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Zijin to miss FY'19 output targets; S&P Ratings flags EU steel weakness

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Zijin to miss FY'19 output targets; S&P Ratings flags EU steel weakness

Editor's Note: Today's edition of the Daily Dose was published late due to technical issues. We apologize for the inconvenience.

TOP NEWS

Zijin Mining to miss FY'19 output targets for gold, copper, zinc

Zijin Mining Group Co. Ltd. expects to miss its production targets for gold, copper and zinc this year, despite increasing output for the three metals, Reuters reported, citing a company presentation by executive director George Fang at the China Mining conference in Tianjin province. Gold output is estimated to increase 4.7% yearly to around 38.2 tonnes, but below the guidance of 40 tonnes. Copper output is projected to rise 37.3% to 342,000 tonnes, but missing the target of 350,000 tonnes. Zinc output is expected to climb 34.2% to 373,000 tonnes, also below the guidance of 380,000 tonnes.

S&P Ratings report says EU steel producers suffering more than global peers

An S&P Global Ratings report highlighted greater challenges for steel producers in the EU relative to their global peers as prices for basic products along with margins and EBITDA are back at first quarter 2016 levels while broader demand is expected to remain soft. The steel industry analysis excluded Russian producers. "We see difficult current market dynamics and longer-term structural challenges for the European steel industry," Ratings said, adding that European GDP growth is expected at 1.1% 2020, with steel demand forecast to rise as much as 0.5% next year.

Coeur maintains FY'19 production guidance as Q3 gold, silver output up YOY

Coeur Mining Inc.'s third-quarter gold output climbed to 99,782 ounces from 88,833 ounces last year, while silver output slightly rose to 3.0 million ounces from 2.9 Moz. The miner reaffirmed its full-year production guidance of between 334,000 ounces to 372,000 ounces of gold, 12.2 Moz to 14.7 Moz of silver, 25 Mlbs to 40 Mlbs of zinc, and 20 Mlbs to 35 Mlbs of lead.

DIVERSIFIED

* CEO Ivan Glasenberg disclosed a 9.00% stake in Glencore PLC as of Oct. 9, rising from 8.31% in 2013.

BASE METALS

* Vedanta Ltd. plans to shut down its Skorpion zinc operation in Namibia from early November until the end of February 2020 as technical problems have weighed on ore production, Reuters reported.

* Grupo México SAB de CV's ASARCO LLC unit is facing a strike at its copper operations in Arizona and Texas after unions rejected the company's final contract offer, the Arizona Daily Star and Fastmarkets MB reported. The unions, led by United Steelworkers, have slammed ASARCO's offer, which reportedly did not include wage increases while making cuts to the workers' health insurance and other benefits. A strike vote is scheduled Oct. 11.

* Environmental remediation expert Alex Mojon claimed finding evidence that Metallurgical Corp. of China Ltd. was not managing waste at Ramu nickel-cobalt plant in Papua New Guinea, adding that lab results from the recent spill were "shocking" as all samples were found to have toxic levels of heavy metals contamination, Reuters wrote citing a local media report.

* Separately, Clean TeQ Holdings Ltd. terminated its agreement with Metallurgical Corp. of China to develop the former's Sunrise nickel-cobalt project in New South Wales, Australia due to disagreements on design, procurement, project execution and contracting matters.

* SolGold PLC said that its operations remain unaffected amid protests in Ecuador, following the announcement of President Lenín Moreno of an economic package, which included the removal of fuel subsidies, in order to meet International Monetary Fund commitments. The company is on track to deliver a third mineral resource estimate of the Alpala deposit in the fourth quarter and a pre-feasibility study in the first quarter of 2020.

* Ero Copper Corp. said proven and probable mineral reserves at its 99.6%-owned Vale do Curaçá property within the Curaçá Valley copper mine in Brazil increased 106% to about 38 million tonnes containing 436,000 tonnes of copper at a US$2.75 per pound price assumption, from 18.4 million tonnes containing 342,800 tonnes of copper in September 2018.

* Talisman Mining Ltd. closed the sale of its Sinclair nickel project in Western Australia to Saracen Mineral Holdings Ltd.

* Panoramic Resources Ltd.'s September quarter nickel production fell 12% quarterly to 1,342 tonnes, while copper production was up 5% to 855 tonnes.

* Power has been restored in First Cobalt Corp.'s namesake refinery in Ontario, and a team of engineers and technicians has been deployed to commence a field program.

* The queue to remove aluminum, copper, lead and zinc from London Metal Exchange-sanctioned warehouses operated by H&M Metal in South Korea grew to 30 days from 10 days after new cancellations in Busan, Fastmarkets MB reported. More than 30,000 tonnes of copper were canceled from LME-approved warehouses in Busan from Aug. 23 to Aug. 29.

PRECIOUS METALS

* Canada Cobalt Works Inc. signed a binding letter of intent to acquire the assets of Polymet Resources Inc., owner of PolyMet Labs and the Northern Ontario silver-cobalt camp's only permitted and operating mineral and precious metal processing facility.

* Krakatoa Resources Ltd. exercised its option to acquire the Belgravia project within the Molong Volcanic Belt in Australia, from Locksley Holdings Pty Ltd.

* Tanzanian gold exports surged 25.1% in the year ending Aug. 31 to US$1.91 billion, thanks to higher output, Reuters reported citing the country's central bank, which did not provide export volumes.

* An updated resource estimate for Mexican Gold Corp.'s Las Minas gold-copper-silver project in Mexico, at a gold equivalent cut-off grade of 1.5 g/t, outlined an indicated resource of 645,000 gold equivalent ounces at 3.67 g/t contained in 5.5 million tonnes of ore and an inferred resource of 217,000 gold equivalent ounces at 2.68 g/t contained in 2.5 Mt of ore.

* Petratherm Ltd. was granted a 683-square-kilometer license area, dubbed as the Yuengroon gold project, in Victoria, Australia.

* TriMetals Mining Inc. plans to change its name to Gold Springs Resource Corp. to reflect its focus on the Gold Springs project that straddles the borders of Nevada and Utah.

* Mining production in South Africa, one of the top mining countries in the world, suffered a 3.2% yearly decline in August due to lower production in platinum group metals which accounts for 24% of the nation's mineral group basket, BusinessDay and Mining Weekly reported. PGM output declined 12.5% year on year during the period.

BULK COMMODITIES

* U.S. Steel Corp. expects a third-quarter loss of between US$84 million to US$94 million, or 49 cents to 55 cents per share, swinging from last year's profit of US$291 million, or US$1.62 per share. Adjusted EBITDA is projected in the range of US$134 million and US$144 million, plummeting from US$526 million in the same period in 2018.

* China Vanadium Titano-Magnetite Mining Co. Ltd. "progressively resumed" operations at the Maoling-Yanglongshan mine in China's Sichuan province after mudslides caused by severe flooding disrupted the operation in August.

* PAO Severstal's third-quarter crude steel production inched down 1% from the second quarter to 3.0 million tonnes, while hot metal output grew 7% to 2.5 Mt. Total consolidated steel sales remained unchanged quarter over quarter at 2.8 Mt.

* Teck Resources Ltd. has yet to nail down plans for possible cost controls such as job cuts amid "challenging conditions," a company spokesperson told S&P Global Market Intelligence in response to inquiries over a media report that it plans to cut jobs at Canadian metallurgical coal operations.

* Mosaic Co. will temporarily halt production at its Esterhazy potash mine in Saskatchewan amid increasing inventories caused by a global market slowdown and increased risks of a delay in settling contracts with Chinese clients. The latest move will bring Mosaic's total 2019 output cuts to about 600,000 tonnes.

* A bankable feasibility study for Salt Lake Potash Ltd.'s Lake Way sulfate of potash project in Western Australia outlined a posttax net present value, discounted at 8%, of A$479 million, a 28% internal rate of return, and a 3.5-year payback period.

* The New South Wales water authority has strongly opposed South32 Ltd.'s planned mine-life extension of the Dendrobium metallurgical coal mine, part of its Illawarra coal project in the Australian state, because of its potential effect on water resources supporting Sydney, Reuters reported.

* Tata Steel Ltd.'s Indian operations produced 4.50 million tons of steel in the second quarter of its fiscal 2020, increasing 4.7% year over year, while sales decreased 4.2% to 4.14 Mt in the three months that ended Sept. 30. Tata Steel Europe Ltd. produced 2.46 Mt and sold 2.28 Mt of steel during the quarter, both increasing slightly year over year.

* Fortescue Metals Group Ltd. extended its on-market share buyback program of up to A$500 million by a further 12 months to Oct. 10, 2020.

* The European Commission imposed provisional anti-dumping duties on steel road wheels from China while opening a separate anti-subsidy investigation into certain steel imports from the East Asian country and Indonesia.

* The Indonesian government is considering a proposal by its West Kalimantan provincial government for a change in bauxite royalty rules following a 204% jump in production in the 18 months ended June, Reuters wrote citing a statement issued by the coordinating ministry for maritime affairs. Authorities currently charge miners 3.75% of revenue from bauxite sales.

* Altech Chemicals Ltd.'s minority-owned Youbisheng Green Paper AG has changed its name to Altech Advanced Materials AG and plans to raise US$100 million. Altech Advanced Materials is looking to raise about US$100 million to exercise its recently secured right to acquire a 10% to 49% stake in Altech's high purity alumina plant in Johor Bahru, Malaysia, for US$20.4 million to US$100 million.

SPECIALTY

* Australia and the U.S. will finalize a joint strategy on rare earths and critical minerals within weeks, The Australian reported.

* Vast Resources PLC will sign a joint venture agreement with Zimbabwe Consolidated Diamond Co. next week, for diamond exploration and mining in eastern Zimbabwe, Reuters reported citing Mines Minister Winston Chitando. This is part of President Emmerson Mnangagwa's initiative to increase exploitation the country's mineral resources to improve the economy and boost investment in mining, with a plan of raising the sector's export earnings to US$12 billion by 2023 from $3.2 billion in 2018.

* Western Australia amended the royalty arrangement for lithium producers, resulting in 5% feedstock royalty rate for lithium hydroxide and lithium carbonate that aims to encourage downstream processing and manufacturing. The Association of Mining and Exploration Companies lauded the move, saying the royalty rate allows the state's miners to compete internationally and secure its place in the global lithium value chain.

* Core Lithium Corp. entered into tenement sale agreements with Todd River Resources Ltd. to acquire two new lithium pegmatite projects, namely the Soldiers Creek project and the Walabanba project, in northern Australia for US$50,000 in shares for each project.

* E3 Metals Corp. and Livent Corp. kicked off their joint development project through which they aim to advance E3's ion-exchange direct lithium extraction process on a lithium project in Alberta, Canada, Mining Weekly reported.

INDUSTRY NEWS

* Ling Yueming, vice minister of China's Ministry of Natural Resources, told delegates at the China Mining Conference and Exhibition in Tianjin that the ministry will introduce more measures to the industry later this year after completing the revisions on the Mineral Resources Law to better protect the rights and interests of miners, both from China or abroad.

* Zambia owed major mining companies 2.8 billion kwacha in tax refunds as of June 30, according to Finance Minister Bwalya Ng'andu, Reuters reported.

This publication was delayed by technical difficulties. Any inconvenience is sincerely regretted.

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

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