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In This List

US, China sign 'phase one' deal; Alcoa swings to US$1.13B net loss in FY'19

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


US, China sign 'phase one' deal; Alcoa swings to US$1.13B net loss in FY'19

TOP NEWS

US, China sign 'phase one' deal with pledge to buy more than US$200B from US

The U.S. and China paused their nearly two-year trade conflict with the signing of a "phase one" agreement that includes Beijing's pledge to purchase more than US$200 billion of additional American products and services over the next two years. Issues including subsidies and state-owned enterprises will likely be left for phase two. They will be much more challenging because they threaten the heart of the Chinese economic system. "They have been the 900-pound gorilla in the room since negotiations began more than a year ago," said Doug Barry, a spokesman for the U.S.-China Business Council. "These will be difficult talks, and it will take time to see progress."

Alcoa swings to net loss of US$1.13B in FY'19

Alcoa Corp. swung to a net loss of US$1.13 billion, or US$6.07 per share, in full-year 2019 from a net income of US$250 million, or US$1.33 per share, in the previous year. The company's revenue went down 22% to US$10.43 billion in 2019 from US$13.40 billion in 2018. The company is expecting total bauxite shipments to range between 48.0 million and 49.0 million dry tonnes for full-year 2020, while alumina shipments are expected to be between 13.6 million and 13.7 million tonnes.

Rare-earth players see momentum building as US leans on defense supply chains

The U.S. government is expected to strengthen its push to encourage its defense sector and other industries that use critical minerals to establish non-Chinese supply chains, after a US$738 billion defense bill for fiscal 2020 signed into law Dec. 20, 2019, zeroed in on U.S. rare earth supplies, according to U.S. documents.

BASE METALS

* Trafigura Group Pte. Ltd. is looking to take a lead in the trading sector in tackling climate change, and aims to set a target to cut the intensity of its emissions beginning this year, Reuters reported. The company will include emissions from its newly acquired zinc and smelting mining firm Nyrstar NV.

* Nexa Resources SA produced 361,000 tonnes of zinc for full-year 2019, within guidance of 360,000 to 380,000 tonnes. The company's zinc equivalent production is expected to increase by 6.4% per year on average from 2020 to 2022, mostly due to the commissioning of the Aripuana project in Brazil.

* Indiana Resources Ltd. served a notice to Tanzanian President John Magufuli, the Tanzanian solicitor general and the Tanzanian Ministry of Energy and Minerals, claiming that Tanzania breached international agreements by canceling the company's retention license over the Ntaka Hill nickel project and transferring the rights to the government. The company may initiate arbitration if a resolution with the government cannot be reached within six months.

* Amur Minerals Corp. received approval for the baseline environmental assessment for its Kun-Manie nickel-copper project in Russia. The approval means that the company does not need any extraordinary programs beyond those that it already planned to start the operation.

* Congo's state-owned miner Gécamines SA opened the Deziwa copper-cobalt project, which it owns through a joint venture with China Nonferrous Metal Mining (Group) Co.Ltd., Reuters reported.

* AVZ Minerals Ltd.'s unit AVZ Power SAU signed a memorandum of understanding with Congo's Ministry of Hydraulic Resources and Energy to investigate refurbishment of the Mpiana-Mwanga hydro-electric power station, which can potentially provide 54 MW of electricity to the company's Manono lithium-tin project and the nearby Manono town site.

PRECIOUS METALS

* Toronto-headquartered Yamana Gold Inc. reported preliminary production of 256,288 ounces of gold equivalent in the fourth quarter of 2019, bringing its full-year 2019 output to 1.02 million ounces, beating annual guidance of 1.01 Moz.

* Canada-based Pan American Silver Corp. produced 6.6 million ounces of silver and 173,900 ounces of gold in the fourth quarter of 2019, increasing from 6.1 million ounces of silver and 37,200 ounces of gold booked in the year-ago period, according to preliminary figures.

* Hochschild Mining PLC's full-year 2019 attributable gold equivalent production declined to 477,400 ounces from 503,640 ounces, but the company achieved record production at its Inmaculada mine in Peru at 260,126 gold equivalent ounces and at its San Jose mine in Argentina at 15.4 million silver equivalent ounces. Hochschild expects production in 2020 of 422,000 gold equivalent ounces at all-in sustaining costs of US$1,040 to $1,080 per gold equivalent ounce.

* Toronto-based miner McEwen Mining Inc. reported gold equivalent production of 46,263 ounces in the fourth quarter of 2019, increasing from 40,217 ounces year over year. Full-year 2019 output slightly dropped to 174,420 ounces from 175,561 ounces in 2018, but the company was still near the top end of last year's guidance of up to 176,000 ounces.

* Pancontinental Resources Corp., in cooperation with Environmental Risk Transfer LLC, was selected to explore the historic Brewer gold mine in South Carolina.

* Erris Resources PLC completed its due diligence and decided to start exploration work to acquire 80% of Greenore Gold Plc's gold- and base metals-prospective Loch Tay project in central Scotland. The company can earn the stake by defining an inferred resource of at least 250,000 gold ounces within four years.

* Industrial gold production in Mali increased 7% to a record 65.1 tonnes in full-year 2019, Reuters reported, citing data from the country's mines ministry. The increase was partly due to Resolute Mining Ltd.'s launch of production at its Syama mine.

BULK COMMODITIES

* Fortescue Metals Group Ltd. opened a new office in Shanghai, China, to support the company's relationships with its existing and new customers, partners and suppliers in the country. The new office will include activities of the company's wholly owned Chinese sales entity, FMG Trading Shanghai Co. Ltd., which was established in mid-2019. Fortescue CEO Elizabeth Gaines expects modest growth in Chinese steel demand during 2020 on the back of rising urbanization and the country's Belt and Road Initiative projects, Reuters reported. The country produced 904.18 million tonnes of steel in the first 11 months of 2019, according to government data.

* Another city council in California took action to limit coal exports off the West Coast by voting to phase out storage and handling of the fuel at an existing terminal. The Richmond City Council in California passed an ordinance that will phase out some existing uses of coal in the city over a three-year period, Bloomberg News reported. The council will also ban the establishment or expansion of storage and the handling of the fuel along with petroleum coke within city limits, according to a draft of the ordinance.

* More than 2,600 people have signed a petition urging the Palaszczuk government in Queensland, Australia, to block the China First coal project owned by Australian businessman Clive Palmer's Waratah Coal Pty Ltd., The Sydney Morning Herald reported. The state government is asked to grant a state-protected status to a nature reserve where the project is located, the report said.

* China's finished steel exports dropped 7.3% to 64.3 million tonnes in 2019, the lowest annual total since 2014, and an indication of robust steel demand despite higher crude steel capacity, S&P Global Platts reported. Finished steel exports in 2020 are unlikely to increase much from last year due to the continued strength in domestic demand, according to S&P Global Platts analysis.

* American Resources Corp. agreed to sell certain of its Perry County Resources subsidiary's assets for approximately U$1 million in cash and equipment, with the deal expected to close within 30 days.

* Iluka Resources Ltd. awarded a A$1.9 million goods and services contract to Vysarn Ltd.'s subsidiary Pentium Hydro Pty Ltd. to drill dewatering and injection wells at the Cataby mine in Western Australia.

* Compañía Minera Autlán SAB de CV's operational halt at its ferroalloys plant in Gomez Palacio, Mexico, has extended into January as difficult domestic steel market conditions continue, Reuters reported, citing the company. Autlan will continue serving its customers through its Teziutlan and Tamos plants.

* Cleveland-Cliffs Inc. commenced offers to exchange outstanding US$270.2 million of 6.375% senior notes due 2025 and US$391.6 million of 7.00% senior notes due 2027 issued by an AK Steel Holding Corp. unit. The transaction is part of Cleveland-Cliffs' planned US$1.1 billion purchase of AK Steel.

* Vietnam's steel industry is expected to face challenges this year as production capacity increased amid falling demand and protectionist measures imposed by other countries to cut imports, Viet Nam News reported.

* Coronado Global Resources Inc. said that work safety sessions are taking place at the Curragh coal mine complex in Queensland, Australia, with all workers on site before unaffected areas of the complex gradually resume operations on Jan. 17 at the earliest. The mine was suspended following the accidental death of a Thiess Pty. Ltd. employee at the site.

SPECIALTY

* The U.S. is in short supply of rare earths, which is included in the items that China agreed to buy more from the North American country under phase one of the trade deal the two countries have signed, Bloomberg reported.

* Analysts and executives are expecting a rise in lithium prices this year as capacities decline and Chinese demand starts to increase, the Financial Times reported. However, according to analysts, some small miners in Australia that do not produce chemicals for higher value-added batteries, but instead export lithium-containing rocks known as spodumene, will remain pressured.

* Chile's environmental regulator defended its approval of Sociedad Quimica y Minera de Chile SA's plan to remediate damages to the Atacama salt flat, Reuters reported. Chile's Environmental Superintendent approved SQM's US$25 million compliance plan in 2019 after it was found that SQM had overdrawn lithium-rich brine from the salt flat. A local environmental court in Antofagasta, however, said that SQM's plan is "insufficient."

* Bolivia's state-owned YLB Chief Juan Carlos Zuleta told Reuters that the lithium company is planning to impose strict limits on foreign investment in extraction and processing of the metal. "It is important for the international community to know that Bolivian law says lithium should be extracted and processed by Bolivians," Zuleta said.

* Australian Vanadium Ltd. signed a letter of intent with Hebei Yanshan Vanadium and Titanium Industry Technology Research Co. Ltd. to negotiate and sign a binding technical services and purchase agreement for the former's vanadium products.

* Montreal-based GeoMega Resources Inc. signed a long-term lease for the site of its rare earth magnets recycling demonstration plant. Construction of the industrial complex in the Saint-Bruno-de-Montarville area was completed in late 2019 with final detail work now ongoing. The company said the location provides enough space for the plant and future expansions.

INDUSTRY NEWS

* All four exploration metrics — significant financings, drilling activity, initial resources and positive project milestones — increased in December, as S&P Global Market Intelligence's Pipeline Activity Index, or PAI, jumped to 96 from 79 in November, the index's best showing in over a year. The gold PAI increased to 149 from 123, while the base metals PAI rose to 55 from 43 over the same period.

* With its significant mineral endowment across a wide landscape, Canada's minerals production is the world's fifth-largest for gold, third-largest for nickel and diamonds, second-largest for uranium and fourth-largest for platinum group metals, S&P Global Market Intelligence's Metals and Mining Research team reported. While price struggles have put pressure on Canadian mines for some of these commodities in the past, there is no immediate sign of Canada yielding its position in those rankings while its gold production continues to grow, far outpacing the growth in any other commodity.

* Iran's economy is expected to fall deeper into recession this fiscal year with foreign reserves to drop to US$73 billion by March, posting a loss of almost US$40 billion in two years, due to sanctions curbing oil sales, according to the Institute of International Finance, Reuters reported.

* The government of Egypt issued a new law that appears to eliminate the need for mining companies to form joint ventures with the state and to impose a ceiling of 20% on state royalties, Reuters reported, noting that the measures have long been advocated by the private sector.

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

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