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Kumba Iron H1'16 profit rises; Grupo México posts drop in Q2 profit; Fitch sees Russian steel majors' EBITDA falling

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Kumba Iron H1'16 profit rises; Grupo México posts drop in Q2 profit; Fitch sees Russian steel majors' EBITDA falling

TOP NEWS

Anglo AmericanPlc appointed Themba Mkhwanazi as CEO of following NormanMbazima's decision to step down. July Ndlovu will replace Mkhwanazi as CEO ofAnglo American's coal business in South Africa. Kumba Iron Ore's net profitattributable to shareholders increasedto 2.97 billion rand in the first half, compared to 2.51 billion rand a yearago, despite a drop in revenue to 17.57 billion rand, from 19.95 billion rand.

 

Grupo MéxicoSAB de CV's second-quarter net profit year over year to US$350.3million due to a decline in metal prices and a 19% depreciation of the Mexicanpeso. Copper production rose 22.7% to 266,071 tons after starting new projectsat the Buenavista mine in Mexico.

Fitch expects MMK,Severstal, Novolipetsk Steel to post double-digit falls in 2016 EBITDA

First Ratings expects OJSC Magnitogorsk Iron & Steel Works, and to postdouble-digit fall in their 2016 EBITDA as Fitch sees Russian domestic steelconsumption declining by 5% in the year and domestic prices to stay underpressure, while capacity rates remain high.

DIVERSIFIED

* According to Reuters, three of the top five miningcompanies globally will have to boosttheir asset sales in the second half to meet their disposal targets, whichtotal about US$14 billion, as commodity prices are expected to fall in thesecond half of the year. The newswire said Glencore Plc, Anglo American Plc and have only raised US$5.4billion from asset sales so far.

* Canaccord Genuity analyst Dalton Baretto upgradedTeck Resources Ltd.to hold from sell and upgraded First Quantum Minerals Ltd. to buy from hold, tellingclients that the long-term demand fundamentals on the Canadian base metalssector remain positive, the FinancialPost reported.

BASE METALS

* Union workers at Anglo American Plc's flagship copper mine inChile rejectedthe formal proposal made by the company as part of the collective bargainingnegotiations. Anglo had offered an end-of-conflict bonus of 8 million Chileanpesos in four years, and a rise of 85,000 pesos in wages, daily El Mercurio reported.

* HorizonteMinerals Plc was awardedthree new concessions, totaling 3,142 hectares, adjacent to its recentlyacquired Glencore Araguaia project, part of its Araguaia nickel project in Brazil. The companyfiled applications for three additional licenses totaling 5,998 hectares.

* TNGLtd. is revisiting its previously planned spinoff of its basemetals projects in Australia's Northern Territory, and will soon convene ashareholder meeting to re-approve the demerger.

* Grupo México subsidiary Southern Copper Corp.'s second-quarter net incomedropped 24.7% yearover year to US$221.9 million despite an increase in copper production. Thecompany's copper mine output in the quarter increased by 26.1% to 225,842 tons,on the back of a 78% increase in production at the Buenavista mine in Mexico.

* DundeePrecious Metals Inc. said a regional power outage the refractory lining ofthe Ausmelt furnace at the company's Tsumeb copper smelter in Namibia. Repairs are expectedto take about three weeks and are expected to reduce 2016 concentrate throughputby approximately 20,000 tonnes.

* Copper concentrate trader 'spartner in the Philippines signed an ore supply agreement with a group of small scaleproducers for up to 20,000 tonnes per annum.

* Alba MineralResources Plc said its base metal and gold prospecting license inCounty Limerick, Ireland, has been renewedfor an additional two years.

* Moody's said that Vedanta Ltd.'s revised merger terms with have noimmediate impact on VedantaResources Plc's B2 corporate family rating, Caa1 senior unsecurednotes rating and negative outlook. However, the successful execution of themerger, to the extent that it leads to deleveraging, will be credit positivefor Vedanta Resources.

* Recently established German firm Metalprodex GmbH plansto start an online metals-trading platform in September for base metalssales and purchases for instant physical delivery, Reuters reported, citingMetalprodex Managing Director Janko Linhart.

PRECIOUS METALS

* NewcrestMining Ltd. is expected to announce a dividendof 5 Australian cents in August, the company's first since February 2013, asits gearing ratio fell to 24%, TheAustralian Financial Review reported. The company previously said it willonly declare a dividend at a gearing ratio of less than 25%.

* KlondexMines Ltd. agreed toacquire the Hollister gold mine and the Esmeralda gold mine and oremilling complex in Nevada from Waterton Nevada Splitter LLC. Klondex will alsolaunch a bought-deal placement of 20 million subscription receipts to raiseC$100 million.

* Hecla MiningCo. withdrewits takeover bid for Dolly VardenSilver Corp. after the securities commissions of British Columbiaand Ontario deemed that Hecla's unsolicited bid was an insider bid, meaning itshould obtain and disseminate an independent formal valuation. The commissionsalso denied Hecla'srequest to prevent Dolly Varden from finalizing a previously announced privateplacement.

* NorthernStar Resources Ltd.'s full-year 2016 net profit year over year to A$151.4million on the back of strong gold sales, which totaled 561,153 ounces at anall-in sustaining cost of A$1,041 per ounce. The company booked 611,288 ouncesof gold production for the financial year.

* RameliusResources Ltd. received commitments for a A$25 million share placement to raisefunds for the development of its Western Australian gold projects.

* McEwenMining Inc. produced 39,555 gold equivalent ounces in the secondquarter and is ontrack to produce 144,000 gold equivalent ounces in 2016.

* AlicantoMinerals Ltd. is acquiring from Sheik R Minerals Inc. the Ianna gold project, which is located less than25 kilometers from the company's flagship Arakaka gold project in northwestGuyana.

BULK COMMODITIES

* UBS Group AG said iron ore prices may fallnext year as its recent price rally has led to resumption of mine operations inBrazil, West Africa, Australia and China, adding to the metal's global supply,Bloomberg News wrote.

* OutokumpuOyj narrowedits net loss in the second quarter to €20 million from €41 million in the firstquarter and €62 million booked in the second quarter of 2015.

* CONSOLEnergy Inc. plans to divest itself of its Miller Creek and Fola mines in West Virginia,the last two coal mines the company held in central Appalachia, by payinganother producer US$44 million to get the properties off its hands.

* ChinaShenhua Energy Co. Ltd. produced 139.7 million tonnes of coal in the first half,compared to 139.4 million tonnes posted a year ago. Coal sales rose 4.8% yearover year to 186.3 million tonnes, from 177.8 million tonnes.

* IsraelChemicals Ltd. signed several contracts to supplya total of 700,000 tonnes of potash to Chinese customers, with provisions foradditional purchases. The contracts are for delivery this year at prices thatare in line with recent contract prices with China.

* Wuhan Iron& Steel (Group) Corp. posted a of 703 million Chinese yuan inthe first half of this year. In comparison, listed unit bookeda loss of 7.5 billion yuan for full year 2015, The Beijing News reported. The steelmaker laid off 3,100 workers inthe first half, and intends to cut another 6,000 to 7,000 jobs by next year.The move is believed to pave the way for its merger with ,which has already announced plans to slash capacity by 9.2 million tonnes.

* Despite record salt segment operating earnings, 's net earnings in the second quarter to US$6.3 million from theUS$13.2 million posted a year ago, as a result of continued mild winter weatherand agricultural market weakness.

* HarvestMinerals Ltd. completedan independent JORC compliant resource estimate for the Maximus target at theArapuafertilizer project in Brazil, of 883,000 tonnes at 4.21% K2O and 3.53% P2O5, ata 3.5% K2O cutoff.

* China phasedout more than 13 million tonnes of steel capacity in the first half of thisyear, completing 30% of the annual target of 45 million tonnes, the 21st Century Business Herald wrote,citing a senior official of the Ministry of Industry and InformationTechnology. The country plans to eliminate 140 million tonnes of steel capacitywithin five years.

* Meanwhile, Xinhua News Agency reported that China's Hebeiprovince is also planning to curbovercapacity this year, with iron production capacity to be reduced by17.26 million tonnes, steel-making capacity by 14.22 million tonnes and coalproduction capacity by 13.09 million tonnes.

* More than 20 Chinese miners are planningto apply to the country's commerce ministry for an anti-dumping investigationinto raw steelmaking materials imported from Australia and Brazil, Reutersreported, citing a statement from the Metallurgical Miners' Association ofChina.

SPECIALTY

* PJSCALROSA's first-half revenue under Russian Accounting Standardsrose to 146.9billion Russian rubles from 111.5 billion rubles in the same period of 2015,with net income jumping to 82.7 billion rubles from 37.5 billion rubles a yearago.

* CohibaMinerals Ltd. will acquire Charge Lithium Pty. Ltd., which controls fiveprojects within and around the Mount Cattlin, Pilgangoora and Greenbusheslithium provinces in Western Australia.

* 92 ResourcesCorp. signed a purchase agreement to a 100% interest in the Pontaxlithium property in Quebec.

* The Environment Secretary of Mendoza province in Argentinasaid production at the Sierra Pintada uranium project willnot be resumed because it infringes on legislation that bans the use ofcyanide in exploration, prospecting, development and industrialization of metalsin open-pit operations in the province, daily Diario Once reported.

* Chilean state minerals company signed atleast four confidentialitycontracts with potential partners to develop lithium deposits, saidExecutive Vice President Jaime Pérez de Arce, daily Pulso reported.

INDUSTRY NEWS

* According to TheWest Australian, BGCContracting Pty Ltd. won A$114million in work at two mining projects in Queensland — A$97 million fromIncitec Pivot Ltd.'sPhosphate Hillproject and A$17 million from ResoluteMining Ltd.'s Ravenswood gold project.

* The Argentine government of President Mauricio Macri plansto unlock more than 40 medium- and large-scale mining projects before theend of his four-year term. The projects for gold, silver, copper, potassium andlithium that are either delayed or suspended amount to US$20 billion, accordingto mining ministry figures. These include Glencore Plc's El Pachon copper mine in San Juan province andVale SA's potashproject in Mendoza province, daily LaNación reported.

* The Russian metals sector defied a sinking Russianeconomy by paying out72% of net earnings as dividends in 2015 — more than twice the average fornon-financial companies — as a weaker ruble made steelmakers' and miners'products more competitive, and more cash was available due to CapEx cuts andcompleted capital projects.

The Daily Dose isupdated as of 7 a.m. New York time, and scans news sources published inChinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai andUkrainian. Some external links may require a subscription.