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Newcrest FY'18 profit down YOY, outlines Cadia expansion 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


Newcrest FY'18 profit down YOY, outlines Cadia expansion plans

TOP NEWS

Newcrest FY'18 profit down YOY, outlines Cadia expansion plans

ASX-listed gold producer Newcrest Mining Ltd.'s net profit for fiscal 2018 fell to US$202 million, or 26.2 U.S. cents per share, from US$308 million, or 40.0 cents per share booked a year ago, due to US$257 million in exceptional items, mainly comprising a US$188 million asset impairment at its Telfer mine in Western Australia, and a US$72 million write-down of property, plant and equipment at the Namosi joint venture in Fiji. Meanwhile, a pre-feasibility study to expand its Cadia mine in New South Wales, Australia, estimated total CapEx of US$598 million, presenting an internal rate of return of 21% with payback in 8 years for a net present value of US$887 million, with the economics calculated at a 5% discount.

Chinese producers, traders rush to buy copper ahead of tariffs

Copper producers and traders in China are on a buying spree, acquiring refined metal ahead of hefty import tariffs that take effect Aug. 23, Reuters reported. The sudden spike in the red metal's prices was also partly due to tighter supply of scrap copper, with Beijing reinforcing its campaign against foreign waste. The scramble has seen physical copper premiums surge to the most since November 2016, according to the newswire.

MMG downbeat on talks over DRC's 'super profits' tax

MMG Ltd. said it was in talks with the government of the Democratic Republic of the Congo over the so-called 50% superprofits tax, which was part of a new mining code signed into law in March. However, CEO Geoffrey Gao conceded that it may be difficult for the company to avoid a windfall tax of 30%.

DIVERSIFIED

* Russian government ministries believe that a proposed windfall tax levied on metals, mining and chemical companies was inappropriate as company debt levels had to be considered, Reuters reported, citing Industry Minister Denis Manturov. The proposed tax, which would have affected major mining companies in Russia including PJSC Alrosa and PJSC Norilsk Nickel Co., looked to raise as much as 500 billion Russian rubles.

* Blackstone Resources AG signed a memorandum of understanding and cooperation with a Swiss-Colombian mining company to work together on developing certain mining assets and a commodity trading business outside Colombia. Blackstone said the Swiss-Colombian firm has all the necessary licenses to export a multitude of mineral resources.

BASE METALS

* Yunnan Chihong Zinc and Germanium Co. Ltd.'s net profit in the first half rose 34.3% year over year to 731.7 million Chinese yuan, helped by zinc price increases. Refined lead and zinc production during the period saw yearly improvement of 9.21% to 249,100 tonnes.

* Black Mountain Metals LLC withdrew a takeover offer to acquire Poseidon Nickel Ltd. at 6 Australian cents per share, as the latter intends to proceed with a capital raising. However, Black Mountain Metals has been granted due diligence access to the ASX-listed company.

* Antofagasta PLC said it was selling its 29.25% stake in Parque Eolico El Arrayan wind farm, which provides electricity to its Los Pelambres copper mine in Chile, for US$28 million. CEO Ivan Arriagada said the sale was consistent with the company's strategy of consolidating its investments into its mining operations.

* Aston Bay Holdings Ltd. agreed to acquire privately held Jack's Fork Exploration Inc. in an all-share deal that will see Donald Taylor, president of the target company, join the Canadian explorer as a technical adviser. Taylor was the COO of Arizona Mining Inc., which was recently taken over by South32 Ltd. in a US$1.3 billion deal for the remaining 83% of Arizona Mining it did not already own.

* Inca Minerals Ltd. said South32 Ltd. exercised its exclusive option to earn up to a 70% interest in the Greater Riqueza silver-zinc-lead project in Peru.

* Teck Resources Ltd. was forced to partially suspend its Trail zinc-lead smelting and refining operations in British Columbia due to smoke from a forest fire, Mining.com reported. The Linde plant, which provides oxygen to Trail, is shut down due to poor air quality in the area.

* Ivanhoe Mines Ltd. said it is not aware of any company-specific reason behind the 20% decline of its shares since the end of July. Ivanhoe's shares have fallen from C$2.59 apiece on July 31 to C$2.03 apiece at the close of market on Aug. 20.

PRECIOUS METALS

* Proxy advisers Institutional Shareholder Services Inc. and Glass Lewis & Co. LLC recommended that Dalradian Resources Inc. shareholders should vote in favor of the offer by Orion Mine Finance to acquire all of the Canada-listed gold explorer's issued share capital at C$1.47 per share, valuing the company at about C$537 million.

* A feasibility study for Orca Gold Inc.'s Block 14 gold project in Sudan is on track for completion in November.

* South Africa's National Union of Mineworkers, or NUM, declared a dispute after wage negotiations with Minerals Council South Africa, which represents Sibanye Gold Ltd., Harmony Gold Mining Co. Ltd., AngloGold Ashanti Ltd. and Village Main Reef Ltd., ended in a deadlock, Reuters reported. A strike looms should the mediation commission fail to break the impasse. NUM was one of the four unions that recently rejected the offers of the gold producers.

* Zinc of Ireland NL completed its farm-out of a 75% stake in the Leonora gold project in Western Australia. The company, which will retain a 25% interest in the project, received A$490,000 and earned 1 million shares of Kingwest Resources Ltd.valued at A$200,000.

* Lumina Gold Corp. received shareholder approval for the spinout of all its concessions and properties, excluding the Cangrejos gold-copper project in Ecuador, into Luminex Resources Corp. Under the arrangement, Lumina shareholders will earn Luminex shares by way of a share exchange, with each existing Lumina share exchanged for 1 new Lumina share and 0.15 of a Luminex share.

* Spectrum Rare Earths Ltd. will no longer proceed with an option to acquire the Washington gold project in California.

* Two miners died of suffocation in a gold mine in Colombia's Antioquia department, Mining.com reported.

BULK COMMODITIES

* Lawyers for the Italian government did not find any grounds to nullify ArcelorMittal's acquisition of troubled steelmaker Ilva International SpA, ruling out any major flaws with the tender process, Reuters reported, citing two sources familiar with the matter. The sources added that the government may still void the deal in the public interest.

* A BHP Billiton Group spokesman said the Samarco iron ore mine in Brazil is unlikely to restart operations in 2019 even after receiving all the required licenses, confirming recent remarks made by Bryan Quinn, another company official, in an interview with Valor Economico, Reuters wrote. Quinn, an executive in charge of the mining major's mineral joint ventures, separately told Reuters that a restart hinges on an agreement with prosecutors about the construction of a new tailing dam system.

* Fortescue Metals Group Ltd. General Manager Iron Ore Projects Anthony Kirke says another contractor boom is looming for maintaining the specialized equipment that enable majors to drive automation in mines. Kirke also told the Pilbara 2018 conference in Perth that the company is looking to fabricate most of its US$1.28 billion Eliwana plant in Australia.

* Mechel PAO's second-quarter net profit dropped 57% quarter on quarter to 1.40 billion Russian rubles, with mining segment revenue from external customers in the period up 13% to 25.68 billion rubles. Run-of-mine coal output fell 5% from the previous quarter to 4.7 million tonnes, with pig iron and steel production down 4% and 6% to 943,000 tonnes and 995,000 tonnes, respectively.

* China Coal Energy Co. Ltd. saw its net profit attributable to shareholders rise 67.5% year over year to 2.76 billion Chinese yuan in the first half, helped by cost controls and improved productivity.

* Some Chinese coal traders handling imports of the commodity from U.S. suppliers began sourcing future supplies locally, as the last shipments before new tariffs on coal imports are levied are arriving at Chinese ports, Reuters reported.

* The World Steel Association is projecting an increase in steel demand to 1.61 billion tons this year and to a record-high 1.62 billion tons in 2019, driven by robust manufacturing and construction activity in India and Southeast Asia, the Nikkei Asian Review reported.

* Cokal Ltd.'s 60%-owned PT Bumi Barito Mineral signed a deal to supply PCI coal from its BBM project in Indonesia to PT Krakatau Steel (Persero) Tbk. unit Krakatau National Resources.

* Edenville Energy PLC signed a two-year deal to supply 4,000 tonnes of coal per month to an East African industrial group.

* Andromeda Metals Ltd. increased measured, indicated and inferred resources at its Carey's Well deposit, part of the Poochera kaolin project in South Australia, to 23.9 million tonnes of kaolinized granite, expected to yield 12.7 million tonnes of bright white kaolin product based on an average grade of 53.1%.

SPECIALTY

* Ferroglobe PLC posted an attributable net profit of US$67.4 million in the second quarter, a massive jump from US$2.9 million in the year-ago period, thanks to strong demand from North America and Europe, and stable prices of its silicon and manganese-based specialty alloy products. The company also declared an interim dividend of 6 cents per share. Separately, Ferroglobe's board authorized the repurchase of up to US$20 million of its shares in the period ending Dec. 31, as it believes that Ferroglobe's recently prevailing share prices do not reflect the company's long-term intrinsic value.

* BMG Resources Ltd. signed a binding and exclusive agreement with Lithium Chile SpA to develop three lithium brine projects in Chile. The three projects — Salar West, Pajonales and Natalie — comprise more than 12,000 hectares in the Salar de Atacama.

* Renascor Resources Ltd. reached an access rights deal with the Siviour family, who own the property hosting the Siviour graphite project in South Australia, to be able to conduct drilling, collect bulk samples and undertake other work within the project area to facilitate the completion of a definitive feasibility study.

* Golden Deeps Ltd. obtained data from historical exploration conducted at the Abenab vanadium-lead-zinc mine in Namibia from AVZ Minerals Ltd., which will be used to restate the existing JORC Code 2004-compliant resource estimate to a JORC Code 2012-compliant estimate.

* Volt Resources Ltd. subsidiary Volt Graphite Tanzania signed a cooperation deal with Haida Graphite for the exchange of relevant information and to conduct testing on graphite product samples, in which both parties contemplate a potential off-take from Volt's Bunyu project.

* Hipo Resources Ltd. entered into an agreement with 1620 Capital, where the latter will provide technical and exploration management services for its operations in the Democratic Republic of the Congo, including the Kamola lithium project.

* Mineral Resources Ltd. updated its power supply deal with Contract Power Australia Pty Ltd., extending the contract's value to A$30 million and resulting in the addition of 17 MW of temporary power, Australian Mining reported.

* Uranium prices could rise over the next few years due to supply uncertainty, according to a forecast by brokerage firm Raymond James, as reported by Northern Miner. It said that recent production cuts, lack of production in consuming regions, new sources of demand and unknown political policies could put uranium supply in doubt, with the firm's incentive price trending upward of US$50 per pound.

INDUSTRY NEWS

* Arnoud Baluizen, BHP's head of marketing and supplies, said protectionist measures will result in higher prices for U.S. citizens as it would add to inflationary pressures, Reuters reported.

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