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CEO plans to boost BHP value by 70%; Gecamines to look into Freeport's Tenke mine sale; Vale, Freeport emphasize asset sales plans

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020


CEO plans to boost BHP value by 70%; Gecamines to look into Freeport's Tenke mine sale; Vale, Freeport emphasize asset sales plans

TOP NEWS

Mackenzie plans to boost BHP Billiton's value by 70%

BHP Billiton GroupCEO Andrew Mackenzie outlined a plan to potentially increase the value of the company by 70% via cost cutting,boosting efficiencies and betting on a handful of oil, copper and potash growthassets. During an investor conference, he indicated that he would not wait for abounce in metal prices to expand the company; he also dampened speculation thatBHP Billiton would seek to take advantage of record-low mining valuations and aswell of distressed asset sales by buying new mines.

Gecaminesto probe Freeport's planned US$2.65B Tenke project sale

Democratic Republic of Congo state miner Gecamines SARL plans to investigateFreeport-McMoRan Inc.'ssale of its majority interest in the TenkeFungurume copper project in the country to China Molybdenum Co. Ltd., Reuters reported. Gecamines, whichholds a 20% stake in the project, said it "will assert its rights."

Vale, Freeportreiterate planned asset sales

Vale SAis standing by its plans to sell offUS$10 billion worth of core assets in a bid to strengthen its balance sheet, despitea recent rise in the prices of commodities. Between US$4 billion to US$5 billionworth of noncore assets this year are slated for disposal, which was down from thepreviously flagged US$4 billion to US$5.5 billion after the company failed to selloff its 40% stake in bauxite producer MineraçãoRio do Norte SA. Meanwhile, Freeport CEO Richard Adkerson said the companyis in talks for more asset sales and would consider selling a minority interestin a package of other mining assets as Freeport aims to slashits debt by half over the next two years. According to Reuters, the CEO alsonoted that the company is open to discussions on all of its assets but did not disclosefurther details on the ongoing talks over potential deals.

DIVERSIFIED

* BHP BillitonGroup CEO Andrew Mackenzie outlined a plan to potentially of the companyby 70% via cost cutting, boosting efficiencies and betting on a handful of oil,copper and potash growth assets. During an investor conference, he indicated thathe would not wait for a bounce in metal prices to expand the company; he also dampenedspeculation that BHP Billiton would seek to take advantage of record-low miningvaluations and a swell of distressed asset sales by buying new mines.

* Vale SAis standing by its plans to sell offUS$10 billion worth of core assets in a bid to strengthen its balance sheet, despitea recent rise in the prices of commodities. Between US$4 billion to US$5 billionworth of noncore assets this year is targeted for divestment, which was down fromthe previously flagged US$4 billion to US$5.5 billion after the company failed tosell off its 40% stake in bauxite producer MineraçãoRio do Norte SA.

* South32 Ltd.has achieved US$182 million of controllable cost savings in the first half of 2016,according to a May11 presentation held by CEO Graham Kerr at the Bank of America Merrill LynchGlobal Metals, Mining & Steel Conference in Miami. In total, the company aimsto reduce controllable costs by US$300million in the full year 2016.

* Glencore Plcsaid record-lowsector margins are setting the scene for the next price upswing as current marginscannot sustain present production levels over the medium term and structural deficitsare returning, led by zinc. Meanwhile, supply challenges for copper and zinc remaindue to resource quality and scarcity at current prices. Meanwhile,Glencore CEO Ivan Glasenberg noted that the mining industry's profits can be improvedby learning from the mistakes made over the past 12 years, Bloomberg News wrote.Using the headline "Recipe for Better Returns," theCEO said volume growth cannot be an end in itself and that the industry's managementincentives should encourage "rational behavior."

BASE METALS

* Democratic Republic of Congo state miner Gecamines SARL plans to investigateFreeport-McMoRan Inc.'ssale of its majority interest in the TenkeFungurume copper project in the country to China Molybdenum Co. Ltd., Reuters reported. Gecamines, whichholds a 20% stake in the project, said it "will assert its rights."

* Meanwhile, Freeport CEO Richard Adkerson said the company isin talks for more asset sales and would consider selling a minority interest ina package of other mining assets as Freeport targets to slashits debt by half over the next two years. According to Reuters, the CEO alsonoted that the company is open to discussions on all of its assets but did not disclosefurther details on the ongoing talks over potential deals.

* The Andalucian government of Spain formally granted KimberleyDiamonds Ltd. the Lomerocopper-gold project. The company is evaluating the potential for a profitable redevelopmentof Lomero through its wholly owned Spanish subsidiary, Alto Minerals SL.

* Amur MineralsCorp. said exploration at its Kun-Manie deposit in Russia over the past year has resultedin an over 100% increasein measured and indicated resources since last April, from 52.9 million tonnes to107.2 million tonnes, containing 484,100 tonnes of nickel and 136,600 tonnes ofcopper.

* Sherritt InternationalCorp. expressed confidence that it canavert a restructuring despite its C$2.1 billion debt, versus just C$370 millioncash as of March, and low nickel prices, the Financial Post reported.

* The Glencore- and AngloAmerican Plc-owned Collahuasicopper mine in Chile and Teck ResourcesLtd. agreed to shareresources and infrastructure, Reuters reported.

* Malaysia SmeltingCorp. Bhd. posted its bestquarterly performance in two years in the first quarter with net profit of 24.9million Malaysian ringgit, The Star reported.The miner also said although tin prices had somewhat improved, market conditionsremained challenging.

* Experts surveyed by Chile's copper commission Cochilco projectedthe price of copper to averageUS$2.19 per pound this year, compared with the US$2.43 per pound estimated in theOctober 2015 survey, Economía y Negociosreported.

PRECIOUS METALS

* First MajesticSilver Corp.'s first quarter netloss widened to US$7.4 million from US$1.1 million posted in the samequarter of 2015, primarily due to a US$7.8 million deferred income tax expense.However, revenues during the period increased by 22% year on year to US$66.5 millionon the back of a 36% growth in silver equivalent ounces sold.

* SEMAFO Inc.is back in the black, posting attributable netincome of US$16.2 million in the first quarter, compared to a year-agoloss of US$8.1 million. Despite gold production falling 6% to 61,300 ounces, goldsales rose 4% on a yearly basis to 62,800 ounces of gold, generating revenue ofUS$74.6 million.

* Kinross GoldCorp. posted a first-quarter net loss attributable to shareholders ofUS$13.9 million, wideningfrom a loss of US$6.7 million reported a year ago. The dual-listed major attributedthe increased loss to a lower average realized gold price, which fell to US$1,179per ounce during the quarter, from US$1,218 per ounce a year earlier.

* CNMC GoldmineHoldings Ltd. posted a 121%jump in its first quarter net profit to US$5.6 million from US$2.5 millionin the same period of 2015, on the back of higher sales volumes and an all-time-lowall-in production cost of US$487 per ounce of fine gold. Attributable net profitin the period went up by 130.5% to about US$4.6 million, while revenues increasedby 7.1% to US$8.4 million.

* Mining Weekly reportedthat Ausenco wona A$91 million engineering, procurement and construction contract over 's Moose Riverconsolidated gold project in Nova Scotia.

* Australia and New Zealand Bank, or ANZ, said India's gold importscould reach a record highthis year, bolstered by widespread smuggling of the precious metal to avoid levies,Reuters reported. John Levin, ANZ's head of precious metals, estimated that about15% of India's gold imports this year will be smuggled into the country.

* The Ministry of Mining said there are notraces left of the cyanide spill on the rivers affected by the incident at 's gold mine in Argentina,Diario de Cuyo reported. The commentsby the ministry came after the release of a study, conducted between October 2015and November 2015 by UN agency UNOPS, which found sludge concentrations of cyanideand metals in the riverbed of river Potrerillos.

* Xtract ResourcesPlc said the total gold resource at the Manica project in Mozambique increasedby 36% to 17.3 million tonnes at 2.26 g/t of gold for 1.3 million ounces ofgold, upon the addition of the resource at the Fair Bride gold deposit.

* The government of Thailand has ordered Kingsgate Consolidated Ltd.'s operating subsidiary to operations at the gold mine and metallurgicalplant by the end of 2016 and start the rehabilitation process. The government claimsthat the environmental and health problems caused by Chatree outweigh its economicbenefit. According to Bangkok Post, AkaraResources warned that 1,000 workers would be joblessif its mining licenses in Phichit, Thailand are not renewed.

* The Sydney Morning Heraldwrotethat the closure of the Chatree mine was ordered as part of Thailand's move to shutdown the country's entire gold mining and exploration industry — with all miningto cease by the end of the year and government agencies to stop issuing and renewinglicenses. The project smelter will be allowed to operate until the end of this year.

* Genius PropertiesLtd. acquireda 100% interest in nine mineral exploration properties covering various mineralshowings in Nova Scotia from two arm's length prospectors associated with 21AlphaGold Resources.

BULK COMMODITIES

* Fitch Ratings downgradedVale SA and BHP Billiton Group joint venture Samarco Mineração SA's long-term foreign-currency and long-termlocal-currency issuer default ratings as well as its senior unsecured debt ratingsto CCC from BB-, based on the assumption that it will not secure the required licensesto restart operations by the end of the year and will run out of cash to supporttimely payments to creditors within the next five months. In addition, Fitch removedthe ratings from Negative Watch.

* U.S. Steel Corp.launched tender offersto purchase for cash up to a total of US$500 million aggregate principal amountof its outstanding 7.000% senior notes due 2018, 7.375% senior notes due 2020 and6.875% senior notes due 2021.

* Data compiled by Bloomberg showed that over half of all globalcoal assets are heldby companies either undergoing bankruptcy or lacking money to pay their interestbill, Bloomberg News reported.

* Marubeni Corp.'sprofit attributable to owners of the parent declinedto ¥62.26 billion for the year ended March 2016, down 41.0% from ¥105.60 billiona year ago, as the company incurred impairment losses mainly due to deterioratedresource prices. The company's energy and metals segment widened its attributableloss to ¥144.0 billion, from the loss of ¥30.7 billion in the previous fiscal year.

* South Africa's National Union of Mineworkers wants a buyerto take over at Exxaro Resources Ltd.'sArnot coal minein a bid to avoidthe job cuts slated at the mine by the end of July, after a coal supply contractwith Eskom expires. According to Bloomberg News, NUM branch secretary Mxolisi Hoboyisaid about 600 jobs cuts are likely to be implemented at the end of July, with theremaining 1,200 workers to be made redundant by 2020.

* State-owned PTIndonesia Asahan Aluminium Co, or Inalum, is looking to increase itsoutput to 500,000 tonnes per annum by 2020 and to 1 million tonnes per yearby 2025, from the current production level of 260,000 tonnes, as demand for aluminumis projected to more than double in nine years, Reuters reported citing Dante Sinaga,the head of Inalum's coal power station development project.

* K+S AG'srevenues for the first quarter slumped20% year over year to €1.10 billion due to deteriorating sales in thepotash and magnesium units, as well as lower average prices. EBITDA also slid 26%to €285 million while operating earnings fell by 31% to €218 million. Sales, meanwhile,totaled 1.69 million tons, down from 1.94 tons recorded a year earlier due to pre-purchasingof specialties in Europe in December 2015 and a slower seasonal start.

* In line with expectations, Mitsubishi Corp. swungto a net loss attributable to owners of the parent of ¥149.40 billionfor the year ended March 31, compared to a year-ago profit of ¥400.57 billion. Revenuesfell 9.7% to ¥6.926 trillion, resulting in pretax loss of ¥92.82 billion. Loss pershare was ¥93.68, compared to EPS of ¥245.83 a year ago. The Japanese trading housebooked an impairment charge of ¥426 billion, including ¥41 billion from the non-resourcesbusiness.

* Mitsui &Co. Ltd.'s mineral and metal resources segment swung to a loss attributable to shareholders of ¥162.5 billionin the fiscal year ended March 31, from a profit of ¥60.9 billion a year ago, amidlower iron ore prices. Meanwhile, the Mitsui group swung to a loss attributableto shareholders of ¥83.41 billion compared to a profit of ¥306.49 billion a yearago.

* Separately, Reuters wrote that Mitsui is planning to reduceits exposure to thermal coal investments and is considering cutting the equivalentannual output of its mine stakes to 9 million tonnes of the fossil fuel in threeyears from the 13.5 million tonnes the company posted in the year ended March 31.According to Mitsui President and CEO Tatsuo Yasunaga, the move comes as the climatepact signed in Paris last year continues to urge firms to reduce dependency on thermalcoal but the company will continue to invest in coking coal assets.

* Aluminum Corp.of China Ltd. plans to investin a light alloy materials project in China's Guangxi province, and plans to furtherinject capital of about 992 million Chinese yuan into Guangxi Hualei.

* Yanzhou CoalMining Co. Ltd. has entered into thermal coalsale contracts covering 7.2 million tonnes of thermal coal within China's Shandongprovince for the current year.

* POSCOunit Hume Coal has expressed disappointmentat the Land and Environment Court of New South Wales' decision to block land accessin the Australian state, noting that it has been exploring for coal on behalf ofthe state government and people of NSW since 2011. "Prior to commencing explorationin this region, Hume Coal was mindful of the setting in which we are operating,therefore much time and design was invested into producing a drilling program, whichhad little to no impact on the current land use," said Greig Duncan, projectdirector.

SPECIALTY

* The nuclear royal commission forecasts that uranium priceswill remainflat, with a recovery expected at the soonest in 2018, The Australian Financial Review reported.

* Paynes Find GoldLtd. is looking to enter the lithium market with the of a project in Austria. Thegold miner entered into a binding terms sheet to acquire 100% of European LithiumAT (Investments) Ltd., which owns 100% of ECM Lithium AT GmbH, a subsidiary entityof European Lithium Ltd.,and the Wolfsberg lithium project in Austria.

* Capricorn MetalsLtd. started the first stage of the company's asset sale process in Madagascar with the sale of its 1.5%net smelter royalty on Energizer ResourcesInc.'s Molographite deposit. The royalty was sold to a Canadian investment group for an immediatecash payment of C$300,000. A further payment of C$1.0 million in cash will be madeonce commercial production at Molo begins.

* Athabasca MineralsInc. temporarily suspendedoperations at the Susan Lake public pit and the corporate pits located within theWood Buffalo region in Alberta due to the ongoing wildfires in Canada. Currently,there is no time frame for the return of employees to operations.

* Alset Energy Corp. entered into a binding letter of intentwith Litio Mex SA de CVfor the rightto earn a 100% interest in 10 minerals concessions covering 16 known lithium,potassium and boron-rich salars and one mineral concession containing a Gypsum zonein Mexico by paying US$210,000.

* The maiden ore reserve for IMX Resources Ltd.'s Chilalo graphite project in Tanzania, based only on indicatedresources, was estimatedat 5.1 million tonnes grading 11.9% total graphitic carbon for 613,800 tonnes ofcontained graphite.

INDUSTRY NEWS

* The Western Australian Chamber of Minerals and Energy saidfurtherrevisions are delaying the passage of the state's mining legislation amendmentbill and that the adoption of the 26 findings and 18 recommendations on the billwould have negative implications on the resources sector, Mining Weekly reported.

* Australian potash explorer River Rock Energy Ltd. and China's King of Gold Group Co.Ltd. have backed out oftheir respective plans to list on the ASX via an initial public offering, with neitherexplorer revealing the reason behind the decision to drop their planned listings.

* Mining investments in Argentina wouldreach US$20 billion between 2016 and 2021 and generate 40,000 new jobs, addingto the current 90,000 direct and indirect employees in the industry, Télam reported,citing mining chamber CAEM.

* The Bolivian government has reverted522 of the 793 mining concessions inspected by authorities in Potosí, Oruro, LaPaz, Cochabamba and Chuquisaca departments since 2014, Página Siete reported.

The Daily Dose is updatedas of 7 a.m. New York time, and scans news sources published in Chinese, English,Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some externallinks may require a subscription.