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In This List

Glencore under bribery probe in UK; South Africa miners face power supply issues

Mining Exploration Insights - April 2020

Mining Exploration Insights December

Mining Exploration Insights: Dip in gold drilling weighs on results

State of the Market: Mining Q2-2019


Glencore under bribery probe in UK; South Africa miners face power supply issues

TOP NEWS

Glencore under investigation for bribery by UK Serious Fraud Office

The U.K.'s Serious Fraud Office is investigating Swiss-based mining giant Glencore PLC on suspicion of bribery as part of its business affairs. The mining major said it would cooperate with the investigation. The U.K. authority subsequently confirmed the probe in a short statement, adding that it could not comment further on an active investigation.

Mining companies face power supply issues in South Africa as Eskom restructures

Mining companies operating in South Africa are unlikely to see a speedy end to issues with power supply, with a 2022 deadline to restructure state-owned electric utilities company Eskom Holdings SOC Ltd. recently deemed "optimistic" by S&P Global Ratings, despite increased financial support from the government. The rating agency said it did not believe the restructuring could be completed by the 2022 target, saying Eskom's restructuring will require changes across the board while affirming its CCC+ global scale ratings with a stable outlook for the power supplier.

2020 not expected to yield significant cash flow increase among US coal miners

Given expectations for the coal sector heading into 2020, analysts from Wood Mackenzie and Moody's said they do not expect to see a major catalyst to boost coal companies' shareholder return programs in the near term. While coal producers' ability to maintain current levels of share repurchases varies from company to company, analysts said they do not see anything on the horizon that might yield a significant increase in free cash flow generation.

DIVERSIFIED

* Torrens Mining Ltd. is considering listing the highly prospective Laloki copper project in Papua New Guinea in 2020 with additional investment attraction from exploration potential close to the famed Fosterville gold mine in Victoria, Australia. Laloki's very high grade indicates potential for a successful small-scale mining and processing operation, but Torrens Managing Director Steve Shedden said much larger deposits could well be unearthed.

* Havilah Resources Ltd. is essentially debt free after making the final payment of A$1 million plus interest to Investec Australia Finance Pty Ltd., completing repayments for a A$2.5 million secured standby debt facility.

BASE METALS

* Teck Resources Ltd. resumed operations at its Carmen de Andacollo copper mine in Chile after reaching a 36-month collective labor deal with the mine's workers' union, which represents 473 workers at the operation.

* Taseko Mines Ltd. and the Tsilhqot'in First Nation have entered negotiations to reach a long-term solution to the conflict regarding the company's proposed New Prosperity copper-gold project in British Columbia. The parties have agreed to a standstill on certain outstanding litigation and regulatory matters to facilitate the dialogue.

* Pelican Resources Ltd. completed the settlement of the sale of its subsidiary Sibuyan Nickel Properties Development Corp., owner of the Romblon nickel project in the Philippines.

* Krakatoa Resources Ltd. completed its acquisition of the Belgravia copper-gold project in New South Wales, Australia.

PRECIOUS METALS

* Africa-focused gold producer Endeavour Mining Corp.'s CEO, Sébastien de Montessus, said the company is directly reaching out to shareholders of Centamin PLC after the London-listed miner unanimously rejected a C$2.52 billion all-share takeover bid by Endeavour, Reuters reported. According to some Centamin investors and industry analysts, Endeavour will have to improve its offer, which currently values Centamin at 126.27 British pence per share, to secure a deal.

* Canada-based Nexus Gold Corp. agreed to grant Kruger Gold Corp. an option to acquire a 75% stake in the Rakounga gold project in Burkina Faso. Kruger can acquire the interest by paying C$1 million and spending at least C$1.3 million on development over five years.

* M&A deals in the gold sector in 2019 nearly tripled to more than US$30.5 billion, from US$10.8 billion last year, and surpassed the previous record of US$25.7 billion in 2010, Reuters reported, citing Refinitiv Eikon data.

* Canadian miner Kinross Gold Corp. agreed to sell its remaining 20,656,250 shares in Lundin Gold Inc., representing about 9.2% of the latter, to a syndicate of buyers for about C$150 million, with closing expected Dec. 9. The syndicate of buyers include a Newcrest Mining Ltd. subsidiary and the Lundin Family Trust, which increased their stakes to about 32% from 27%, and to about 27% from 23%, respectively.

* Northern Star Resources Ltd. closed the acquisition of the remaining shares of Echo Resources Ltd. it did not own.

* Ibaera Capital Fund LP's shareholding in Azumah Resources Ltd. increased to 83%, under an unconditional all-cash offer to acquire Azumah's outstanding shares for 3.3 Australian cents apiece.

* Excellon Resources Inc. will file an appeal over a court decision that granted a US$23 million award over the noncompliance of a royalty payment over the Miguel Auza silver project in Mexico. The Toronto-listed miner argued that the mine never reached production before it was placed on care and maintenance in 2008.

* Dreadnought Resources Ltd. reached separate deals to acquire three tenements across the Illaara Greenstone Belt in Western Australia, taking its holdings to seven tenements across about 884 square kilometers, covering over 75 kilometers of strike along the Illaara Greenstone Belt.

BULK COMMODITIES

* British Steel Corp. Ltd.'s Hayange mill in France will be sold separately from the rest of the company despite a deal inked by China's Hebei Jingye Group Co. Ltd. to acquire the whole group, London's Financial Times reported, citing four people familiar with the matter. Should a different bidder snap up the rail-producing mill, one of British Steel's few profitable segments, this may complicate Jingye's planned takeover of the steelmaker.

* Apple Inc. purchased the maiden commercial batch of carbon-free aluminum from Alcoa Corp.'s and Rio Tinto's Montreal-based joint venture, Elysis, Reuters reported.

* Stainless steel producer Outokumpu Oyj, will be among the Finnish companies that will face a three-day strike of about 100,000 workers starting Dec. 9, as state mediators failed to reach a deal on wages and work conditions between industrial sector unions and employer organizations, Reuters reported.

* Marco Polo de Mello Lopes, executive president of Brazil's steel mills body, Instituto Aco Brasil, said talks with the U.S. over future steel exports were suspended after a tweet by U.S. President Donald Trump that steel and aluminum imports from Brazil and Argentina would be subject to tariffs, Reuters reported. "Long-term contracts are being fulfilled, but negotiations with other customers are suspended," Mello Lopes said.

* Nippon Steel Corp.'s Nippon Steel Coated Sheet Corp. and Nippon Steel Nisshin Co. Ltd.'s Nippon Steel Nisshin A&C Co. Ltd. agreed to merge in July 2020 in a bid to improve the competitiveness of the Nippon Steel group's exterior building material steel sheet business.

* Steel Authority of India Ltd.'s November sales jumped more than 36% year over year to 1.4 million tonnes, which the company said was a result of its marketing strategy.

* Saudi Arabian Mining Co., or Ma'aden, plans to refinance US$5 billion in debt it raised for the Waad Al Shamal phosphate project by next year, Reuters reported, citing CEO Darren Davis. Ma'aden is in the early stages of determining whether to fully or partially refinance the debt, the report said.

* South Africa's Competition Tribunal approved Exxaro Resources Ltd.'s planned takeover of Cennergi (Pty) Ltd., which owns the Amakhala Emoyeni and Tsitsikamma Community wind farms in Eastern Cape province.

* Botswana coal miner Minergy Ltd. postponed its planned listing on London's AIM amid declining coal prices in southern Africa and uncertainty surrounding Brexit.

SPECIALTY

* Western Troy Capital Resources Inc. entered a binding letter of intent for a reverse takeover by private diamond miner Churchill Diamond Corp., which owns the White River diamond project in Ontario and the Pelly Bay diamond in Nunavut. The company's former shareholders will own about 6.1% of the merged company following the transaction.

* The Superior Court of Québec ordered Nemaska Lithium Inc. to distribute proceeds of its canceled US$350 million senior secured bonds offering to bondholders. The offering was scrapped due to a delay in the completion of the Whabouchi lithium project and the Shawinigan electrochemical plant in Quebec.

* Lithium Australia NL agreed to increase its stake in lithium-ion battery recycler Envirostream Australia Pty. Ltd. to 90% in a A$1.3 million deal.

* The Treasury department of Zimbabwe's Ministry of Finance and Economic Development approved a five-year export tax exemption for unbeneficiated lithium produced from Prospect Resources Ltd.'s Arcadia lithium project.

* EHR Resources Ltd. agreed to acquire Nanuk Diamonds Inc., which owns 625 mineral claims located in northern Quebec, for A$1 million in shares.

INDUSTRY NEWS

* A report on transformation in the South African mining sector has been released by the Mineral Council, which plans to take the government to court in 2020 to challenge economic empowerment requirements in the new Mining Charter, saying it will discourage investment. Member companies have largely met the requirements of the 2010 Mining Charter, which was in effect until 2018, according to the report that was commissioned by the Minerals Council, with CEO Roger Baxter saying there had been "substantial compliance and significant progress" in the industry, and in its efforts to improve.

* The increasing intensity of climate-related regulations, including those currently under discussion in some places, are likely to cost industries about US$2.5 trillion worldwide over the next ten years, insurance company Allianz SE and Euler Hermes Economic Research have found.

* The Association of Mining and Exploration Companies in Australia welcomed the Western Australian Government's decision to allow carbon farming on pastoral leases for the first time. The decision allows pastoralists to earn carbon credits from sequestering carbon on their lands, allowing them to potentially earn up to A$70 million over 25 years from the federal government's Emissions Reduction Fund.

* The Australian Securities and Investments Commission flagged lead managers of small mining and exploration IPOs who give preference to select investors, a practice which prevents retail investors from participating. The regulator urged companies, directors and lead managers to avoid, or at least manage, conflicts of interest.

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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