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US seeks to block Novelis' takeover of Aleris; Implats delays Rustenberg layoffs

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Insight Weekly: US stock performance; banks' M&A risk; COVID-19 vaccine makers' earnings

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Insight Weekly: LNG exports surge; investors unfazed by inflation; neobanks drive VC funding

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Essential Metals Mining Insights November 2021

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[Infographic]: 2021 World Exploration Trends


US seeks to block Novelis' takeover of Aleris; Implats delays Rustenberg layoffs

TOP NEWS

US seeks to block Novelis' US$2.6B takeover of Aleris

The U.S. Justice Department filed a lawsuit seeking to block Hindalco Industries Ltd. unit Novelis Inc.'s proposed US$2.6 billion takeover of Aleris Corp. due to competition concerns, particularly in the aluminum sheet used to make cars. Novelis said it is confident that the lawsuit will not prevent the deal to close by Jan. 21, 2020.

Implats delays planned layoffs at Rustenberg platinum operation

Impala Platinum Holdings Ltd. postponed a plan to cut 13,000 jobs at its Rustenburg operation in South Africa by 2021 due to operational improvements and higher revenue brought by higher prices, Reuters reported, citing two sources with direct knowledge of the matter.

Aluminium Bahrain eyeing US$1.5B to refinance loans

Aluminium Bahrain BSC is raising US$1.5 billion in bank debt to refinance loans it secured in 2016 for the Line 6 expansion project at its Knuff smelter, Reuters reported, citing two sources familiar with the matter. National Bank of Bahrain, Bank ABC and Gulf International Bank will underwrite the facility, which is now being syndicated to the wider bank market, the sources said.

BASE METALS

* WorleyParsons Ltd., one of the biggest contractors on Rio Tinto's Oyu Tolgoi copper expansion project in Mongolia, claimed that it was responsible for reducing the project's capital expenditures despite Rio Tinto earlier flagging an up to US$1.9 billion cost blowout, the Australian Financial Review reported.

* Mantos Copper SA secured US$250 million in financing from several sources to extend the life of its Mantos Blancos copper mine in Chile until 2035, Reuters reported, citing a company statement.

* Indonesia's coordinating minister overseeing mining Luhut Pandjaitan said that the country's ban on exports of nickel ore could boost the country's earnings from the metal five-fold in the next five years, Reuters reported. The nickel-related export earnings in 2024 "may exceed US$30 billion, including exports of lithium batteries," Pandjaitan said.

* Belmont Resources Inc. secured an option to earn up to a 75% interest in Pistol Bay Mining Inc.'s Fredart-Gerry Lake zinc-copper-silver-gold properties in Ontario.

* KAZ Minerals PLC Chairman Oleg Novachuk announced that the development of the 9.5-million-tonne Baimskaya copper project in Russia will use unmanned dump trucks and automated factories, with a control center in Moscow, Vedomosti reported.

* Toachi Mining Inc. shareholders approved Atico Mining Corp.'s proposed takeover that would form a midtier copper-gold explorer and producer focused on Latin America.

PRECIOUS METALS

* Construction on KEFI Minerals PLC's Tulu Kapi gold project will start in October amid a new report recommending upgraded security, but Executive Chairman Harry Anagnostaras-Adams says the situation in Ethiopia has "settled down," albeit with more petty crime. KEFI decided to start the two-year development phase with the Ethiopian government and ANS Mining Share Company, and according to Anagnostaras-Adams, by the time the project moves into full construction at the end of 2019, there will be "the equivalent of a high-security military compound" protecting the site's people and equipment.

* PJSC Polyus completed a 203,647-meter exploration drilling program at its Sukhoi Log gold deposit in Russia and expects results from fire assays by the end of the year. It plans another 5,400 meters of geotechnical drilling and 2,800 meters of hydrogeological drilling in 2019 and 30,000 meters of infill drilling in 2020. The company expects to provide a further update on the inferred and indicated mineral resource estimates and a maiden ore reserve for Sukhoi Log in the first half of 2020.

* Polyus remains committed to its goal of raising free float to 25% to 30% in the medium term, Reuters wrote citing CEO Pavel Grachev. The company remains on track for output of 2.8 million troy ounces of gold and capital expenditure of US$725 million in 2019.

* The London Metal Exchange's gold and silver futures are in doubt as lender Societe Generale, which helped launch the contracts in 2017, is expected to resign shortly as a market maker, Reuters reported, citing sources. Societe's departure means that there would be only two banks willing to offer tradeable prices, namely Goldman Sachs and Morgan Stanley, the report said.

* Pan American Silver Corp. said its silver reserves doubled while gold reserves tripled following its US$1.07 billion acquisition of Tahoe Resources Inc. in February. Pan American estimates its proven and probable mineral reserves to contain about 557 million ounces of silver and 5.1 million ounces of gold, as of June 30.

* Teranga Gold Corp. said its Wahgnion gold operation in Burkina Faso started processing ore in August, achieving first gold pour two months ahead of schedule. Wahgnion is expected to produce 30,000 ounces to 40,000 ounces of gold in 2019. The company is "fine tuning" the project in September, with throughput and grade expected to ramp up in the fourth quarter.

* Kingsgate Consolidated Ltd. said its claim against the government of Thailand under the Thailand-Australia Free Trade Agreement is more than the US$267 million stated by Thailand's lawyers on their firm's website. The company noted it remains open to a negotiated settlement of the claim.

* An updated pre-feasibility study on Rio2 Ltd.'s flagship Fenix gold project in Chile slashed the posttax net present value, discounted at 5%, to US$121 million, from US$409 million previously outlined in 2014.

* Valor Resources Ltd. signed a binding heads of agreement with Sulphide X Ltd. to acquire its subsidiary Bullfinch One, which holds the contractual rights to earn an interest in the Radio gold project that is owned by Radio Gold Pty Ltd., a subsidiary of Resources & Energy Group Ltd., in Western Australia.

* O3 Mining Inc. launched a 50,000-meter drill campaign on its gold properties in Val d’Or, Quebec.

* India's gold imports in August plummeted 73% year on year to 30 tonnes from 111.47 tonnes, driven by subdued buying as a result of higher prices and an increase in import duty, an unnamed government source told Reuters.

BULK COMMODITIES

* A Ukrainian tax probe found that ArcelorMittal owes authorities 9 billion hryvnia, roughly US$355 million, after allegedly underpaying land taxes and dealing with questionable companies, Reuters reported, citing Interfax. However, the state tax service disputed the comments made by one of its officials, Evgen Bambizov, on Interfax, saying that the issue is outside the scope of his authority. An audit into the company is not yet completed, the office said in the report.

* Separately, ArcelorMittal confirmed that it will continue operations at its Taranto steel plant in Italy after the Italian government adopted an amended law that restored the company's legal shield over the site.

* Experts believe Western Australia's iron ore production could return to higher grades than are currently being mined, which could be facilitated by a new research program being backed by Rio Tinto, BHP Group, Fortescue Metals Group Ltd. and Roy Hill Holdings Pty Ltd. S&P Global Market Intelligence has learned that a proposed research between the Commonwealth Scientific and Industrial Research Organisation, the iron ore miners and Curtin University will be conducted in Perth over two years.

* BHP Group agreed to buy 41 autonomous trucks from Komatsu for its new South Flank iron ore mine, part of its Area C operation in Western Australia, the Australian Financial Review reported. The deal may be worth up to A$700 million over a decade, including maintenance and support activities, the report said.

* Metallurgical Corp. of China Ltd. and Wenan Iron & Steel Co. Ltd. are leading a group of investors funding a 10-million-tonne-per-annum steel plant in Sarawak, Malaysia, The Star Online reported. Construction is expected to start in mid-2020, the report said.

* Andrey Kostin, head of Russian lender VTB, said the bank would discuss a debt restructuring request by coal and steel producer Mechel PAO with the company's other creditors Sberbank and Gazprombank, adding that "no one intends to harass Mechel," according to Reuters.

* Wesfarmers Ltd. tapped Macquarie Capital to handle the sale of its 3.8% stake in mining services provider Ausdrill Ltd., trading as Perenti Global, The Australian Financial Review reported. The company is offering 25.8 million shares at A$2.02 per share for a total of A$52.2 million.

* Thyssenkrupp AG kicked off the sale process for its prized elevators business, informing potential bidders that it is open to both minority and majority offers, Bloomberg News and Reuters reported, citing people familiar with the matter. Separately, thyssenkrupp will leave Germany's blue chip index DAX and settle with the midcap MDAX index, Reuters reported.

* Coal India Ltd. signed a deal to mine coking coal in Russia's Far East, part of an effort by India and Russia to boost their bilateral trade to US$30 billion annually by 2025, Reuters reported.

* Turkey is facing losses of up to US$3 billion stemming from Britain increasing import tariffs in sectors including steel, automotives and textiles in the event of a no-deal Brexit, Reuters reported, citing Trade Minister Ruhsar Pekcan.

* The U.S. Commerce Department imposed duties of up to 141% on Chinese structural steel and up to 31% on Mexican structural steel after determining that producers in both countries had dumped the material on the U.S. market at prices below fair market value, Reuters reported.

* Bowen Coking Coal Ltd. amended a purchase agreement with Rio Tinto Exploration Pty. Ltd., terminating the latter's right to buy back 51% of the Hillalong coking coal project, which is composed of EPC 2141, 1860 and 1824, in Queensland, Australia.

* The federal court in Australia dismissed an appeal by the Australian Competition & Consumer Commission against a federal court judgment over alleged bid rigging conduct involving Cascade Coal Pty Ltd., Paul and Moses Obeid and others. The appeal focused on whether parties associated with Obeid family members and Cascade were "in competition" at the time they withdrew a bid for the Mount Penny and Glendon Brook mining exploration licenses.

* A large majority of EU countries approved limits to quotas for 26 grades of steel at the average level of imports in 2015 to 2017 plus 5%, with further 5% hikes due in July and in July 2020, Reuters reported. Steel imports beyond these quotas are subject to a 25% duty, the report said.

SPECIALTY

* Moody's downgraded its corporate family rating on Tianqi Lithium Corp. to Ba3 from Ba2 citing high leverage and weak capital structure outlook until the next year.

* The Malaysian government defended its move to extend Lynas Corp. Ltd.'s operating license for its Gebeng rare earths processing plant, saying that the move showed that the country is open to investors and wanted to preserve 600 jobs, Reuters reported, citing the prime minister’s office.

* Almonty Industries Inc. completed the construction of a second tailings dam at the Panasqueira tungsten mine in Portugal, allowing the mine to process and store tailings for another 6 years at the rate of 800,000 tons per annum.

* Pilbara Minerals Ltd. said Contemporary Amperex Technology Co. Ltd., China's largest EV battery manufacturer, is acquiring an 8.5% stake in the lithium explorer after investing A$55.0 million.

* Koppar Resources Ltd. closed its acquisition of the Vulcan lithium brine project in Germany.

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