trending Market Intelligence /marketintelligence/en/news-insights/trending/Lbgpm6HEoBU_vEU9N5x_Eg2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

BHP CEO eyes 70% value uplift; Fitch downgrades Samarco JV; K+S Q1 revenue slumps YOY to €1.10B

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


BHP CEO eyes 70% value uplift; Fitch downgrades Samarco JV; K+S Q1 revenue slumps YOY to €1.10B

TOP NEWS

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. In an investor conference, he indicated that he would not wait for a bouncein metal prices to expand the company; he also dampened speculation that BHP Billitonwould seek to take advantage of record-low mining valuations and a swell of distressedasset sales by buying new mines.

Fitch downgrades Samarco JV on licensing concerns

Fitch Ratings downgradedVale SA and joint ventureSamarco Mineração SA'slong-term foreign-currency and long-term local-currency issuer default ratings aswell as its senior unsecured debt ratings to CCC from BB-, based on the assumptionthat it will not secure the required licenses to restart operations by the end ofthe year and will run out of cash to support timely payments to creditors withinthe next five months. In addition, Fitch removed the ratings from Negative Watch.

K+S Q1 revenue slumps YOY to €1.10B

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.

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. In an investor conference, he indicated that hewould 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.

* Fitch Ratings downgradedVale SA and joint ventureSamarco Mineração SA'slong-term foreign-currency and long-term local-currency issuer default ratings aswell as its senior unsecured debt ratings to CCC from BB-, based on the assumptionthat it will not secure the required licenses to restart operations by the end ofthe year and will run out of cash to support timely payments to creditors withinthe next five months. In addition, Fitch removed the ratings from Negative Watch.

* Glencore Plcsaid record-low sector margins are settingthe scene for the next price upswing as current margins cannot sustain presentproduction levels over the medium term and structural deficits are returning, ledby zinc. Meanwhile, supply challenges for copper and zinc remain due to resourcequality and scarcity at current prices.

* Despite the recent recovery in iron ore prices, Vale remainseager to divest US$10 billion in assets by 2017 to slash debt, Reuters reported.The company, however, cut expected sales of noncore assets down to US$4 billionto US$5 billion this year from US$4 billion to US$5.5 billion estimated earlier.

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."

* Separately, Freeport CEO Richard Adkerson recognized the company's"currentneed" to resolve the extension of its mining contract over the copper mine in Indonesia,the Financial Times reported, noting themine's importance to Freeport, contributing US$3 billion, or 20% of the company's2015 revenues.

* Malaysia SmeltingCorp. Bhd. posted its best quarterly performance in two years in thefirst quarter with net profit of 24.94 million Malaysian ringgit, The Star reported.The miner also said that although tin prices had somewhat improved, market conditionsremained challenging.

* Caravel MineralsLtd. completed the saleof the Wynberg copperproject in Queensland, Australia, to CopperChemLtd. for A$400,000.

PRECIOUS METALS

* Kinross GoldCorp. posted a first-quarter netloss attributable to shareholders of US$13.9 million, widening froma loss of US$6.7 million reported a year ago. Revenue from metal sales rose slightlyto US$782.6 million from US$781.4 million in the year ago period, driven primarilyby an increase in gold equivalent ounces sold offset by a lower average realizedgold price. Kinross' attributable gold equivalent output in the quarter rose 9%year over year to 687,463 ounces mainly due to the acquisition of the mine and 50%of the Round Mountainmine that it did not already own.

* The government of Thailand has ordered Kingsgate Consolidated Ltd.'s operating subsidiary AkaraResources to shut down operationsat the Chatree goldmine and metallurgical plant by the end of 2016 and start the rehabilitation process.The government claims that the environmental and health problems caused by Chatreeoutweigh its economic benefit.

* Saracen MineralHoldings Ltd. declared commercialproduction at the Thunderboxgold project in Western Australia, effective April 1. The mine produced 7,026 ouncesof gold at all-in sustaining cost of A$1,107 per ounce in April.

* Mantle MiningCorp. Ltd. completed the acquisitionof a 95% stake in Morning Star GoldNL. The company now plans to restart work at the Norton gold project in Queensland and the gold project inVictoria, Australia.

* Golden Rim ResourcesLtd. is proposing to acquireHerencia Resources Plcsubsidiary Paguanta Resources (Chile)SA, which holds a 70% interest in the Paguanta project in northern Chile, for US$2.3million.

* Havilah ResourcesLtd. poured first goldfrom its Portiagold mine in South Australia on May 9, just over 13 months after the start of mining.

* Operations at AureusMining Inc.'s New Liberty gold mine in Liberia were temporarilysuspended due to problems with the detoxification circuit in the process plant,which together with recent heavy rainfall resulted in a small overflow of effluentinto the wetlands area within the mining lease.

* Brixton MetalsCorp. entered into an explorationagreement with Timiskaming First Nation with regard to the company'sLangis silver projectin Ontario and other Cobalt lands.

* 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.

* Renaissance GoldInc. securedpermits to drill the Wildcatgold project located within the Detroit mining district in Utah. The project isbeing funded by Troymet ExplorationCorp., which also acts as the operator.

BULK COMMODITIES

* 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.

* ThyssenKruppAG loweredits full-year adjusted EBIT forecast to total at least €1.4 billion as difficultmaterials markets continue to weigh on performance. The company posted a net lossof €9 million in the first half of its fiscal year, with its adjusted EBIT in theperiod dropping to €560 million from €722 million in the preceding year.

* 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 nonresourcesbusiness.

* Mitsui &Co. Ltd.'s mineral and metal resources segment swung to a loss attributable to shareholders of ¥162.5 billionin fiscal 2016, which ended March 31, from a profit of ¥60.9 billion a year ago.The segment's gross profit declined by ¥49.2 billion to ¥98.7 billion due to loweriron ore prices weighing on the company's Australian operations. Meanwhile, theMitsui group swung to a loss attributable to shareholders of ¥83.41 billion comparedto a profit of ¥306.49 billion, a year ago. Revenue dropped 11.9% year over yearto ¥4.760 trillion on the back of losses across all businesses, including the mineraland metal resources, iron and steel products, energy, chemicals and Americas segments.

* Norsk Hydro ASAand Vale SA have negotiations for the saleof Vale's 40% stake in Mineração Riodo Norte, or MRN — a bauxite producer in Brazil. In October 2015, thecompanies entered into a letter of intent for the potential transaction, but couldnot agree on commercial terms.

* Incitec PivotLtd. posted a net profit after tax of A$31.5 million for the half yearended March 31, after recording a A$105.6 million noncash impairment to the assetvalue of the Gibson Island fertilizer manufacturing plant in Queensland, Australia.The figure represents a 78.5% dropcompared to the year-ago net profit after tax, which totaled A$146.4 million.

* 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 expresseddisappointment at the Land and Environment Court of New South Wales' decisionto block land access in the Australian state, noting that it has been exploringfor coal on behalf of the state government and people of NSW since 2011. "Priorto commencing exploration in this region, Hume Coal was mindful of the setting inwhich we are operating, therefore much time and design was invested into producinga drilling program, which had little to no impact on the current land use,"said Greig Duncan, project director.

* United Co. RUSALPlc Deputy CEO Oleg Mukhamedshin said Chinese aluminum producers shouldmaintain discipline on production to "ensure gradual improvement in pricesand profitability," warning that restarting plants will undermine the rallyin metal prices over the past month, Reuters wrote.

* According to Mining Weekly,the Indian government has straightened up the paymentsystem for the auction of 16 coal blocks in the country in June. A governmentofficial said the upcoming auction will be the first time in 40 years that noncaptivecommercial coal mining will be opened to firms other than state-owned miners.

SPECIALTY

* Paladin EnergyLtd.'s gross profit for the three months ended March year over year to US$2.1 million.The company's Langer Heinrichmine in Namibia, meanwhile, produced about 1.3 million pounds of uranium, representinga 6% increase from 2015. In addition, sales revenue rose by 22% to US$20.8 millionin 2016, as a result of a 35% increase in sales volume, which was partially offsetby a 9% decrease in the realized sales price.

* 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.

* Lithium AustraliaNL has decided to divestfive significant graphite projects in Western Australia as part of its strategyto build an initial portfolio of raw materials for emerging battery technologies.The returns are intended to be distributed directly to the company shareholders.

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