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BHP greenlights US$2.9B South Flank development

Industry Top Trends 2021: Metals and Mining

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


BHP greenlights US$2.9B South Flank development

TOP NEWS

BHP greenlights US$2.9B South Flank development

BHP Billiton Group's board approved the US$2.9 billion development of its South Flank iron ore project, part of the Area C property in Western Australia. South Flank will fully replace production from the 80 million-tonne-per-year Yandi iron ore mine, which is reaching the end of its economic life. First production from South Flank is targeted in 2021, and the project is expected to produce ore for over 25 years.

Vale, BHP inching closer to settlement with Brazilian prosecutors on Samarco

Vale SA and BHP are said to be inching closer to signing a definitive settlement with Brazilian prosecutors, clearing the way for restart preparations for their Samarco Mineração SA joint venture in the country and for debt talks to begin, Bloomberg News reported, citing sources. The companies secured multiple court extensions to negotiate the settlement of a multibillion-dollar claim stemming from the fatal Samarco tailings dam collapse in 2015. The parties are expected to meet the June 25 deadline to negotiate a deal.

Mitsubishi to up stake in Anglo's Quellaveco copper mine to 40% in US$600M deal

Anglo American PLC signed a heads of agreement with Mitsubishi Corp., where the latter will increase its stake in the Quellaveco copper joint venture in Peru to 40%. Mitsubishi, which held an 18.1% stake in Quellaveco prior to the deal, will acquire a 21.9% interest in project-owner Anglo American Quellaveco SA for up to US$600 million. According to a Financial Times report, Anglo is now expected to push ahead with the US$6 billion project.

DIVERSIFIED

* Vale intends to purchase for cash any and all of its 5.625% notes due 2042. The offer is expected to expire June 21.

* Democratic Republic of Congo's state miner Gecamines SA said foreign joint venture partners should come to an agreement similar to a deal with Glencore PLC, to ensure the earlier payment of dividends, the Financial Times reported. Gecamines Chairman Albert Yuma warned that foreign miners are expected to share their revenue more fairly or face legal action.

BASE METALS

* Nevsun Resources Ltd. plans to extend the life of the Bisha copper-zinc mine in Eritrea through 2022 with an open pit cut-back it had previously ruled out. The move adds about 470 million pounds of zinc and 52 million pounds of copper to production through the end of 2022, with additional capital costs pegged at US$39.7 million.

* Japan's Sumitomo Metal Mining Co. Ltd. sees the global nickel market deficit widening to 88,000 tonnes this year from 72,000 tonnes in 2017 on the back of solid demand for stainless steel and batteries, Reuters reported. Global nickel demand is expected to rise by 7.3% year over year to about 2.30 million tonnes, while supply is set to rise by 6.8% to 2.21 million tonnes.

* Fortune Minerals Ltd. may defer its planned US$200 million metals processing plant in Saskatchewan and could decide to directly sell concentrates to third parties from the flagship Nico cobalt mine in Canada's Northwest Territories, Mining Weekly reported. The company is making adjustments to the Nico project's engineering designs to allow for flexibility in downstream processing options, as third-party refiners are interested in buying concentrates directly from the mine.

* Jubilee Metals Group PLC notified BMR Group Plc that discussions with Zambian authorities, in the company's capacity as operator of the proposed Kabwe lead-zinc-vanadium joint venture, are not expected to conclude until later this month. As a result, Jubilee said it would not be able to finalize its initial design, work program and budget for the construction phase of Kabwe until after the talks conclude.

* Independence Group NL CEO Peter Bradford said the company is on track to deliver a pre-feasibility study on the downstream processing of nickel and cobalt sulfate at its Nova operation in Western Australia, Mining Weekly reported.

* Canada-based EMX Royalty Corp.'s 42%-owned IG Copper LLC agreed to sell the Malmyzh copper-gold project in Russia's Far East to Russian Copper Co. for an estimated US$68 million.

* Japan's Panasonic Corp. expects to more than triple its cobalt consumption in five years, Reuters reported, citing sources. The battery maker has been looking to secure cobalt supply deals, with industry sources saying that it expects to use 10,000 tonnes of the metal in 2019 and 2020, with consumption increasing to 25,000 tonnes per year by the early 2020s.

PRECIOUS METALS

* Ahead of a shareholder meeting scheduled for July 24, Alexandria Minerals Corp. "strongly" recommended shareholders vote against a dissident proposal to shake up its board of directors, led by its recently fired CEO.

* Germany-based technology group Heraeus plans to open a US$100 million precious metals refinery and recycling plant in China in September to capitalize on the country's rising demand for platinum group metals, Reuters reported. The facility will manufacture precious metal-based products for use in the auto, glass, fertilizer and other industries.

* Americas Silver Corp.'s Galena Complex in Idaho will fail to meet its production target for the June quarter after mining was interrupted twice in the past few months.

* Monarques Gold Corp. completed an updated resource estimate for the McKenzie Break gold project in Quebec, outlining two scenarios. The first scenario comprises a combination of open pit and underground resources, while the second scenario covers only underground resources.

* Chesser Resources Ltd. withdrew from the farm-in agreement with Mithril Resources Ltd. over the Kurnalpi nickel project in Western Australia.

* Silver Mines Ltd.'s feasibility study for its wholly owned Bowdens silver project in New South Wales, Australia, pegged a posttax net present value, discounted at 5%, of A$70.6 million and a 17.9% internal rate of return.

* The body of the fifth miner was recovered at Sibanye Gold Ltd.'s Ikamva mine, part of the Kloof gold operations in South Africa.

BULK COMMODITIES

* Miners including BHP, Rio Tinto, Glencore and Anglo American rejected a compromise plan put forward by Aurizon regarding a dispute with the Queensland competition regulator over access charges to its coal railway network. They said it was in the rail company's commercial interests to prolong the dispute as it would receive over A$500 million in additional revenues from interim tariffs, The Australian Financial Review reported.

* Atlas Iron Ltd. shares crashed in June 14 trade on the ASX after it received a notice from the Office of the Minister for Transport, Planning and Lands, which implied that its North West Infrastructure joint venture did not have priority to develop Stanley Point Berths three and four at Port Hedland in Western Australia.

* Responding to a recent report by IFR Asia that Yancoal Australia Ltd. was planning a dual primary listing in Hong Kong, which could raise between US$600 million and US$800 million, the company said its board has not made a decision to pursue such a transaction at this time and there is no certainty such an initiative may proceed.

* Vedanta Resources PLC is considering options, including layoffs, for some of the 2,000 workers of its iron ore business in southwest India that was ordered closed by a court, Reuters reported, citing sources. In February, the Supreme Court cancelled all iron ore extraction permits in Goa state and ordered mining to cease from March 16 on environmental and other concerns.

* Improved average prices for iron ore and steel products boosted OAO Metalloinvest's net profit by 6.4% year over year to US$416 million in the first quarter.

* Nucor Corp. expects its second-quarter earnings to "increase significantly" over the first quarter on the back of higher prices and profitability. The company guided for earnings in the US$2.05 to US$2.10 per diluted share range, as compared to US$1.10 per diluted share in the first quarter and US$1 per diluted share in the second quarter of 2017.

* Schmolz + Bickenbach AG launched a €150 million bond issue, just a few months after its chairman severed ties to Russian oligarch Viktor Vekselberg to help clear the way for the debt deal, Reuters reported. The Swiss steelmaker plans to use proceeds to repay outstanding debt used to pay for its acquisition of France's Asco Industries SAS, it said in a statement.

* Labor representatives at ThyssenKrupp AG made progress in talks with management over the German group's proposed European steel joint venture with Tata Steel Ltd., Reuters reported, citing Markus Grolms, vice chairman of ThyssenKrupp's supervisory board.

* China Shenhua Energy Co. Ltd.'s coal output and sales in May rose 2.5% and 3.9% year over year, respectively, to 24.7 million tonnes and 35.0 million tonnes.

* China's coal output in May hit 297 million tonnes, up 3.5% year over year, as producers picked up the pace to answer rising demand just ahead of summer, Reuters reported, citing data from the National Bureau of Statistics.

* EU countries unanimously backed a plan to slap import duties on €2.8 billion worth of U.S. products after the U.S. imposed taxes on the imports of European steel and aluminum, Reuters reported. Meanwhile, Japan is seeking to join the EU in its push to set up World Trade Organization dispute resolution proceedings with the U.S. over the tariffs, Reuters wrote, citing a Japanese government official.

* Oakland, Calif., officials formally appealed a federal court judgment overturning a ban on transporting or storing coal in the city that has halted the development of a proposed export facility.

* A pre-feasibility study for Hill End Gold Ltd.'s Yendon high-purity alumina project in Victoria, Australia, outlined a net present value, discounted at 10%, of US$692 million, an internal rate of return of 34% and a 4.1-year payback period.

SPECIALTY

* Mineral Deposits Ltd. recommended that shareholders reject Eramet's new takeover offer of A$1.75 per share, saying the offer is still below its independent expert's value range of between A$2.04 per share and A$2.52 per share and remains conditional.

* Savannah Resources PLC's scoping study at its 75%-owned Mina do Barroso lithium project in northern Portugal estimated a posttax net present value, discounted at 8%, of US$241 million, a 48.6% internal rate of return and a 2.1-year payback period. The project is expected to generate life-of-mine EBITDA of US$805 million.

* Kazakhstan's state-owned National Atomic Co. Kazatomprom JSC signed a contract with Swedish company Vattenfall AB for the supply of natural uranium.

* Piedmont Lithium Ltd. estimated a maiden indicated and inferred resource estimate for its Piedmont lithium project in North Carolina of 16.19 million tonnes grading 1.12% lithium oxide for 182,000 contained tonnes.

* Luxembourg-based Anatol Sarl will not proceed with a takeover bid for Slovenian metal products maker Cinkarna Celje, Reuters reported. "Anatol was not enabled to perform due diligence in time so it will not bid for Cinkarna," said Propiar, a strategic communication firm that represents Anatol. The company said last week it was willing to pay up to €246.52 per share, which would value Cinkarna at €200.8 million.

INDUSTRY NEWS

* Canada and Argentina signed three memorandums of understanding, covering mining policy, energy efficiency and nuclear energy cooperation, Mining Weekly reported.

* Former Fortescue Metals Group Ltd. CEO Neville Power issued a "call to arms" to Australia's mining executives to stand up to their opponents who would sever the critical ties between industry and communities amid rising distrust in corporate Australia.

* Illegal mining and dealing of metals and diamonds in South Africa is valued to be around 7 billion South African rand per annum, Mining Weekly wrote, citing a PricewaterhouseCoopers report.

* Mining output in South Africa fell 4.3% on a yearly basis in April. Platinum group metals were the largest negative contributor with a 6.5% decrease, Mining Weekly reported, citing the country's national statistics agency.

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