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Rio Tinto ready to sell Grasberg stake to Indonesia for US$3.5B

TOP NEWS

Report: Rio Tinto ready to sell Grasberg stake to Indonesia for US$3.5B

Rio Tinto is ready to sell its stake in the Grasberg copper mine to Indonesia for US$3.5 billion, Bloomberg News reported, citing anonymous sources. Responding to news reports, Rio Tinto confirmed that discussions between the parties are ongoing, but no deal has been agreed yet and there is no certainty that binding agreements will be signed. Rio Tinto's exit from the giant mine depends on Freeport-McMoRan Inc. reaching a deal to transfer some of its stake to state-owned PT Indonesia Asahan Aluminium (Persero). Rio Tinto is entitled to 40% of Grasberg's copper production above specific levels until 2021 and 40% of all production after 2023.

US facing US$3.5B in retaliatory tariffs from Russia, EU, others

The World Trade Organization said Japan and Turkey may impose retaliatory tariffs of US$440 million and US$267 million, respectively, on U.S. goods in response to a previously announced tariff on steel and aluminum in March, Reuters reported. This is on top of Russia's threat to implement US$538 million in tariffs, with the European Union, China and India putting their claims at US$1.6 billion, US$612 million and $165 million, respectively, bringing the total bill to about US$3.5 billion per year.

Analyst says BP's latest investment another step towards M&A in battery minerals

Oil major BP PLC has invested US$20 million in "ultra-fast charging" battery developer StoreDot Ltd. in what at least one analyst says is another indicator that oil companies may soon add battery metals miners to their acquisition target list. StoreDot is developing a new type of electric-car battery that will aim to achieve a charging experience that is comparable to the time spent to refuel a traditional car.

BASE METALS

* Vedanta Resources PLC swung to a profit attributable to shareholders of US$236 million in its fiscal 2018, ended March 31, from a US$23 million loss a year ago. Revenue surged 33% year over year to US$15.36 billion on the back of strong commodity prices and volume ramp-ups. Meanwhile, reversal of a previously recorded noncash impairment charge of US$1.46 billion at Oil & Gas was partially offset by a US$758 million noncash impairment charge at Iron Ore Goa. Vedanta announced a final dividend of 41 U.S. cents per share.

* Workers Union No. 1 at BHP Billiton Group's Escondida copper mine in Chile must submit a new list of petitions between June 1 and June 16 to kick off a new collective negotiations process with the company, daily El Mercurio de Antofagasta reported.

* The price of copper would fluctuate in the next five years between US$2.92 and US$3.06 per pound, and reach a long-term value of US$2.95 per pound, according to Codelco's new business and development plan for the period between this year and 2022 and accessed by daily La Tercera.

* Beryllium and copper advanced alloys company IBC Advanced Alloys Corp. secured a new contract from Lockheed Martin Corp. to manufacture azimuth gimbal housings, which are a key component for the F-35 Lightning II's Electro-Optical Targeting System. The contract is valued at a minimum of US$7.8 million and runs for three years.

* Xiana Mining Inc. signed a definitive agreement with subsidiaries of Glencore PLC to acquire the issued share capital of Chilean copper-gold operation Minera Altos De Punitaqui.

* Minotaur Exploration Ltd. is purchasing nine copper-gold exploration permits, known as the Highlands project, from Syndicated Metals Ltd. The project covers 776 square kilometers in Queensland, Australia.

* A protest against Vedanta-owned Tuticorin copper smelter in the Indian state of Tamil Nadu saw police firing on protesters when the demonstration turned violent, leaving nine people dead, The Economic Times of India reported, citing a government official. At least 30 other people have been injured as several thousand people joined the protest against the planned expansion of the facility.

* Arnaud Soirat, Rio Tinto's copper and diamond head, said the market for copper will become under-supplied by 2021, resulting in higher prices for the metal, Bloomberg News reported.

* Cobalt 27 Capital Corp. secured a stream of over 55.0% and 27.5% on Highlands Pacific Ltd.'s attributable share of cobalt and nickel production, respectively, from the Ramu nickel-cobalt mine in Papua New Guinea for US$113 million.

PRECIOUS METALS

* For most precious metals companies, higher oil prices are a pain in the bottom line, but not so for Franco-Nevada Corp. A royalty company largely focused on the precious metals sector is showing increasing revenue-generating muscle on the back of rising oil and gas prices and a fossil fuel portfolio that it expanded over the past of couple years. Its revenue from oil and gas rose from US$28 million in 2015 to US$47 million in 2017.

* Kairos Minerals Ltd. more than doubled the total mineral resource estimate at its Mount York project in Western Australia to an indicated and inferred resource of 643,000 ounces of gold contained in 14.4 million tonnes grading 1.3 g/t gold.

* Northern Shield Resources Inc. entered into an option agreement to acquire up to an 80% interest in the Five Island property in Nova Scotia.

* Chimata Gold Corp. signed a letter of intent with Emgold Mining Corp. that grants the latter a right to acquire up to a 100% interest in the Troilus North property in Quebec.

* Galantas Gold Corp. expects production of flotation concentrate from development ore at its Omagh gold mine in Northern Ireland to restart early in the third quarter. The permit for underground operations is under a judicial review appeal, and the company is waiting for a court decision.

* The Ministry of Energy and Mines of the Dominican Republic granted Unigold Inc. the Neita Fase II gold-copper exploration concession, covering about 21,031 hectares.

* Goldcorp Inc. CEO David Garofalo said that ideally the company should have an asset in Nevada's Carlin Trend, adding that he would also like to acquire something in Peru, Bloomberg News reported.

* Algold Resources Ltd.'s preliminary economic assessment for the Tijirit gold project in Mauritania pegged a posttax net present value, discounted at 8%, of US$69.0 million, a 23.5% internal rate of return and a 1.8-year payback period.

BULK COMMODITIES

* Verde AgriTech PLC secured a 1 million Brazilian reais debt facility with Santander Bank to fund the construction of a 45 tonnes per hour production facility at the company's Cerrado Verde potash project in Brazil.

* Vedomosti reported that PJSC Novolipetsk Steel will increase production, despite U.S. duties, as experts believe that while demand for slabs is limited in Russia, the market still exists overseas. NLMK has started reconstruction of the continuous casting machine at the Lipetsk production site, and its modernization will allow the production of heavy slabs with a thickness of up to 400 mm and a width of up to 2,800 mm.

* Anglo American PLC unit Kumba Iron Ore Ltd. may be able to extend the current 13-year life of its Sishen iron ore mine in South Africa by investing in technology, Miningmx reported. Kumba CEO Themba Mkhwanazi also said that exploration is ongoing between the company's Sishen and Kolomela mines, and it is undertaking a bankable feasibility study to install a large-scale ultra-high dense media separation plant at Sishen, which will treat 260 million tonnes of stockpiled material.

* Pan Asia Corp. Ltd.'s takeover target New Emerald Coal Pty. Ltd. was placed into voluntary administration and a receiver was appointed by a secured creditor, which intends to proceed to a deed of company arrangement.

* Vale SA denied reports from Brazilian media that suggested the company was in talks with BHP or has reached an agreement to acquire the latter's stake in its Samarco Mineração SA joint venture in Brazil.

* EU Trade Commissioner Cecilia Malmstrom said Washington appeared unsatisfied with the bloc's proposal for greater market access to U.S. industrial products in exchange for a permanent exemption from tariffs on metal imports from Europe, Reuters reported. Meanwhile, the U.S. is said to be considering measures to cut imports of steel and aluminum from the EU by around 10%, The Wall Street Journal reported.

* Activist investor Elliott is nearing the acquisition of a stake in Germany's ThyssenKrupp AG, Reuters reported, citing a source. The move could result in increased pressure on management to restructure the group, as the activist fund steps up its activities in Europe.

* Henan Shenhuo Coal & Power Co. Ltd. will move 451,000 tonnes of annual aluminum smelting capacity to China's Yunnan province as part of a larger project in the area, Reuters reported.

* Itafos signed a definitive agreement with a syndicate of lenders to provide a US$165 million secured term loan facility. The funds are earmarked for working capital, to cover other cash requirements of the Arraias phosphate operations in Brazil and the Conda phosphate operations in the U.S., and to develop other phosphate projects, including Paris Hills in the U.S. and Farim in Guinea-Bissau.

SPECIALTY

* Nemaska Lithium Inc. plans to raise C$280.0 million via an underwritten bought deal public offering of 280.0 million common shares at C$1.00 per share. The proceeds will fund the construction, commissioning, working capital and reserves of the Whabouchi lithium project and general corporate working capital.

* Israel Chemicals Ltd. accepted for purchase US$600.1 million aggregate principal amount of 4.500% senior notes due 2024, following the close of the previously announced tender offer.

* Chalice Gold Mines Ltd. applied for a suite of exploration licenses, forming both the Flinders River vanadium project in Queensland and the Julimar nickel-vanadium project in Western Australia.

* Aura Energy Ltd. said an orebody modelling study defined a high-grade vanadium zone close to surface at the Haggan battery metals project in Sweden of 90 million tonnes at 0.42% V2O5, or vanadium pentoxide, at a 4,000-part-per-million cut-off.

* Triton Minerals Ltd. will fast track studies on the vanadium mineralization within the Nicanda Hill graphite project in Mozambique.

* Juniors remain hopeful of Tanzania's "openness" even as uncertainty over the country's new mining laws and the likelihood of high-grade, low-cost projects being delayed has put at risk CRU Group's forecast of natural graphite market balance by 2023.

* An independent expert estimated that Mineral Deposits Ltd.'s value is at least 40% more than Eramet's recent bid, sending the takeover target's shares to four-year highs, The Australian Financial Review reported.

INDUSTRY NEWS

* According to a report by international NGO Global Witness, Militants of the Taliban and Islamic State are earning between US$2.5 million and US$10 million per annum from mining and selling talc, chromite, and marble from eastern Afghanistan, Bloomberg reported. In the first quarter, about 500,000 tonnes of talc was exported from Afghanistan, and nearly all of it went to Pakistan, Reuters added. Pakistan exports almost a third of U.S. talc imports.

* S&P Global Market Intelligence's Pipeline Activity Index was up slightly in April to 77, from 76 in March, as increases in drilling activity and significant financings were offset by decreases in initial resources and project milestones. By target, the gold PAI was down to 93 from 116, while the base metals PAI rose to 62 from 46.

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