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South32 reports mixed H1'20 output; Tesla, Glencore discuss cobalt supply deal


South32 reports mixed H1'20 production

South32 Ltd.'s attributable alumina production in the first half of fiscal 2020 climbed 4% year over year to 2.64 million tonnes, and aluminum production remained steady at 496,000 tonnes. Energy coal and metallurgical coal output slid 2% and 7% to 12.62 Mt and 2.86 Mt, respectively. Payable silver production climbed 2% to 6.16 million ounces. Payable lead and zinc output jumped 14% and 24%, respectively, to 55,300 tonnes and 32,500 tonnes, while nickel production decreased 2% to 20,600 tonnes.

Tesla, Glencore in talks over cobalt supply deal

Tesla Inc. is in talks with Glencore PLC over a long-term contract that would see the electric-carmaker procuring cobalt from the Swiss commodities trader, Bloomberg News reported, citing people familiar with the matter. The news outlet said executives from the two companies mapped out the deal before an event to mark Tesla's first sales of its Model 3 sedan from its Shanghai plant. Bloomberg said a deal with Glencore would help Tesla prevent a shortage of cobalt as it boosts its production of electric cars at its Gigafactory in Shanghai.

China pledges to buy over US$200B in 'phase one' deal with 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. As part of the trade deal, China agreed to increase its purchases of scandium and yttrium from the U.S., Reuters reported.


* Teck Resources Ltd. purchased the SunMine solar energy facility in British Columbia from the City of Kimberley for about C$2 million. President and CEO Don Lindsay said the facility will help the company gain experience as it targets the use of solar power at other operations.

* Atalaya Mining PLC forecast copper production of between 55,000 and 58,000 tonnes in 2020. Copper output in 2019 climbed 6.7% to 44,950 tonnes.

* 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.

* 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.


* Toronto-listed First Majestic Silver Corp.'s 2019 production increased 15% to 25.6 million silver equivalent ounces, meeting the top end of its guidance of 24.4 to 26.0 Moz. Silver production climbed 13% to 13.2 Moz and gold production jumped 21% to 134,580 ounces.

* B2Gold Corp.'s production in the fourth quarter of 2019 totaled 245,140 ounces, including its attributable share of ounces from Calibre Mining Corp. and output from discontinued operations. In the full year, the company produced 980,219 ounces, beating guidance of 935,000 to 975,000 ounces for 2019. The company forecast 2020 production of 1.0 million ounces to 1.06 Moz.

* Canadian miner Pan American Silver Corp. produced 6.6 million ounces of silver and 173,900 ounces of gold in the fourth quarter of 2019, according to preliminary figures, increasing year over year from 6.1 Moz of silver and 37,200 ounces of gold.

* Barrick Gold Corp. plans to upgrade its Porgera gold mine in Papua New Guinea, held under a joint venture with Zijin Mining Group Co. Ltd., to a tier-one asset by raising its production by 18% or more, Reuters reported. The company has applied to renew the mine's permit for 20 years, and is waiting to start negotiations with the country's executive council, led by Prime Minister James Marape. The mine produced 421,500 ounces of gold in 2018.

* Shanta Gold Ltd.'s production in 2019 totaled 84,506 ounces, beating full-year gold output guidance of 80,000 to 84,000 ounces. In 2020, the company expects to produce 80,000 ounces to 85,000 ounces at all-in sustaining costs of US$830 per ounce to US$880/oz.

* New refineries are opening up in Africa to process gold mined through small-scale operations by informal miners, Reuters reported. The refineries allow local miners and states to extract value from the raw materials instead of exporting them to other regions.

* 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.

* Cora Gold Ltd.'s initial scoping study for its Sanankoro gold project in Mali outlined a post-tax net present value of US$24.2 million, a 73% internal rate of return, and payback in less than 18 months, at a gold price of US$1,400 per ounce. Pre-production capex was estimated at US$20.6 million for a 1.5 million-tonne-per-annum heap leach operation.

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

* 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.


* Whitehaven Coal Ltd.'s total managed salable coal production in its second quarter of fiscal 2020 dropped 44% year over year to 3.1 million tonnes, while total managed coal sales fell 17% to 4.5 Mt. The company said production was impacted by labor shortages and dust events at its Maules Creek mine in New South Wales, Australia, and the scheduled longwall move at the Narrabri mine. Managed salable coal production in the first half slid 16% to 8 million tonnes, and sales declined 2% to 10 million tonnes, on a yearly basis.

* Alcoa Corp. swung to a US$303 million net loss, or US$1.63 per share, in the fourth quarter of 2019 from a year-ago net profit of US$51 million, or 27 U.S. cents per share, in the fourth quarter of 2018. Revenues fell to US$2.44 billion from US$3.34 billion in the prior-year period. The results included US$246 million in special items that were largely driven by pension and post-employment benefits.

* RAG-Stiftung, a public sector foundation and the controlling shareholder of German chemicals group Evonik Industries AG, joined a consortium led by private equity firms Advent International Corp. and Cinven in a bid for thyssenkrupp AG's €15 billion elevator business, Reuters reported, citing two unidentified sources.

* Black Mountain Resources LLC, the new owner of a Kentucky mine purchased in the bankruptcy reorganization of Blackjewel LLC is struggling to reopen due to disputes with state regulators, according to a letter posted in the U.S. Bankruptcy Court for the Southern District of West Virginia.

* Germany has agreed to give €40 billion in aid to communities impacted by the government's plan to phase out brown coal, or lignite, at its power plants, as the country looks to close down all of its coal-fired power plants by 2038, Reuters reported. Angela Merkel's government also plans to cut carbon emissions to 55% of 1990 levels by 2030.

* 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.

* Over 2,600 people 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.

* 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.

* Coronado Global Resources Inc. will gradually resume operations at its Curragh coal mine complex in Queensland, Australia, on Jan. 17 at the earliest, which were suspended following the accidental death of a Thiess Pty. Ltd. employee at the site.


* The U.S. government is expected to push its defense sector, and other industries using critical minerals, to establish supply chains that exclude China, after a new US$738 billion defense bill for fiscal 2020 zeroed in on domestic rare earth supplies, according to U.S. documents. The National Defense Authorization Act, signed into law on Dec. 20, 2019, also prohibits the U.S. Department of Defense from acquiring tantalum, which is now categorized as a "critical mineral," from Russia, China, Iran and North Korea.

* 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 Yacimientos de Litio Bolivianos 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.

* Lucara Diamond Corp. agreed to work with luxury retail firm Louis Vuitton and the HB Co. to polish its 1,758-carat Sewelô diamond — unearthed at its Karowe mine in Botswana last year — into a collection of jewelry. Lucara said 5% of the retail sales generated from a collection of diamonds from Sewelô will be invested directly back into Botswana on community-based initiatives. The company believes the diamond is the largest ever recovered in Botswana.


* 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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