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Australian union votes against Alcoa's proposed labor deal; strike continues

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


Australian union votes against Alcoa's proposed labor deal; strike continues

TOP NEWS

Australian union votes against Alcoa's proposed labor deal; strike continues

The Australian Workers' Union rejected the enterprise bargaining agreement from Alcoa Corp., and a strike will continue at its Australian operations. Alcoa said the industrial action impacted alumina production at its Western Australian refineries by about 15,000 tonnes in August, out of the about 9 million tonnes of annual production. The company said it has contingency plans to continue operations during the strike, and it invited the union to present an alternative proposal.

Operations suspended at Bushveld's Vametco mine due to strike

Bushveld Minerals Ltd. said operations have been temporarily suspended at its Vametco vanadium mine in South Africa since Sept. 5 due to an unprotected strike. The industrial action is related to legacy issues and compensation structures prior to the company's takeover of the mine, it said. Bushveld and union representatives agreed to negotiate an employee share-ownership plan next week.

Lundin Mining says no plan to amend takeover offer for Nevsun Resources

Responding to Zijin Mining Group Co. Ltd.'s recent C$6.00-per-share, all-cash takeover bid for Nevsun Resources Ltd., Lundin Mining Corp. said it will not amend its C$1.4 billion takeover offer for Nevsun. In early August, Nevsun rejected the hostile takeover offer from Lundin, saying the C$4.75-per-share cash offer "fails to recognize the fundamental and strategic value" of its assets, including the Timok copper project in Serbia and the Bisha zinc mine in Eritrea. Shares in Zijin Mining fell by as much as 4.6% in Sept. 6 trading on concerns that it may be paying too much to acquire Nevsun in the C$1.86 billion deal, the South China Morning Post reported.

DIVERSIFIED

* African Rainbow Minerals Ltd.'s attributable profit for the year surged to 4.75 billion South African rand, from 1.37 billion rand a year ago. Revenue climbed to 9.60 billion rand, from 9.02 billion rand in the prior year. The earnings include a net value gain of 977 million rand on the restructuring of the ARM Coal debt in late June. The year-ago results also included attributable impairments of the Nkomati mine and Modikwa mine assets of 711 million rand and 734 million rand after tax and noncontrolling interest, respectively. The company declared a final dividend of 7.50 rand per share, taking the total dividend for the year to 10.00 rand per share, compared to 6.50 rand per share a year ago.

* Glencore PLC officially dissolved its Rosneft-stake consortium with Qatar Investment Authority after transferring its 14.16% stake in the Russian state-owned company to a wholly owned subsidiary of Qatar Investment, as agreed upon earlier. Glencore and Qatar Investment now hold a direct stake in Rosneft of 0.57% and 18.93%, respectively.

BASE METALS

* The same investors who seeded Argentina-focused lithium player Centaur Resources have backed International Cobalt Resources Ltd., which launched a prospectus ahead of an A$11.2 million IPO on the ASX due Oct. 22 mainly on cobalt with associated gold, copper and nickel across three different provinces and styles of mineralization in Canada. Managing Director Ben Cooper found the assets and has been joined on the board being formed for the IPO by Independent Chairman David Barwick, who has chaired, been managing director or president of over 30 public companies and has brought two mines into production in Canada. Mount Ridley Mines Ltd. Managing Director Ashley Hood is also International Cobalt's nonexecutive director.

* PT Antam (Persero) Tbk. swung to a first-half net profit of 344.45 billion Indonesian rupiah from a year-ago net loss of 496.12 billion rupiah. The results came on the back of higher production and net sales as well as efficiency improvements, which led to stable cash costs. Net sales in the half surged 292% year over year to 11.82 trillion rupiah. Ferronickel sales jumped 90% to 12,579 tons of nickel in ferronickel, and production grew 37% to 9,327 tons of nickel in ferronickel.

* CITIC Ltd. unit CITIC Metal Co. Ltd.'s C$723 million investment in Ivanhoe Mines Ltd. will close Sept. 19 after securing Chinese regulatory approvals. The deal will see CITIC Metal acquire a 19.9% interest in the company, becoming Ivanhoe's largest single shareholder.

* BHP Billiton Group tapped Finland-based Konecranes PLC to replace aging cranes at its Olympic Dam copper mine in South Australia. The crane replacement is part of the company's A$600 million spend during BHP's 2018 financial year to prolong the mine's life.

* Intrepid Mines Ltd. struck a conditional deal to sell its Intrepid Mines Zambia Ltd. unit to Consolidated Mining and Investments Ltd. unit Vulcan Copper Ltd. for US$5 million.

* Mantos Copper SA said a fire affected its sulfur plant at the Mantos Blancos copper mine in northern Chile, El Mercurio de Antofagasta reported. No workers were harmed, and the company is conducting an investigation.

* Peru canceled the mining concession for Camino Minerals Corp.'s Red Beds 2 copper deposit, which was granted to subsidiary Minquest Peru SAC in March, Gestión reported. The concession included a landmark area known as the Rainbow Mountains of Peru, which is part of the Ausangate protected area in the Cusco region.

* Canadian Zinc Corp. completed a previously announced restructuring, which resulted in the company splitting into a publicly listed holding corporation named NorZinc Ltd. and a directly held operating subsidiary retaining the name Canadian Zinc.

PRECIOUS METALS

* S&P Global Ratings raised its issuer credit rating on Newcrest Mining Ltd. and the issue ratings on its debt to BBB from BBB-, with a stable outlook. The rating agency said it expects Newcrest to sustain its strong credit metrics due to its low-cost production, low gearing and stable operations at the Lihir gold mine in Papua New Guinea and the Cadia gold mine in New South Wales.

* Pretium Resources Inc. hit back against Viceroy Research, which shorted the company's stock after releasing a report calling into question its production numbers. The firm said Pretium under-reported how many tonnes of rock it moved at the Brucejack gold mine in British Columbia. "We stand by all our numbers," Pretium President and CEO Joseph Ovsenek said. The mine has courted controversy over the years, given the highly variable nature of gold mineralization in the deposit.

* Pan African Resources PLC reached a three-year wage agreement with the National Union of Mineworkers and the United Association of South Africa, which represent the majority of employees at the Barberton gold mine in South Africa. The deal provides for an average annual wage increase of approximately 6.5% for NUM members and 5.5% for UASA members.

* R.J.K. Explorations Ltd. optioned the drill-ready Rolling Pond property, located within the Moosehead gold belt in Newfoundland. It will be R.J.K.'s newest acquisition in the Moosehead gold belt after the Moosehead Gold District and the Moosehead Extension property.

* Barminco Holdings Pty. Ltd. was awarded a five-year contract extension worth about A$700 million to provide underground mining services at AngloGold Ashanti Ltd.'s Sunrise Dam gold mine in Western Australia.

BULK COMMODITIES

* India's National Company Law Appellate Tribunal asked ArcelorMittal to clear the dues of Uttam Galva and KSS Petron, totaling about 70.00 billion Indian rupees, within three days if it wants to secure eligibility for its bid to acquire Essar Steel India Ltd., Live Mint reported. The tribunal accepted the validity of the bid from VTB Capital-led consortium Numetal Ltd. ArcelorMittal had been looking to mount a legal challenge to the validity of the bid tabled by Numetal Ltd.

* The meeting in the week of Sept. 10 in Berlin to finalize metal supply agreements for 2019 will see European customers avoiding deals with Russia's United Co. Rusal PLC, which is still under U.S. sanctions, Reuters reported Sept. 6, citing three sources familiar with the discussions. The sources disagreed with the expectation that the sanctions will be lifted in October, adding that they "can't agree a deal with Rusal."

* Coal India Ltd.-operated mines, with a combined annual capacity of 20 million tonnes, received notices in July and August from the pollution regulator for the central Indian state of Odisha for environmental noncompliance, Reuters reported. The regulator said the problems in one of the mines included an unusable sludge treatment plant as well as a faulty water sprinkling system. The company said it is fixing the issues.

* South32 Ltd. said in a report discussing its climate change strategy that it will develop decarbonization plans in 2019 to support its goal of net zero emissions by 2050. The company will initially focus on its long-life, emissions-intensive operations in Australia, the Worsley alumina and Illawarra metallurgical coal operations, and will consider current and foreseeable advancements in low-carbon technology and alternative energy sources.

* Mexican Economy Minister Ildefonso Guajardo said the country wants to close the steel and aluminum tariff dispute with the U.S. before it signs the revised North American Free Trade Agreement, Reuters reported.

* ArcelorMittal reached an agreement with Italian steel unions over its planned acquisition of Ilva International SpA. Ilva's workers will vote on the agreement before it is formally ratified, and closing is expected Nov. 1. Italian Deputy Prime Minister Luigi Di Maio said he would no longer oppose the takeover despite previously claiming the tender for the sale was invalid, Reuters reported.

* Members of the United Steelworkers Local 1066 authorized its union leaders to call a strike against U.S. Steel Corp. should labor talks break down, The Chicago Tribune reported.

* The Queensland government in Australia is seeking public comment on Pembroke Resources Pty. Ltd.'s proposed A$1 billion Olive Downs coal mine, Mining Weekly reported. The project would create about 500 jobs per year during construction and could maintain an average of 1,000 jobs and produce up to 15 million tonnes of coal per year once the mine is running, said Cameron Dick, Queensland's minister for state development, manufacturing, infrastructure and planning.

* Polish coal miner Jastrzebska Spólka Weglowa SA is considering a takeover of Prairie Mining Ltd., which has been developing the Jan Karski and Debiensko coking coal mines in Poland, Reuters reported, citing two anonymous sources.

* MC Mining Ltd. struck a deal with China Railway International Group Co. Ltd. for the engineering, procurement and construction contract at the former's Makhado hard coking and thermal coal project in South Africa.

SPECIALTY

* A scoping study for desert scheelite production at Thor Mining PLC's Pilot Mountain tungsten project in Nevada outlined a net pretax income of US$125 million and a 36-month payback period, with an operational life of 12 years.

* Kazakh uranium producer National Atomic Co. Kazatomprom JSC will maintain its "value over volume" plan as it is duty-bound to act "responsibly" and not flood the market with more uranium, the Financial Times reported, citing Chairman Galymzhan Pirmatov. The company will revise its production levels to meet forecasts and will also assess the earlier shutdown of some of its mines.

* Uranium prices rose 30% in the past four months on the back of reduced production, halted projects and operations, and renewed interest, but analysts are concerned over the commodity's long-term outlook, Mining.com reported.

* Mountain Province Diamonds Inc. fetched US$26.9 million in revenues from its seventh diamond sale of the year. The company sold 411,317 carats at an average realized price of US$65 per carat.

INDUSTRY NEWS

* Peruvian Energy and Mines Minister Francisco Ismodes proposed to make permanent a temporary tax benefit for mining companies, Reuters reported. Miners in Peru have enjoyed refunds on an 18% value-added tax rate for about two decades. However, the tax refund, which is set to expire, has drawn flak from opposition lawmakers, who seek to end it this year after the government returned about US$3.63 billion to mining companies in 2016 and 2017.

* U.S. President Donald Trump's pick to lead the U.S. Office of Surface Mining Reclamation and Enforcement, J. Steven Gardner, has withdrawn his name from consideration. Gardner cited uncertainty around his confirmation, reversals on conditions provided by the Office of Government Ethics, unknown financial implications and other factors as the reasons for pulling out.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.

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