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China seeking compensation from US for lost trade due to metal tariffs

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


China seeking compensation from US for lost trade due to metal tariffs

TOP NEWS

China seeking compensation from US for lost trade due to metal tariffs

China is seeking compensation from the U.S. for potential lost trade due to the proposed tariffs on steel and aluminum announced by President Donald Trump earlier this month, in what could be the first step toward a formal dispute between the two countries in the World Trade Organization, Bloomberg News reported. The Asian nation also dismissed the claim of the U.S. that the new tariffs are on national security grounds. China said the tariffs are proposed by the U.S. to protect domestic producers.

OZ Minerals to acquire Brazil-focused copper-gold miner Avanco for A$418M

OZ Minerals Ltd. intends to make an off-market takeover offer to acquire Brazil-focused copper-gold miner Avanco Resources Ltd., valuing the target at A$418 million, or 17 cents per share. Avanco shareholders will receive 8.5 cents in cash and 0.009 OZ Minerals share per Avanco share.

Yanzhou Coal quadruples FY'17 dividend as net profit surges 346%

Yanzhou Coal Mining Co. Ltd. quadrupled its final dividend for 2017 to 48 Chinese fen per share, from 12 fen per share in 2016, due to a 346% increase in profit for the year. Net income attributable to shareholders in the period jumped to 7.36 billion yuan, or 1.50 yuan per share, from 1.65 billion yuan, or 34 fen per share, in 2016.

DIVERSIFIED

* BHP Billiton Group approved a dividend reinvestment plan for its shareholders, which is expected to be operational for the fiscal 2018 final dividend. The plan allows shareholders to reinvest their dividends to purchase additional ordinary shares in the company.

BASE METALS

* Zinc of Ireland NL decided not to extend its option to acquire the Galmoy lead-zinc processing plant, which is in storage in Darwin, Australia. The company took the decision following a review of the processing requirements for the Kildare zinc project in Ireland.

* Meteoric Resources NL signed a binding agreement to acquire the Gillies cobalt project in Ontario in a cash and shares deal.

* Antofagasta Plc averted a strike at its Los Pelambres copper mine in Chile as about 82% of the unionized workers approved a new labor contract, Reuters reported. The new contract includes an average salary increase of 3% and a signing bonus of US$30,500 per head.

* Workers ended a partial strike at First Quantum Minerals Ltd.'s Cobre Panama copper project in Panama and will return to work over the coming weeks.

* Atalaya Mining plc produced 37,164 tonnes of copper from its Proyecto de Rio Tinto in 2017, the project's first full year of commercial production, a 42% increase over 2016 production. This year, the company expects to produce contained copper of between 37,000 and 40,000 tonnes. Atalaya is expanding the project capacity to 50,000 to 55,000 tonnes per year at a capital cost of €80.4 million, with commissioning scheduled for the second half of 2019.

PRECIOUS METALS

* Premier Gold Mines Ltd. expects to produce 85,000 to 95,000 ounces of gold this year at cash operating costs of US$690 per ounce to US$740 per ounce and all-in sustaining costs of US$800 per ounce to US$850 per ounce of gold. Production in 2017 totaled 139,658 ounces of gold and 357,901 ounces of silver.

* Newcrest Mining Ltd. is resuming mining operations at the Cadia gold-copper mine in New South Wales, Australia, effective immediately.

* Lincoln Mining Corp. terminated an option deal with Ausgold Resources Pty. Ltd. over the Oro Cruz gold project in California after the latter failed to satisfy its obligations.

* Petropavlovsk Plc executed a sales agreement with Gazprombank for sales of 96,000 ounces of gold and for advance payment for up to 12 months. The payment will be settled using proceeds at the prevailing gold price at the date of the shipment.

* Hecla Mining Co. is suing Montana environmental regulators for labeling the company and its top executive as "bad actors," Mining.com reported. Montana's department of environmental quality recently said the company will need to return over US$30 million to resolve a bill for pollution cleanup.

* Anglo American Plc and Lumina Gold Corp. signed a letter of intent to negotiate a potential US$57 million joint venture covering the latter's Pegasus A and B concessions in Ecuador. The companies aim to seal a definitive agreement in the next five months.

* Kinross Gold Corp. agreed to pay the U.S. Securities and Exchange Commission about US$950,000 to settle civil charges in connection with a probe over allegations of improper payments made to government officials and internal control deficiencies at the company's West African mining operations. Meanwhile, the SEC said Kinross did little to verify payments to politically connected consultants and vendors in Ghana and Mauritania were being used for their stated purpose, Reuters reported.

* Lundin Gold Inc. completed a previously announced US$400 million financing, with the funds to be used for the development of its Fruta del Norte gold project in Ecuador.

* Superior Gold Inc. declared commercial production at its Hermes gold project in Western Australia.

BULK COMMODITIES

* Brazilian steelmaker Cia. Siderúrgica Nacional posted a profit in the fourth quarter of 2017 of 377.4 million Brazilian reais, swinging from the year-ago net loss of 55.7 million reais. Net revenue in the quarter increased 10% year over year to about 5 billion reais due to higher steel product and iron ore prices.

* Fortescue Metals Group Ltd. amended its iron ore price guidance to about 65% of the average benchmark Platts 62 CFR index for the fiscal year ending June 30 due to a slow down in Chinese construction activity, and the potential impact of global trade tensions. The first fiscal half revenue realization was 68% of the average Platts 62 CFR index.

* Separately, Fortescue intends to redeem US$1.55 billion of its 9.750% senior secured notes due 2022.

* JSW Steel Ltd. chairman and managing director Sajjan Jindal said the company was not allowed to submit a bid for Essar Steel India Ltd as the lenders were not up for giving "a new entrant a chance," Live Mint reported. Essar Steel reopened the bidding process but limited it to the six firms that had previously filed expressions of interest.

* JSW Steel signed a memorandum of understanding to invest up to US$500 million in expanding operations in Texas. The company's Texas operations supply the energy, petrochemicals, defense and other heavy-equipment sectors in the U.S.

* Separately, ArcelorMittal intends to challenge a decision by creditors to reject its bid for debt-laden Essar Steel in court, the Financial Times reported. VTB Capital-led Numetal, which was also ruled ineligible to bid for Essar, plans to appeal the decision too, a person close to the company said.

* Kommersant reported that PAO Severstal, which supplied about 340,000 tonnes of steel to the U.S. in 2017 for US$157 million, is trying to challenge the country's import duties on steel, effective since March 23. The company filed a lawsuit against the U.S. government in the U.S. Court of International Trade, demanding to withdraw its deliveries from duties and citing "irreparable damage" to its trading company Severstal Export Miami Corp. Meanwhile, PJSC Novolipetsk Steel applied for exemption from the U.S. import tariff on steel slabs.

* Germany's ThyssenKrupp AG is said to be considering selling its materials trading division as part of a strategic overhaul to be announced in May, Reuters wrote, citing a report by German business daily Handelsblatt.

* The EU commissioned a study to see whether the U.S.' steel and aluminum tariffs necessitate the bloc preventing predominantly Asian producers from diverting their steel shipments to European markets, Reuters reported.

* Wesfarmers Ltd. said all conditions have been satisfied for the A$700 million sale of its Curragh coal mine in Queensland, Australia, to Coronado Coal Group, clearing the way for the completion of the transaction, expected in late March.

* BHP Billiton awarded CIMIC Group Ltd.-owned Thiess a A$185 million contract to provide additional mining services for the mining major's Mount Arthur coal operation in New South Wales, Australian Mining reported.

* Coal India Ltd. is expected to supply an estimated 27 million tonnes per annum to thermal power companies via long-term supply agreements secured through bidding in September 2017, Mining Weekly reported.

* Korab Resources Ltd initiated a review to possibly divest its operations and projects in Western Australia and Ukraine to focus on its Winchester magnesite deposit in Australia's Northern Territory.

SPECIALTY

* Kazakhstan Potash Corp. Ltd. is expanding its exploration portfolio to include lithium-tantalum-tin prospects, in addition to its existing potash exploration licenses, on the back of growing global demand for lithium, particularly in China.

* Force Commodities Ltd. entered a joint venture over the Kanuka lithium project in the Democratic Republic of the Congo.

* Mountain Province Diamonds Inc. posted a net income of US$17.2 million, or 11 U.S. cents per share, for 2017, the first year of production at the Gahcho Kue diamond mine, where commercial production was declared March 1, 2017. Net income in 2016 totaled US$4.8 million, or 3 cents apiece. The company recovered about 5.9 million carats for an average recovered grade of 2.14 carats per tonne. Sales in 2017 totaled about 2 million carats for proceeds of US$170.1 million.

* Sunrise Resources Plc said it received requests from potential customers to supply raw perlite for commercial scale expansion trials. The company is now planning to excavate and process bulk samples from its commercial scale pozzolan-perlite project in Nevada.

INDUSTRY NEWS

* The announcement of further tariffs and an escalation of protectionist sentiment from the U.S. in the week of March 23 continued to put pressure on metals prices. While numerous trading partners managed to secure an exemption from proposed U.S. tariffs on steel and aluminum imports, concerns over tit-for-tat measures by China and the potential implications for the wider global economy weighed heavily on investor sentiment.

* Russia's six leading listed metal companies are forecasting higher spending this year, with combined CapEx estimated at US$5.68 billion, reflecting a 52% increase over their 2015 total, the Financial Times reported.

The Daily Dose is updated as of 7 a.m. London time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription. S&P Global Market Intelligence provides links to external sites where these offer further, relevant information to our readers. While we ensure that such links are functional at the time of publication, we are not responsible in instances where those links are unavailable later.