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South32 FY'16 output falls; Komatsu buying Joy Global in US$3.7B deal; HKEX delays clearing link with LME

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Essential Metals & Mining Insights - January 2021

Industry Top Trends 2021: Metals and Mining


South32 FY'16 output falls; Komatsu buying Joy Global in US$3.7B deal; HKEX delays clearing link with LME

TOP NEWS

Komatsubuying Joy Global in US$3.7B deal

Reuters wrote that mining equipment maker Komatsu Ltd. agreedto acquire smaller rival Joy Global Inc. for about US$3.7 billion,including debt. Separately, U.S. steelmaker Nucor Corp. will acquireJoy Global's steel plate mill in Longview, Texas, for about US$29 million.

 

Reporting its first full financial year of operationalresults, South32 Ltd.may have met or beaten its guidance for the majority of the company'soperations, but production was also down across most commodities. Themost noticeabledecline was in the production of manganese alloy, which fell by 46%to 224,000 tonnes for the 2016 financial year from 413,000 tonnes in the prioryear.

HKEX delaysclearing link with LME

Due to uncertainties created by Brexit, the Hong Kong StockExchange decided to hold offon its planned commodities clearing link with the London Metal Exchange,Reuters wrote citing Hong Kong Exchanges & Clearing CEO Charlies Li.

DIVERSIFIED

* FortescueMetals Group Ltd. is planning to part ways with its exploration rights for lithiumfollowing a strategic review of the company's holdings in Western Australia'sPilbara region, and will focus instead on its core business of iron ore.

* BHP BillitonGroup could face up to A$775 million in taxesand charges following an audit of the mining giant's Singapore marketinghub, The Australian reported. Thelooming payment appears to have increased from an earlier announced A$522million.

BASE METALS

* HindustanZinc Ltd. saw its profit after tax for the first quarter of the2017 financial year tumble47% year over year to 10.37 billion Indian rupees on productiondeclines and falling revenues.

* Jilin JienNickel Industry Co. Ltd. Chairman Wu Shu was by Chinese prosecutors onsuspicion of bribery. The case is still under investigation and has notaffected the company's operations.

* Chile's state mining company plans tosubmit a newmodernization plan for its Paipote copper smelter for board approval, Pulso reported. The proposal includesminor investments to comply with the new emission standard that comes intoforce in 2018, which makes mandatory the capture of 95% of total emissions.

* Codelco's debt grew247% between 2004 and 2015 to US$13.08 billion, according to officialfigures submitted to Congress recently. In the same period, the state minercontributed US$56 billion to the national Treasury, El Mercurio reported.

PRECIOUS METALS

* HochschildMining Plc raised its full-year silver equivalent productionguidance to 34 million ounces from 32 million ounces after posting an86% year-over-yearjump in second quarter production, to 9.5 million silver equivalentounces from 5.1 million ounces.

* NewmontMining Corp.'s net income attributable to shareholders in thesecond quarter slumped to US$23 million from the US$72 million booked inthe year-ago quarter. Attributable gold output rose 7% to about 1.3 millionounces, while attributable copper production declined 10% to 38,000 tonnes.

* EvolutionMining Ltd. booked record group gold output of 216,644 ounces in the Junequarter, at an all-in sustaining cost of A$1,117 per ounce. Group goldproduction for fiscal 2016 totaled a record 803,476 ounces, representing an 84%year-over-year increase, at an AISC of A$1,014 per ounce.

* The heads of Australia's Evolution Mining and believe the recent slip in gold price is just a and the precious metal will soonresume its upward trend since the U.K. voted to leave the European Union.However, Foster Stockbroking analysts disagree that the gold price willcontinue to rise post-Brexit, noting that the market realized that Brexit willnot completely derail the economy nor totally disrupt the European Union.

* HavilahResources Ltd. pouredA$2 million worth of gold in one day from its Portia mine in South Australia. The minepoured four gold bars totaling about 40 kilograms, with site analystsindicating the bars' purity at over 90%, MiningWeekly reported.

* StrategicMinerals Plc will receive US$675,000 after it accepteda settlement offer related to its claim pertaining to rail works for theCobre magnetitetailings mine in New Mexico.

* Matsa Resources Ltd. is the Lake Carey gold project inWestern Australia for a total consideration of A$1.8 million, excluding goodsand services tax.

* Russian-focused gold group its full-year production forecastby 10% after its first-half gold production increased 64% compared to the sameperiod of 2015 to 12,389 ounces, which is much more than initially expected.

* A group of armed men attackedthe La Indiamine owned by Agnico Eagle MinesLtd. in northern Mexico and injured a security guard beforestealing silver and gold, Reuters reported. The company did not provide anestimate of the value of the stolen metals.

* CondorResources Inc. acquired mineral rights over three new projects from thePeruvian government and has expanded its Pucamayo gold-silver project in the countrythrough the acquisition of a substantial land position adjoining the project.

* Probe MetalsInc. signed an agreement to sell three blocks of mining claims within its gold projectin Quebec to GFK ResourcesInc. for 3 million common shares and to terminate the optionagreement signed in December 2013, which gave GFK the right to earn a 100%interest in the Casa-Cameron project.

BULK COMMODITIES

* Data from the World Steel Association showed that globalcrude steel output roseby only 1.7% in June to 68.3 million tonnes from production in the samemonth of 2015 as increased Chinese output was offset by lower productionelsewhere, Reuters reported.

* The Oakland, Calif., City Council has its ban of a planned coalexport terminal with a final vote.

* PAOSeverstal's net profit jumped 125.2% to US$608 million in the second quarterfrom US$270 million in the first quarter, boosted by a foreign exchange gain ofUS$181 million and a 44.0% quarter-over-quarter increase in revenue to US$1.58billion. The company's net profit for the first half increased by 8.9% toUS$878 million compared to the corresponding period last year, despite a 19.8%decrease in revenue to US$2.68 billion.

* NorskHydro ASA's net income in the second quarter year over year with onlya 1% increase to 2.08 billion Norwegian kroner, or 95 øre per share, whilerevenues totaled 20.39 billion kroner in the quarter, dropping 9% from on ayearly basis.

* MongolianMining Corp.'s application for appointment of joint provisionalliquidators was accepted by the Grand Court of the Cayman Islands.

* The Korea Heraldreported that POSCOposted an 87.9%year-on-year jump in its second quarter net income to 220.54 billion SouthKorean won. However, net income was down 34.8% from the first quarter.

* According to TheGuardian, U.K. new business secretary, Greg Clark, hasmet with leaders of TataSteel Ltd.'s U.K. business and trade unions at the Port Talbot in abid to reassure the parties that the British government remains committed tosolving the crisis faced by the country's steel industry.

* Meanwhile, Reuters reported that Tata Steel is looking to doubleworkforce productivity at its Indian operations in the next five years. Asenior company official said among the measures to be implemented will be jobcuts through a voluntary retirement scheme and a lower annual recruitment plan.

* After complaints by ArcelorMittal Brasil SA, Companhia Siderúrgica Nacional and , Brazil's foreign tradedepartment Secex opened an antidumpinginvestigation into steel wire imported from China and Russia, Reutersreported. According to Secex, the probe involves exports to Brazil between 2013and the end of 2015.

* AveniraLtd.'s Senegalese unit Gadde Bissik Phosphates Operations SUARLentered into three-year offtakeagreements, in which buyers will initially purchase between 240,000tonnes and 360,000 tonnes per annum of rock phosphate from the project.

* Russia's Federal Anti-monopoly Service is investigatingthe unjustified rise in prices for rebar by Severstal, and , which are suspected ofabusing their dominant market position, Vedomostireported.

* A proposed law to ban upstream tailings dams, such as theone used at the Samarco iron ore mine, couldbe approved by Brazil's Minas Gerais state this year, Reuters wrote, citingAnderson Silva de Aguilar, a state environmental official. The official alsonoted that the mine would not be restarting this year and may not begin in 2017either.

* SiriusMinerals Plc said it received government approval for the harbor facilities atTeesside for its York polyhalite project in the U. K.

* Data provided by the U.S. Mine Safety and HealthAdministration indicates that Arch Coal Inc.'s Black Thunder mine in Wyoming producedonly 13.7 million tons in the second quarter 2016, the since the last quarter of1999 when the mine produced around 13.2 million tons.

SPECIALTY

* Uranium miner Paladin Energy Ltd. signed terms sheets for a to a nuclearpower participant of a 24% stake in the Langer Heinrich mine in Namibia and the sale toMGT Resources Ltd. ofup to a 75% interest in Manyingee in Western Australia. The stake sales couldraise over US$200 million.

* SayonaMining Ltd. will develop the Authier lithium project in a staged approach aftercompleting the project's acquisition for C$4 million.

* Following due diligence, decided towithdraw from itsacquisition of Shaw River Lithium Pty. Ltd., which holds 13 prospecting licenseapplications in Western Australia's Pilbara region.

* OrocobreLtd. doesnot expect to reach nameplate capacity at its lithium facility inArgentina until November as it makes modifications to the site's purificationcircuit, Industrial Minerals wrote.

INDUSTRY

* A recently released U.N.-backed report said the productionvolume of primary materials needed from the earth willalmost triple to 180 billion tonnes per year by 2050 as the world continuesto provide housing, food, energy, water and mobility, which require iron, steeland energy, among other resources. According to Reuters, the report warned ofincreased extraction's negative impacts including soil erosion and greater amountsof waste and pollution.

* Mining companies selling off good assets at the bottom ofthe cycle are putting their future growth at risk, Brian Beamish, chairman of , said. Speaking during aninterview with SNL Metals & Mining, Beamish said these miners were alsodoing their shareholders a disservice by hiving off quality assets atknock-down prices.

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.