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BHP tipped to take US$1.2B impairment on Jansen; Gascoyne enters administration


Essential IR Insights Newsletter - April 2023


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According to Market Intelligence, April 2023


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BHP tipped to take US$1.2B impairment on Jansen; Gascoyne enters administration


BHP may take US$1.2B impairment on Jansen project, says Deutsche Bank

BHP Group may record a US$1.2 billion impairment at its Jansen potash project in Saskatchewan as accounting firm EY starts auditing the mining giant in July, The Australian Financial Review reported, citing Deutsche Bank analyst James Gurry. The analyst said it is time to review the carrying value of the project following CEO Andrew Mackenzie's admission that BHP overinvested in the US$5.7 billion project.

Voluntary administrators appointed to Gascoyne Resources

Voluntary administrators were appointed to Gascoyne Resources Ltd. amid an expected cash flow shortfall over the next six months caused by lower-than-expected ore grades at its flagship Dalgaranga gold project in Western Australia.

Vedanta launches international arbitration against Zambia over Konkola seizure

Vedanta Resources Ltd. launched international arbitration against the Zambian government after Konkola Copper Mines PLC was placed into provisional liquidation. The company's executives have not been allowed to visit the operation. Despite the dispute, Konkola customers told Fastmarkets MB that copper deliveries for May arrived on time and shipments for June are expected to continue normally.


* Codelco partially halted work at its El Teniente copper mine in northern Chile following the death of a worker, who died after getting hit by a rock while working in the mine's Pilar Norte sector, Reuters reported.

* The construction license of Southern Copper Corp.'s Tia Maria copper mine in Peru's Arequipa region is reportedly ready to be issued at the Ministry of Energy and Mines' General Directorate of Mining, after the company resolved observations made in the licensing process, daily La República wrote. However, the project could be disqualified if the government does not grant the permit before August, when the project's environmental impact study expires.

* Altus Strategies PLC's Ethiopian subsidiary, Altau Resources Ltd., received the 285-square-kilometer Zager exploration license targeting volcanogenic massive sulfide-hosted copper-gold deposits in the Tigray National Regional State of northern Ethiopia.


* Gold Fields Ltd. said a female leader of a trackless crew died June 2 at its South Deep mine in South Africa, the first fatality at the mine in 2019. She was hit by a rock that came loose following a series of four seismic events in quick succession. All operations at the mine were suspended for a day following the accident. The underground corridor where the accident occurred will remain closed pending a safety check.

* Fidelity International Ltd., a 3.2% shareholder in Acacia Mining PLC, said Barrick Gold Corp.'s takeover bid for the mining company is about 50% too low, Reuters reported.

* The controversial arrest of an opponent to the Cochrane Hill gold project in Nova Scotia at an information session last week was a "setback," Atlantic Gold Corp. said, but will not delay development of unpermitted gold projects in its 12-year Moose River Consolidated mine plan or affect a C$722 million takeover by St Barbara Ltd.

* Egan Street Resources Ltd. secured approval for the mining proposal and associated closure plan for its Rothsay gold project in Western Australia. Egan Street said the state's mines department is still assessing the company's clearing permit and license and works approval.

* Nelson Resources Ltd. applied for new tenements E63/1971 and E28/2923 near its Socrates, Grindall and Redmill gold projects in Western Australia, consolidating the historical Woodline project.

* Cia. de Minas Buenaventura SAA dismissed 40 workers at its Orcopampa gold-silver operations in Peru due to lower production, reported, citing newspaper La Republica. Local community leaders are planning to retaliate with a strike, the report said.

* Three former directors of failed gold miner Apex Minerals NL are facing a A$74 million lawsuit over an insolvent trading claim, The Australian reported.

* Bravura Consortium plans to spend more than US$50 million to explore for platinum in Zimbabwe, Reuters reported, citing the country's mines minister.

* Metals Exploration PLC lenders HSBC and BNP Paribas and major shareholders MTL Luxembourg SARL and Runruno Holdings Ltd., which hold the company's mezzanine debt, renewed a standstill agreement for another month until June 28.


* South Korea's POSCO is considering an additional investment of up to 200 billion South Korean won to improve compliance with tighter environmental regulations at its steelmaking facilities, Reuters reported, citing the senior vice president of steel division, Ahn Yoon-gih. The investment will be in addition to the company's previously announced plans to spend 1.07 trillion won by 2021 to build environmentally friendly facilities and reduce emissions in South Korea.

* Resource Generation Ltd. secured funding for construction of its Boikarabelo coal mine in South Africa, with the second member of a proposed lending syndicate confirming its participation. However, achieving financial close still requires the company to secure approval from the third member, finalize the rail link funding, secure directors' approval and finalize remaining key project-related contracts.

* The U.S. government considered imposing tariffs on Australian goods amid concerns of increasing aluminum imports from the country but later decided against doing so following opposition from officials at the U.S. State Department and Defense Department, The New York Times reported, citing several people familiar with the discussions. Responding to the report, Australian Prime Minister Scott Morrison said Australian aluminum exporters are adhering to the terms of a deal with the U.S., Reuters wrote.

* Shougang Concord International Enterprises Co. Ltd. will pass its off-take rights on Mount Gibson Iron Ltd.'s Koolan Island iron ore mine in Western Australia to Hong Kong-listed Newton Resources Ltd.

* Centrex Metals Ltd. settled the previously announced A$1.4 million sale of its noncore Port Spencer landholding in South Australia for A$1.4 million to FREE Eyre Ltd.

* India included Japan's Nippon Steel Corp. and Mitsubishi Steel Mfg. Co. Ltd. alongside South Korea's POSCO as a possible joint venture partner of state-owned Steel Authority of India Ltd. amid delays in ArcelorMittal's proposed takeover of bankrupt Essar Steel India Ltd., Bloomberg News reported, citing Steel Authority Chairman Anil Kumar Chaudhary.

* China Baowu Steel Group Corp. Ltd. will acquire a 51% stake in rival Magang (Group) Holding Co. Ltd. and a 45.54% interest in Magang unit Maanshan Iron & Steel Co. Ltd. at nil consideration. Baowu and Magang were in preliminary takeover talks in September 2018.

* Fragments at the northern slope of the pit at Vale SA's Gongo Soco iron ore mine in Brazil have started to slowly disintegrate, reducing concerns about a sudden landslide that could trigger a dam collapse. The company also dismissed speculations that it would relocate residents near its Feijao and Gongo Soco mines to carry out mining exploration activities.

* Unionized workers at Alcoa Corp.'s Baie Comeau aluminum smelter in Quebec ratified a new six-year labor deal that includes a 16% salary increase, Montreal Gazette reported. Meanwhile, the United Steelworkers union authorized local unions representing more than 1,500 workers to launch a strike at the company's facilities in Warrick, Ind., Massena, N.Y., Gum Springs, Ark., Point Comfort, Texas, and Wenatchee, Wash., after failed negotiations.

* SouthGobi Resources Ltd.'s shares resumed trading on the Toronto Stock Exchange and on the Hong Kong market after the coal miner investigated former senior executives over several fraudulent transactions and took remedial actions.

* PJSC Novolipetsk Steel is biding its time to make "decent" investments in the U.S. in light of 25% tariffs on imports imposed in 2018, according to the Russian steelmaker's controlling shareholder and chairman, Vladimir Lisin, Interfax reported.

* Gombojav Zandanshatar, chair of the Mongolian Parliament, said in an interview published by the Nikkei Asian Review that upcoming elections and "other factors" could delay the partial listing of state-owned Erdenes-Tavantolgoi JSC.

* Thyssenkrupp AG acquired the elevator business of Nashville Machine Co. Inc. ahead of a planned IPO of its own elevators unit.

* A miner at Rex Coal Co. Inc.'s CVB No. 1 mine in Kentucky died from injuries sustained in an accident in May.


* Tungsten Mining NL secured an initial 20% interest in the Hatches Creek tungsten project in Australia's Northern Territory by reimbursing GWR Group Ltd. for A$1.7 million of past exploration expenditures. The company can increase its interest to 51% by spending a further A$3.0 million within five years and can acquire the remaining interest for about A$7 million if a decision to mine is made during the sole-funding stage.

* Lucapa Diamond Co. Ltd. raked in US$10.0 million in revenue from the sale of 5,573 carats of run-of-mine diamonds from its 40%-owned Lulo mine in Angola, representing an average price of US$1,800 per carat.

* King Island Scheelite Ltd.'s feasibility study for its Dolphin open-cut tungsten project in Tasmania, Australia, outlined a pretax net present value, discounted at 8%, of A$146 million, a 47% internal rate of return and a 2.75-year payback period. The feasibility study estimated mining and processing of about 400,000 tonnes per annum of ore for eight years to produce about 3,500 tonnes of tungsten trioxide concentrate per year.

* Nova Minerals Ltd. mandated KPG Capital & Co. to act as adviser for the potential sale or joint venture of its Windy Fork rare earth elements project in Alaska. Meanwhile, Nova expects its Snow Lake Resources Ltd. unit to start trading on the Canadian Securities Exchange in late July or August.

* Beowulf Mining PLC's recent drilling at its Aitolampi graphite project in Finland extended the higher-grade Western Zone by an additional 100 meters. The company is reviewing its plans for a scoping study at Aitolampi, postponed in 2018 to collect more baseline environmental data.

* Yellow Cake PLC purchased an additional 1.2 million pounds of uranium from JSC National Atomic Co. Kazatomprom for US$30.4 million. The company now holds about 9.6 million pounds of uranium.

* Local environmentalists in Colorado welcomed a federal judge's recent decision to end a seven-year ban on uranium mining in the state's West End area as it would allow authorities to assess the environmental impact of the proposed Piñon Ridge uranium mill, Telluride Daily Planet reported.


* Confirming market speculation, ASX-listed mining services provider Macmahon Holdings Ltd. said it is in discussions for a potential acquisition of GBF Underground Mining Group; however, no definitive agreement has been reached.

* The state of Minas Gerais in Brazil entered into a memorandum of understanding with tech company Inmarsat for monitoring all tailings facilities in the area, reported. The technology will provide real-time surveillance of tailings dams.

* The U.S. terminated India's designation as a beneficiary developing country, effective June 5, canceling the Asian country's preferential access to the U.S. market.

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