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In This List

North American investors 'materially underweight' in Australian miners

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020

Report Outlooks of Lithium and Cobalt

Essential Metals & Mining Insights July 2020


North American investors 'materially underweight' in Australian miners

TOP NEWS

North American investors 'materially underweight' in Australian miners

North American institutional investors, which are "materially underweight" on ASX mining stocks, could potentially inject billions of dollars into the Australian mining sector, according to PCF Capital Managing Director Liam Twigger. According to Twigger, North American institutions hold about 40%, or US$17 billion, of the top 30 gold stocks on the TSX but only hold 27%, or US$6 billion, of the top 30 gold stocks on the ASX.

China no longer main driver of iron ore demand growth, China Hanking says

While China is still a major consumer of iron ore, the Asian powerhouse is no longer the main driver for growth in demand for the steelmaking commodity, according to China Hanking Holdings Ltd. Chinese crude steel production climbed only 0.5% year over year to 808 million tonnes in 2016, and according to China Hanking President and CEO Pan Guocheng, the global iron ore market will continue to be in oversupply given the flattened demand growth.

Met coal producers struggle to find miners as demand ticks up

The U.S. coal industry is reportedly finding that miners are scarce as they aim to ramp up metallurgical coal production in the face of improved demand. In a research note, analyst Lucas Pipes of FBR & Co. said labor was "frequently cited as a limiting factor" by companies responding to improved metallurgical coal prices.

DIVERSIFIED

* BHP Billiton Group is seeking partners to work with as it studies the use of giant, automated cargo ships for dry bulk shipping, Bloomberg News wrote, citing the company's vice president for freight, Rashpal Bhatti.

BASE METALS

* Pan Pacific Copper Co. Ltd. and Mitsui & Co. Ltd. joint venture Minera Lumina Copper Chile SA was forced to partially suspend activities at its Caserones mine in Chile's northern Atacama region following heavy rains and snowfall. The mine remains operational, but the company decided to halt outdoor activities and transportation to and from the site. Rough weather conditions have been affecting northern Atacama and Antofagasta regions since the beginning of the week, daily Area Minera reported.

* Separately, the rough weather conditions forced Codelco to partially suspend operations at its Chuquicamata, Radomiro Tomic, Ministro Hales and Salvador mines in the Antofagasta region. Only smelting plants remained operational at these four mines, while the Gabriela Mistral mine and plant kept operating normally. Operations were resumed later in the day.

* Meanwhile, the Mantos Blancos, Lomas Bayas, Escondida, Michilla, Zaldivar, SQM Salar, Albermarle, Altonorte and Antucoya mines in northern Chile also had to temporarily suspend operations due to the severe weather conditions, Mining Minister Aurora Williams said, online news site Latinominería reported.

* A special congressional investigative committee will probe the contract deals that Codelco has allocated since 2000 given the scandal that emerged after the Chilean office of the comptroller general questioned how the state miner assigns contracts, daily La Tercera reported. The Public Prosecutor's Office has also opened an investigation into the contracts that Codelco has assigned to contractor companies related to the state miner's executives.

* Despite struggling with high production costs and low metal prices, KGHM Polska Miedz SA's Sierra Gorda copper-molybdenum mine in Chile booked an operating profit in the first quarter, with the project now "under control," CEO Radoslaw Domagalski-Labedzki told Bloomberg, daily Diario Financiero reported.

* Taseko Mines Ltd. priced its previously announced offering of US$250 million aggregate principal amount of senior secured notes due 2022. The interest on the notes will accrue at an annual rate of 8.750%, payable semiannually and will be issued at 99% of their principal amount.

* Russia's PJSC Norilsk Nickel Co. said the Talnakh concentrator of its Polar Division has reached design capacity, increasing the plant's throughput capacity by over 30% to 10.2 million tonnes per annum of ore.

PRECIOUS METALS

* Westgold Resources Ltd. agreed to acquire privately owned specialist underground mining contractor Australian Contract Mining Pty. Ltd. for A$2.5 million cash and 14 million Westgold shares. The company plans to integrate Australian Contract Mining as the company's internal diversified mining services division.

* Platinex Inc. entered into a 45-day letter of intent to acquire Cannabee Products Inc., a high-profile medical marijuana development and marketing firm.

* Anova Metals Ltd. entered a merger agreement to acquire all the issued capital of Exterra Resources Ltd. to create a diversified gold company. The merger has the support of the boards of both companies.

* Guatemala's Center for Legal Environmental and Social Action accused Tahoe Resources Inc. subsidiary Minera San Rafael SA of building the Escobal silver-gold mine illegally with no proper permits, and of compromising the local water supply. The company refuted both claims, daily La Hora reported.

* Ramelius Resources Ltd. signed a A$100 million mining contract with MACA for its Mount Magnet gold mine in Western Australia, The West Australian reported. Work on the project is expected to start next month.

* Victoria Gold Corp. said the general corporate tax rate in northern Canada's Yukon Territory was recently reduced from 15% to 12%, which boosted the economics of the company's Eagle gold project on its Dublin Gulch property, with the posttax net present value increasing to C$527 million and the internal rate of return increasing to 30.0%.

* S&P Global Ratings assigned a preliminary long-term corporate credit rating of B+ to Sibanye Gold Ltd., with a positive outlook, amid expectations that the miner will be able to generate positive discretionary cash flow and gradually reduce leverage following its Stillwater Mining Co. acquisition.

* Sibanye also received a Ba2 rating from Moody's, based on the miner's solid business profile and record of setting and maintaining conservative financial policies, the firm said.

* Seabridge Gold Inc. closed the acquisition of a private company and its Snowstorm gold project, comprising 700 mining claims and 5,800 acres of fee lands in Nevada, from Paulson & Co. Inc. subsidiary PFR Gold Holdings LP.

* Beaufield Resources Inc. completed the acquisition of the 299-hectare Windfall East gold project in Quebec from Alto Ventures Ltd.

* A feasibility study at North American Palladium Ltd.'s Lac des Iles palladium mine in Ontario estimated a posttax net present value, at an 8% discount, of C$470 million, resulting from cash flow of C$678 million.

BULK COMMODITIES

* Hwange Colliery Co. Ltd. started a voluntary severance program in March, looking to cut up to half of its workers in Zimbabwe in order to produce competitively as it looks to restart underground operations by the end of September, Bloomberg News wrote. Hwange Colliery employs about 2,400 people and is the owner and operator of the Hwange coal mine in Zimbabwe.

* Ukraine's state-owned news agency Ukrinform reported that coal from the occupied territories in Donbass may be sold to Turkey and Spain with a 50% discount, according to CEO of DTEK Energo Dmytro Sakharuk.

* Quantum Resources Ltd. executed a binding term sheet to acquire Halcyon Resources Pty. Ltd., a private Australian company focused on the production of high-purity alumina and high-purity silica from kaolin clay.

* The Competition Commission in South Africa approved Coal of Africa Ltd.'s proposed acquisition of Pan African Resources Coal Holdings Pty. Ltd and its 91% stake in the Uitkomst thermal coal operation, Mining Weekly reported. Coal of Africa in April agreed to buy the Pan African Resources Plc unit for 275 million South African rand.

SPECIALTY

* A process was initiated to sell surplus underground and surface mining equipment from diamond major De Beers SA's suspended Snap Lake mine in Canada's Northwest Territories, Mining Weekly reported. Major assets are offered by negotiated sale from June 7 to July 31, with the remaining assets slated to be auctioned during the week of Aug. 1.

* Lithium Americas Corp. closed a US$172 million funding deal with Jiangxi Ganfeng Lithium Co. Ltd.'s GFL International Co. Ltd. unit, making the Chinese firm the largest Lithium Americas shareholder with a 19.9% stake.

INDUSTRY NEWS

* A total of 454 mining projects applied for environmental permits between 2011 and 2016 before Chile's environmental evaluation service, Servicio de Evaluación Ambiental. Of these, 50% were approved, 2% were rejected and 19% were not admitted as were deemed incomplete, according to a report by Chilean copper commission Cochilco. On average, the process took 289 days for the projects that were approved and 202 days overall, the report said, daily Pulso reported.

* The council of Colombian town Jericó in the Arequipa department voted to ban mining in the area. It is the fourth city this year to vote against extractive activities, following the footsteps of Cajamarca. The decision puts AngloGold Ashanti Ltd. in a difficult position as it owns mining exploration concessions in Jericó. The company lamented the decision and called it unconstitutional.

* Over 60 countries are set to sign a deal in Paris aimed at cracking down on tax avoidance by multinational companies, the Financial Times and Bloomberg News reported.

* The provincial government of East Kalimantan, Indonesia, will revoke 809 mining licenses that have expired, Bisnis Indonesia reported. There are currently 1,404 mining licenses in the region.

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