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Rio's Q4'18 iron ore output slips; Treasury names 3 US execs to manage EN+ stake

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


Rio's Q4'18 iron ore output slips; Treasury names 3 US execs to manage EN+ stake

TOP NEWS

Rio Tinto's Q4'18 iron ore production, shipments slip YOY; copper output up 20%

Rio Tinto's fourth-quarter 2018 iron ore production and shipments slipped 1% and 3% year over year, respectively, to 86.6 million tonnes and 87.4 million tonnes. Mined copper output in the quarter surged 20% to 177,800 tonnes, primarily reflecting strong performance at the Escondida mine in Chile and increased production from Kennecott Utah Copper Corp. due largely to higher grades. In 2019, the mining giant expects its iron ore shipments from Pilbara at between 338 million and 350 million tonnes. The company expects limited disruption to Robe River lump and fines shipments due to a recent fire at the Cape Lambert port, which is reflected in the guidance.

Treasury names 3 US execs to manage EN+ shares given up by Deripaska

The U.S. Treasury Department named three Americans to oversee shares of En+ Group PLC that Russian billionaire Oleg Deripaska will relinquish as part of a deal to remove sanctions on the company, Bloomberg News reported. David Knower of Cerberus Capital Management; David Crane, senior operating executive at Pegasus Capital Advisors; and D.J. Baker, a corporate lawyer, were chosen to serve as trustees to oversee the shares. Deripaska controls United Co. Rusal PLC through his stake in EN+.

Severstal's Q4'18 steel output down, sales up QOQ

PAO Severstal's fourth-quarter 2018 hot metal output inched down 4% quarterly to 2.23 million tonnes due to short-term maintenance work. Crude steel output declined 4% to 2.94 Mt due to lower pig iron production and a seasonal output slowdown at the Balakovo mini mill. Consolidated steel products sales for the quarter increased 2% to 2.76 Mt from 2.71 Mt.

DIVERSIFIED

* Turquoise Hill Resources Ltd.'s Oyu Tolgoi mine in Mongolia exceeded full-year 2018 production guidance for copper and gold by 2.6% and 1.8%, respectively, at 159,100 tonnes and 285,000 ounces. The company was aiming to produce between 140,000 and 155,000 tonnes of copper in concentrates and between 240,000 and 280,000 ounces of gold in concentrates. Fourth-quarter 2018 copper production, however, slipped 8.4% year over year to 41,500 tonnes, while gold production jumped 234.3% to 117,000 ounces.

BASE METALS

* Trevali Mining Corp. produced 102.7 million pounds of zinc in the fourth quarter of 2018, compared to 104.8 million pounds of zinc the prior year, while full-year 2018 output reached 406.9 million pounds, against 225.1 million pounds in 2017. Full-year production at the Caribou zinc mine in New Brunswick totaled 72 million pounds of zinc, within the lowered guidance of between 70 million and 75 million pounds.

* Katanga Mining Ltd. entered into a management services agreement with Glencore International AG to better reflect the integrated nature of both parties' businesses and enhance existing controls. Under the deal, the Glencore PLC-controlled miner named Danny Callow CEO and director and Paul Smith CFO.

* Cash-strapped Nautilus Minerals Inc. secured a lifeline after receiving a US$500,000 loan from Deep Sea Mining Finance Ltd. under an existing structured credit facility of up to US$34 million. The seabed-mining hopeful recently said it needed to secure additional funds to continue operations.

* Gespeg Copper Resources Inc. signed a deal to buy the Montauban base and precious metals project in Quebec from DNA Canada Inc. in exchange for a convertible loan of about C$2.3 million.

* Operations at Mitsubishi Materials Corp.'s majority-owned Gresik copper smelter partially resumed, Fastmarkets MB wrote. An oxygen plant issue is preventing the smelter from returning to full operations.

PRECIOUS METALS

* Asanko Gold Inc.'s fourth-quarter 2018 gold output totaled 59,823 ounces, lifting full-year production to 223,152 ounces and exceeding its annual guidance of between 200,000 and 220,000 ounces.

* Russia's central bank became the world's fifth-largest holder of gold after buying 8.5 million troy ounces between January and November 2018, outpacing China, Reuters reported, citing data and industry sources. This comes as Russia's holdings in U.S. Treasury Securities fell after Washington imposed sanctions on Russian entities in April 2018. One reason Russia was betting on gold was because it could not be frozen or blacklisted, industry sources told the newswire.

* The Menominee Indian Tribe of Wisconsin asked the Seventh U.S. Circuit Court of Appeals to overturn a federal court's ruling that rejected the lawsuit against Aquila Resources Inc.'s Back Forty gold mine, the Associated Press reported. The original lawsuit filed by the tribe questioned a decision by the U.S. Environmental Protection Agency to allow Michigan to handle the permitting for the operation, which sits near the Menominee River and the Wisconsin state line.

* Ramelius Resources Ltd. increased its stake in Explaurum Ltd. to 79.2% as it progresses a cash-and-shares takeover that was declared unconditional. The offer's closing has been extended to Feb. 22.

* Canadian Silver Hunter Inc. said its nonbinding letter of intent to acquire privately held MariGrow Inc. automatically terminated in accordance with its terms.

* Nelson Resources Ltd. applied for new tenements E28/2873 and E28/2874 near its Socrates and Grindall gold projects in Western Australia. The explorer relinquished Woolshed Well tenements P37/8597, P37/8598, P37/8599 and P37/8600, saying that they are not expected to deliver any value.

* SSR Mining Inc. unit SGO Mining Inc. started a winter drilling program at Taiga Gold Corp.'s 34,000-hectare Fisher gold property in Saskatchewan. SSR is in the third year of an option to earn up to an 80% interest in the property by spending C$4.0 million on exploration and paying C$3.3 million in cash within four years.

* GBM Resources Ltd.'s resource estimate for its Mount Coolon gold project in Queensland, Australia, increased 66% to 963,000 ounces after including the JORC 2012-compliant resource estimates for the Twin Hills gold deposits.

* Renaissance Gold Inc. signed definitive earn-in agreements allowing Hochschild Mining PLC to earn up to a 70% interest in the former's gold-prospective Mars and Ferguson Mountain projects in Nevada.

BULK COMMODITIES

* PJSC Novolipetsk Steel's steel output in the fourth quarter of 2018 rose 1% year on year to 4.4 million tonnes. Sales in the period grew 6% to 4.6 Mt driven by higher demand for slabs and pig iron in the Russian steelmaker's export markets. The company's Belgian subsidiary, NLMK Clabecq SA, is halving the headcount at its plant near Ittre to 290 as part of restructuring plans to address overcapacity and a continuously tough trade environment The operation has recently been losing €50 million per year, despite investments of €131 million since 2010. Clabecq's management expects the plant to become profitable again by 2022.

* Yancoal Australia Ltd.'s attributable salable coal production in the fourth quarter of 2018 climbed 18% year over year to 8.4 million tonnes. Total attributable coal sales in the quarter improved 4% on a yearly basis to 10.1 million tonnes, including a 17% increase in thermal coal sales to 7.4 million tonnes, partially offset by a 19% decline in metallurgical coal sales to 2.7 million tonnes.

* Seeing a strong premium for higher-quality iron ore as a long-term market reality, Alderon Iron Ore Corp. will try to tap backers for funding to build the Kami iron ore project in Newfoundland and Labrador with estimated capital expenditure of US$900.7 million. "We're about to appoint a financial adviser and test the market again," Alderon President and CEO Tayfun Eldem said in an interview.

* Western Australia's sulfate of potash hopefuls looking to take advantage of the "quiet revolution" occurring in farms globally face a "deceptively simple" task to develop their projects but are at odds as to whether bores or trenches, or both, are more economic. Australian Potash Ltd. Exploration Manager Chris Shaw said in an interview that bore fields benefit both in terms of cost and longevity. However, Kalium Lakes Ltd. Corporate Affairs Manager Gareth Widger said having a mix of both bore field and trenches allows for the best of both worlds.

* Prairie Mining Ltd. said Poland's Supreme Administrative Court rejected Lubelski Wegiel Bogdanka SA's administrative complaints against Poland's Ministry of Environment over the latter's refusal of Bogdanka's 2013 application for a mining concession over the K-6-7 deposit within Prairie's Jan Karski mine.

* The State Bank of India is looking to sell 154.31 billion Indian rupees of loans related to Essar Steel India Ltd. on a 100% cash basis. Parties are required to submit expressions of interest by Jan. 18, and the bidding process is expected to start Jan. 30.

* Shougang Hierro-Peru SA will submit within the next five days the remediation plan requested by Peruvian environmental regulator OEFA to repair a leak of particulate material detected at its plant in Marcona in Peru's Ica region, Gestion reported.

* ArcelorMittal issued €750 million of 2.250% fixed-rate notes due 2024 as part of its €10 billion wholesale euro medium-term notes program. It will use the proceeds for general corporate purposes.

* A consortium led by state-owned African Exploration Mining and Finance Corp. will submit a bid to acquire Optimum Coal Holdings Ltd. and Optimum Coal Terminal Pty. Ltd., Mining Weekly reported. Preferred bidder Project Halo, also a South African consortium, submitted the winning bid for the Gupta family-linked companies in December 2018.

* Ironveld PLC expects to secure a long-term off-take agreement after a potential partner conducts a full kiln smelting test on samples from the Nonnenwerth high-purity iron, vanadium and titanium project in the Northern Limb of the Bushveld Complex in Limpopo Province, South Africa. The outcome of the test is expected in the next three weeks.

* Stanmore Coal Ltd. declared a fully franked interim dividend of 3 Australian cents per share, payable to shareholders April 30. The company will also conduct an on-market share buyback of up to 10% of its ordinary shares over 12 months.

* Turkish steel mills might be forced to reduce production further or shut down due to the European Commission's decision to extend steel import caps, sources told Reuters.

* Total U.S. coal production for the first full week of 2019 rose 13.9% year over year to 15.1 million tons from 13.2 million tons, according to data from the U.S. Energy Information Administration.

* The London Metal Exchange will launch seven new cash-settled futures contracts March 11, including hot-rolled coil steel and alumina, Reuters reported. Meanwhile, French international banking group BNP Paribas SA applied for category II membership in the exchange, Fastmarkets MB wrote.

* Korab Resources Ltd. is aiming to begin production at the Winchester magnesium carbonate project in Australia's Northern Territory in the second half.

SPECIALTY

* PJSC Alrosa fetched US$463 million from 32 international auctions in 2018 for special-size rough diamonds weighing over 10.8 carats. The Russian diamond miner is planning to hold 37 international auctions this year, with additional auctions to be held in Antwerp, Dubai, New York and Ramat Gan, Israel.

* Zambia's company registry reversed a decision to deprive Israeli diamond billionaire Lev Leviev of a 50% stake in the Gemcanton emerald mine, Bloomberg wrote. Wolle, a company owned by Abdoulaye Ndiaye, who built the Gemcanton mine, is engaged with Leviev's company, which claims Ndiaye owes it more than US$50 million.

* Hardey Resources Ltd. submitted a proposed remedial action to the ASX in response to the exchange's decision to delist the explorer after uncovering a series of questionable disclosures and a breach of listing rules related to the acquisition of the Nelly vanadium mine in Argentina as well as the purchase of six assets held by Vanadium Mining Pty. Ltd.

* Kodal Minerals PLC expects a mineral resource estimate update for the Bougouni lithium project in southern Mali by the end of February, after completing drilling programs in 2018 at the Sogola-Baoule and Boumou prospects.

INDUSTRY NEWS

* The Trump administration may be willing to dial back or even completely remove its crippling tariffs on China as the two countries work toward a trade deal ahead of a looming March 1 deadline, The Wall Street Journal reported. The goal is to advance trade talks and incentivize China to make concessions in a trade war that has rattled markets and begun to harm American companies, according to the report.

* A retired Army officer who was part of Belo Sun Mining Corp.'s advisory board in 2018 returned as the head of Brazil's National Indian Foundation, a government body seeking to protect the rights of indigenous peoples, Reuters reported. Franklimberg Ribeiro de Freitas was fired from the agency in April 2018 by the previous government amid pressure from farmers who described him as too sympathetic to the land rights of First Nations.

* The amount of capital available for private fund managers to invest totaled US$2.099 trillion as of the end of June 2018, up from US$1.779 trillion at year-end 2017, according to the latest data from Preqin Ltd.

* BlackRock Inc. Chairman and CEO Larry Fink is calling on corporations to step up and fill a leadership vacuum in society as "trust in multilateralism and official institutions is crumbling." Fink pressed CEOs to begin addressing broader societal concerns, ranging from the environment and retirement to gender and racial inequality at a time when "the global landscape is increasingly fragile."

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