, within three years, Kommersant reported.


* An illegal strike that led to more than 600 employees being dismissed at the Mototolo mine run by Anglo American Platinum Ltd. has been resolved, and the workers will be reinstated, the company said.

* Endeavour Silver Corp. slashed the workforce at its Mexican silver-gold operations by 18% as part of an effort to improve the company's financial performance for the remainder of the year.

* Agnico Eagle Mines Ltd. achieved commercial production at its Meliadine gold mine in Nunavut, Canada, ahead of schedule and below budget. The mine is expected to produce 230,000 ounces of gold this year at total cash costs of US$612 per ounce.

* NV Gold Corp. signed a binding letter of intent to lease the Slumber gold property in Nevada. A preliminary exploration program will commence shortly.

* Discovery Metals Corp. agreed to acquire Levon Resources Ltd. through a share exchange of 0.55 of a Discovery share for each Levon share to create a silver-focused exploration company in Mexico. Upon closing, former shareholders of Discovery and Levon will hold 50.4% and 49.6%, respectively, of the combined entity.

* Orefinders Resources Inc. demanded Mistango River Resources Inc.'s management to convene a shareholders' meeting within 60 days after the 31% stockholder called for a board revamp. Orefinders noted that Mistango has not held a shareholders' meeting since June 2017.

* Panthera Resources PLC exercised an option to acquire the Labola gold project in Burkina Faso.


* Vale SA did not acknowledge several workers' concerns about the unstable dam structure at the Feijao mine in Brazil before it collapsed and killed nearly 300 people in January, The Wall Street Journal reported. The company denied ignoring warning signs.

* Vale CEO Eduardo Bartolomeo, who succeeded Fabio Schvartsman, will keep his post until 2021 following a vote by the board, Fastmarkets MB wrote.

* Adani Enterprises Ltd. is confident that Queensland's environment department will approve the company's plan to protect the endangered black-throated finch at its Carmichael coal mine, The Sydney Morning Herald reported. The department, which is expected to release its decision shortly, said Adani has provided all the necessary information it needs to make a ruling.

* Russian steelmaker PJSC Novolipetsk Steel said its US$500 million placement of seven-year eurobonds was more than three times oversubscribed.

* Cleveland-Cliffs Inc. fully redeemed its outstanding 4.875% senior notes due April 2021, which is part of a liability management transaction that also included the retirement of US$600 million of Cliffs’ outstanding 5.75% senior guaranteed notes due 2025.

* Jupiter Mines Ltd., the 49.9% owner of the Tshipi Borwa manganese mine in South Africa, said the country remains the leading manganese supplier to the seaborne market, accounting for over 35% of global production outside China.

* Japan and South Korea supplied about 57% of India's 630,000 tonnes of steel imports in April, compared to about 45% in the year-ago period, Reuters reported, citing government data. The two countries have free trade agreements with India, giving them an advantage over other steel producing nations.

* Atlantic metallurgical coal and metallurgical coke markets are facing potentially lower spot activity from a further weakening in European steel demand, according to S&P Global Platts.

* National Mineral Development Corp. Ltd. plans to acquire the 21.44% shareholding it does not already own in Legacy Iron Ore Ltd., The New Indian Express reported.

* Australian Bauxite Ltd. executed a memorandum of understanding with the Port Authority for the Port of Bundaberg to investigate the possibility of shipping bauxite produced from the Binjour project in Queensland, Australia, through the port.


* Wesfarmers Ltd.'s bid to acquire Lynas is looking bleak as the rare earths producer's share price grew 15% in May 29 trading on the possibility that China may be planning to restrict exports of rare earth minerals amid mounting trade tensions with the U.S., The West Australian reported. In May 30 trading, Lynas share prices hit A$2.77, which is above Wesfarmers' rejected cash acquisition proposal of A$2.25 per share.

* Aiming to capitalize on the recent tensions between the U.S. and China over rare earths, Canada-based Hudson Resources Inc. said it is in discussions with several parties about a possible partnership for the development of its Sarfartoq Carbonatite rare earths project in Greenland. Shares in Hudson rose as much as 9%.

* De Beers SA ended production at its Victor mine in Ontario, the first and only diamond mine in the Canadian province, Canadian Mining Journal wrote. The last economic ore was processed May 25, while the mineral processing plant will be permanently shut down by the end of June.

* MP Materials is seeking the U.S. government's help as it faces short-term refining challenges amid the country's plan to lessen its reliance on China over rare earths minerals, CNBC reported, citing MC Minerals Co-Chairman James Litinsky, who also noted that the company's Mountain Pass mine in California should be self-sufficient by next year.

* Chile is losing ground to rival countries, including Australia and Argentina, in the global leadership of lithium production as the country is slow to open up to new players in the market, Reuters reported.


* Defaults are on the rise in the metals and mining sector in 2019, and many of the companies are based in the U.S., according to S&P Global Ratings.

* Of the top 25 mining companies by market value as of May 24, 14 bested their S&P Global Market Intelligence consensus EPS estimates for the first quarter, while three met estimates and seven underperformed.

* Newly elected Papua New Guinea Prime Minister James Marape is targeting tighter legislation for the resources sector to benefit the country, Reuters reported.

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