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Alcoa swings to Q3 profit on higher aluminum prices, shipments

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


Alcoa swings to Q3 profit on higher aluminum prices, shipments

TOP NEWS

Alcoa swings to Q3 profit on higher aluminum prices, shipments

Alcoa Corp. swung to a net profit of US$113 million in the third quarter from a year-ago net loss of US$10 million, while revenue rose to US$2.96 billion from US$2.33 billion a year earlier. The results were driven primarily by improved pricing in the aluminum business segment and higher shipments of aluminum and bauxite, Alcoa noted.

Severstal's Q3 profits sink YOY to US$297M

PAO Severstal's third-quarter net profit fell 30.8% year over year to US$297 million. The company recorded a US$112 million income tax expense and a US$23 million foreign exchange loss.

Glencore to convert Rusal stake into En+ shares

Glencore Plc will convert its shareholding in United Co. Rusal Plc into shares of parent En+ Group Ltd., as part of the latter's US$1.5 billion IPO, the Financial Times reported. Glencore owns 8.75% of Rusal. The diversified commodity trader's shareholding in EN+ will be calculated after the IPO, based on EN+'s listing value and Rusal's share price. Glencore's CEO Ivan Glasenberg will be entitled to a seat on the EN+ board.

BASE METALS

* MMG Ltd. posted a 7% year-over-year increase in third-quarter copper production, to 114,472 tonnes, while copper cathode output dropped 16% to 33,416 tonnes. The company's Las Bambas copper mine in Peru was the main driver of the increase in production, contributing record output of 114,169 tonnes of copper in the quarter.

* Meanwhile, MMG entered into a zinc concentrate off-take deal with China Minmetals Corp. unit Minmetals North-Europe AB from the Dugald River zinc project in Queensland, Australia.

* Base metals have delivered a strong price performance so far this year, but the outlook on copper, nickel and zinc may go separate ways, according to speakers at the 121 Mining Investment in Hong Kong.

* Fitch Ratings affirmed PJSC Norilsk Nickel Co.'s long-term foreign-currency issuer default rating at BBB- with a stable outlook. The move reflects the rating agency's expectation that the miner will maintain a moderately leveraged financial profile over the rating horizon despite substantial dividend and CapEx payments.

* Amur Minerals Corp. expects exclusively open pit mining at its Kun-Manie nickel-copper sulfide project in Russia to generate EBITDA of US$1.61 billion, up 36% from the previous estimate of US$1.18 billion in March 2015. The four open pits will produce 77 million tonnes of ore averaging 0.73% nickel for 564,100 tonnes and 0.20% copper for 151,500 tonnes.

* Zeta Resources Ltd.'s Zeta Energy Pte. Ltd. subsidiary said its takeover offer for New Zealand Oil & Gas Ltd. has now lapsed.

PRECIOUS METALS

* Bank of Nova Scotia is selling its precious and base metals business, ScotiaMocatta, the Financial Times reported, citing "people in the market."

* Hochschild Mining Plc's attributable output in the third quarter increased to 10.3 million silver equivalent ounces, compared to 9.9 million silver equivalent ounces produced in the year-ago quarter. The record three-month production included 5.3 million ounces of silver and 67,234 ounces of gold, up from 5 million ounces of silver and 66,380 ounces of gold in the same quarter of 2016.

* McEwen Mining Inc. produced 19,051 ounces of gold and 749,749 ounces of silver in the third quarter, down from 24,281 gold ounces and 916,168 silver ounces produced in the year-ago corresponding quarter.

* Goldcorp Inc. completed the sale of its 21% minority interest in the San Nicolas copper-zinc project in Mexico to Teck Resources Ltd. for cash consideration of US$50 million.

* Black Dragon Gold Corp.'s new board agreed to a revised strategy for realizing the value of the company's Salave gold project in Spain. The company plans to identify potential partners for the development of Salave that can bring additional expertise and technology and make a capital contribution, as well as undertake a review of past exploration activity and associated data to identify new opportunities for expansion and grade increases of the current known resources.

* Globex Mining Enterprises Inc. repurchased a 1.5% net smelter royalty over its Francoeur/Arntfield gold property in Quebec from Monarques Gold Corp.

* Korab Resources Ltd acquired seven gold-prospective exploration license applications comprising a total of 210 square kilometers in Western Australia's East Pilbara and West Pilbara districts.

* Sula Iron & Gold Plc plans to look for interested partners for a joint venture or farm-out of the gold assets of the wider Ferensola project in Sierra Leone.

* Valor Resources Ltd. posted an 18% increase in indicated and inferred resources, in terms of tonnage, at its Berenguela property in southern Peru's Puno region. Berenguela hosts indicated and inferred resources totaling 25.5 million tonnes at 112.97 g/t of silver, 1.003% copper, 9.56% manganese and 0.35% zinc, using a cutoff grade of 0.50% copper equivalent.

* An updated resource estimate for Resolute Mining Ltd., the past-producing Bibiani property in Ghana, increased contained gold by 40% with the incorporation of data from phase-two drilling. Indicated and inferred resources at Babiani increased to 21.7 million tonnes grading 3.59 g/t gold for 2.5 million ounces, using a 2 g/t cutoff.

* Vital Metals Ltd. signed an exploration agreement with private Turkish company SUMMA, covering three prospective gold permits — Bouli, Tringui-3 and Keradet — in Niger held by a SUMMA unit.

* Metminco Ltd.'s feasibility study for its Miraflores gold project in Colombia pegged a posttax net present value of US$72.3 million, discounted at 8%, and a 25% internal rate of return. CapEx, excluding a 7.67% contingency, is expected at US$71.8 million, with an additional US$18.5 million for sustaining CapEx over an approximate 9.5-year life.

* Solidarity union reached a favorable three-year wage deal on behalf of its members at Sibanye Gold Ltd.'s Kroondal platinum operation in South Africa, Mining Weekly reported. The agreement is effective from July 1 and will be valid until June 30, 2020.

* Pan African Resources Plc concluded a one-year wage agreement with South Africa's National Union of Mineworkers. The agreement is in addition to the three-year wage agreement with the United Association of South Africa.

BULK COMMODITIES

* Agrium Inc. and Potash Corp. of Saskatchewan Inc. secured approval from India for their proposed merger. The Competition Commission of India approval will be conditioned on the parties' commitment to divest PotashCorp's minority shareholdings in Arab Potash Co. Plc, Israel Chemicals Ltd. and Sociedad Quimica y Minera de Chile SA within 18 months from the issuance of the clearance order.

* Rio Tinto is bracing to face class action lawsuits out of the U.S. after the Securities and Exchange Commission charged the miner, former CEO Tom Albanese and former CFO Guy Elliott with fraud for allegedly violating federal securities laws related to an unsuccessful acquisition of Mozambique coal assets, The Australian reported.

* Canadian steelmaker Stelco Holdings Inc.'s planned IPO is facing the headwinds of bogging North American auto sales and the uncertain impact of trade talks, Reuters reported. According to Thomson Reuters data, this will be the world's biggest steel IPO since 2010, if it goes through as planned.

* Kobe Steel Ltd. is looking to sell an approximately 70% stake in its Shinko Real Estate Co. unit, which has assets of roughly ¥90 billion, Bloomberg News reported, citing people familiar with the matter. The struggling Japanese steelmaker, which is embroiled in a data-falsification scandal, tapped Mizuho Securities Co. to advise it on the stake sale.

* Mongolian Mining Corp.'s run-of-mine coal production for the quarter that ended Sept. 30 jumped 284% year over year to 2.13 million tonnes.

* Gerdau SA could pocket about 2 billion Brazilian reais, or US$630.48 million, through the sale of its three rebar steel producing facilities in the U.S., Reuters reported, citing newspaper Valor Econômico. Two market sources told the paper that the Brazilian steelmaker is selling its Rancho Cucamonga, Sayreville and Knoxville units to U.S.-based Commercial Metals Co. by the end of the year.

* Ncondezi Energy Ltd. conditionally raised £750,000 before expenses through an oversubscribed placement of shares. The funds will be used to meet immediate financing needs until August 2018.

* One of China's largest aluminum producers, Xinfa Group, will have to reduce output by 381,900 tonnes at its smelter in Shandong province to comply with the government's directive of planned curtailments to ease air pollution, Reuters reported, citing a draft policy document. The production cut will start from Nov. 15 and remain in place until March 15, 2018.

* Indonesian miner PT Samindo Resources Tbk is considering acquiring more mines as it aims to expand its business lines, Kontan reported, citing a company official.

SPECIALTY

* Lithium is expected to remain in short supply as a result of the evolution in the electric vehicle industry and despite large amounts of new supply being scheduled to come online in the next five years, according to speakers at the 121 Mining Investment in Hong Kong. Adrian Griffin, managing director of Lithium Australia NL, warned that uncertainties on the supply side will continue to weigh on the sector.

* Karelian Diamond Resources Plc is looking for the source of the green diamond the company discovered in the Kuhmo area of Finland through an extensive work program designed to identify the kimberlite train.

* Activists in Niger are calling on President Mahamadou Issoufou to negotiate with Areva SA, after the French nuclear giant announced 200 job cuts and retrenching of 500 contractors at its Somair uranium mine in the West African nation to tackle a downturn in nuclear fuel prices, Bloomberg News reported.

* A scoping study on Plymouth Minerals Ltd.'s San Jose lithium-tin project in Spain's Extremadura region estimated a pretax net present value, discounted at 8%, of US$401 million, an internal rate of return of 28% and a payback period of 2.7 years.

* Battery Minerals Ltd.'s value engineering study for its Montepuez graphite project in Mozambique slashed CapEx to US$42.3 million, operating expenses to US$337 per tonne and the payback period to less than two years.

INDUSTRY NEWS

* The US$7.95 billion budgeted by 1,535 companies for global nonferrous exploration in 2017 is a 14% increase over 2016 and the first increase after four years of declining exploration spending, according to a research report from S&P Global Market Intelligence.

* A positive trend continues to be evident for the commodities market, with all of S&P Capital IQ's consensus price forecasts for 2017 reflecting higher values compared with 2016 average prices, as of Oct. 15, according to an S&P Global Market Intelligence report. There was a similar outlook in the previous month's forecast.

* The value of overseas assets held by China's centrally owned enterprises has exceeded 6 trillion Chinese yuan, with investments in over 185 countries and regions, Reuters reported, citing the state assets regulator. Meanwhile, assets held by centrally owned enterprises have exceeded 53 trillion yuan by now and are expected to reach 55 trillion yuan by year-end, nearly doubling over the past five years.

* South Africa's Chamber of Mines submitted an application to South Africa's High Court in Gauteng, seeking a judicial review and setting aside of the revised mining charter that was unveiled in mid-June. In the founding affidavit, the chamber said the charter continues to have a "disastrous effect" on the mining industry, investors and employees.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.