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Glencore closes Optimum sale; Australia intervenes in Queensland Nickel administration; Hecla posts record output


Essential IR Insights Newsletter - April 2023


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Glencore closes Optimum sale; Australia intervenes in Queensland Nickel administration; Hecla posts record output


Glencorecompletes Optimum coal operation sale

Oakbay Investments' Tegeta Exploration & Resources Ltd. completedthe acquisitionof Glencore Plc's coal mine in SouthAfrica by meeting all obligations, including the payment of 2.15 billion South Africanrand, Bloomberg News reported, citing the administrator of the business-rescue team.

Australiaintervenes in administration of Queensland Nickel

The Australian federal government will intervenein the administration of QueenslandNickel Inc. to recover about A$70 million in entitlement payments owedto employees of the embattled firm and to pursue Clive Palmer to repay the cash,The Sydney Morning Herald reported.

Hecla Mining posts record Q1 output

Hecla Mining Co.achieved record silver productionof 4.6 million ounces in the first quarter, a 61% jump on a yearly basis. Gold productionincreased 37% year over year to 55,688 ounces, while silver equivalent productionwas up 37% over the year-ago quarter to a record 12.0 million ounces.


* Caving in to outcry from suppliers and political pressure,Rio Tinto its plan to extend the length ofpayment terms on up to A$24 billion of supply contracts to 90 days from 45 days,effective immediately.

* The Indonesian State Enterprises Ministry may createa state mining holding company that could acquire foreign-owned shares in miningfirms, with PT Antam (Persero) Tbkand PT Indonesia Asahan Aluminium(Persero) expected to join in, Reuters reported, citing Antam PresidentDirector Tedy Badrujaman.


* The Australian federal government will intervenein the administration of QueenslandNickel Inc. to recover about A$70 million in entitlement payments owedto employees of the embattled firm and to pursue Clive Palmer to repay the cash,The Sydney Morning Herald reported.

* Teck ResourcesLtd. said water containing metals had spilled at its Trailzinc and lead smelting and refining plant in British Columbia for up to 20 minuteson April 13, with some discharge possibly leaking to a nearby creek. The companysaid there is no human health risk as a result of the spill and an assessment ofthe potential environmental impact will be undertaken.

* Waterton Global Resource Management Chief Investment OfficerIsser Elishis said the company expects to enter six base metals deals in 2016 asproducers scramble to cut debt after a decline in prices, Bloomberg News reported.

* Chilean state-miner Codelcohas submitted an environmental impact assessment to exploit new resources recoveredfrom dump sites at its Chile-based Chuquicamatacopper mine, with a plannedinvestment of US$118 million, Business News Americas reported.

* Germany and China have shown interest in investing in coppersmelter development in Chile, Reuters reported,citing state copper commission Cochilco.


* Hecla MiningCo. achieved record silverproduction of 4.6 million ounces in the first quarter, a 61% jump ona yearly basis. Gold production increased 37% year over year to 55,688 ounces, whilesilver equivalent production was up 37% over the year-ago quarter to a record 12.0million ounces.

* Northern StarResources Ltd. said it recorded "extremely strong" results for the March quarter with143,469 ounces of gold sold, up from 142,017 ounces in the December quarter of 2015.Gold sales were at the top end of the company's full-year guidance of 535,000 ouncesto 570,000 ounces.

* Kirkland LakeGold Inc. said it is targetingproduction of 270,000 ounces to 290,000 ounces of gold in 2016 at a head grade of7.7 g/t.

* Nord Gold NVexpanded its own reserves by 8% in 2015, to 14 million ounces, but according toCEO Nikolai Zelenski, discovering "goodquality" deposits is becoming increasingly difficult in the strugglinggold sector.

* First MajesticSilver Corp. said total production in the first quarter of the yearreached a record 5.1 million silver equivalent ounces, up 30% from output in the same quarter last year, as goldproduced jumped to 16,870 ounces in the period from 2,970 ounces a year ago.

* Orosur MiningInc. posted a US$3.1 million netprofit in the third quarter of its 2016 fiscal year, compared to a US$1.9million net loss reported a year ago. The company's cost reduction strategies havealso materialized, with its all-in sustaining costs falling to US$978 per ouncefrom US$1,132 per ounce in the same quarter of fiscal 2015.

* Serabi Gold Plccontinues to consider and conduct its own preliminary internal duediligence and assessment on potential opportunities, including an undergroundproducing gold mine asset.

* Operations were suspendedat Goldcorp Inc.'s mine in Guatemala followinga fall of rock accident, which saw a miner trapped underground.


* Oakbay Investments' Tegeta Exploration & Resources Ltd.completed the acquisitionof Glencore Plc's coal mine in SouthAfrica by meeting all obligations, including the payment of 2.15 billion South Africanrand, Business News Americas reported, citing the administrator of the business-rescueteam.

* According to RioTinto CEO Sam Walsh, the recent reboundin iron ore prices from a record low is not sustainable and figures "may wellsoften in the second half," Bloomberg News reported.

* Separately, Rio Tinto Chairman Jan du Plessis said the companydoes not intend to off-loadits remaining coal mines in Australia as they are "Tier 1" assets andare integral to the company's portfolio, TheAustralian Financial Review reported.

* OJSC NovolipetskSteel's crude steel output in the first quarter increased 3% year over year to 4.0 million tonnes due tohigher production at its Russian Long Products operations and at NLMK USA. Groupsales during the quarter, meanwhile, rose 2% on a yearly basis to 4.0 million tonnes,driven by recovering steel demand in North America and growth in billets exports.

* Norway's US$863 billion sovereign wealth fund — said to bethe biggest in the world — has banned52 coal-related firms from its portfolio in accordance with a new rule that thefund will exclude companies that get more than 30% of their business from coal,Reuters wrote. The banned companies include AES Corp., Allete Inc., and ReliancePower Ltd. of India.

* Credit Suisse Group AG's upgradeof Japan's JFE Holdings Inc. due to the firm's exposure to the recovering Asianmarket has led to stock price gains for other Japanese steelmakers, Bloomberg Newswrote. According to a Credit Suisse analyst, signs that emerging economies are improvingand the outlook for supply cuts in China would help the recovery of Asia's steelmarkets. Credit Suisse upgraded its rating on JFE to "outperform" from"neutral," and lifted its target price to ¥1,900 from ¥1,700.

* Arrium Ltd.'snew administrator — Mark Mentha's KordaMentha — will take a "grassroots"approach in restructuring the collapsed steelmaker, The Australian Financial Review reported. Fairfax Media obtained a letterthat Mentha had sent to Arrium's 7,000 employees, in which the administrator saidhis first step is to "stabilize" Arrium's business units and promisedhe will "leave no stone unturned" to preserve the business and jobs.

* Whitehaven Coal Ltd. continues to rampup output amid depressed coal prices as it battles to remain profitable andits major rivals look increasingly troubled, The Australian Financial Review reported. Managed run-of-mine and salablecoal output rose year over year by 21% and 28%, respectively, to 5.7 million tonnesand 5.3 million tonnes. Whitehaven further said it is on track to meet its fiscal 2016 guidance for salable coalof between 19.5 million tonnes and 20.1 million tonnes. According to WhitehavenManaging Director Paul Flynn, Peabody Energy's move to seek bankruptcy protectiontook a little longer but "was always going to happen," The Australian Financial Review wrote.Flynn also said it would support the industry by taking "some tonnes out ofthe market."

* Noble Group Ltd. CEO Yusuf Alireza admitted that the commoditiesmarkets remaindifficult as the company continues to proceed with refinancing its debt, BloombergNews wrote. The CEO noted the importance of the company's weighted average costof debt, which is forecast to rise to 4.1% in 2017 from an estimated 3.9% this yearbefore dropping to 3.8% in 2018.

* According to The Hindu,villagers opposing POSCO's steel plant project in Odisha's Jagatsinghpur districtare demanding that the company be forced to formally announce its completewithdrawal from the project. The villagers' demand relates to a pending caseas POSCO is unable to work on the project because the land has not been handed overto the company and its environmental clearance expires after July 19, 2017.

* ArcelorMittal'sPolish unit will start the renovation of a blast furnace in Krakow, Poland, in April30, with an investment of over 175 million Polish zlotys, Puls Biznesu reported.

* Celamin HoldingsNL said the International Court of Arbitration of the InternationalChamber of Commerce, or ICC, has appointed a sole arbitrator to determine the dispute with joint venturepartner Tunisian Mining Services, or TMS, over control of Chaketma Phosphates SAC Tunisia, or CPSA. A Celamin unit,which owns the stake in CPSA, applied in mid-April 2015 for the reversal of a sharetransfer against the director general of CPSA, Tunisian Mining, as well as executiveKais Mansouri.

* Vale SAand Fortescue Metals Group Ltd.'sbulk trials of blended ore with Chinese mills could start within a month, with thetwo companies still negotiating the terms of the proposed joint venture, The West Australian wrote.

* The national president of the Construction, Forestry, Miningand Energy Union, Tony Maher, expressed concerns that the bankruptcy of could see someof the company's Australian mines sold off and result in joblosses, ABC reported.

* While Beijing aims to slash China's annual coal capacity byaround 10%, or 500 million tonnes, over the next five years, local governments aretargeting a more aggressive reductionof up to 30%.


* Russian diamond giant PJSCALROSA cut pricesby as much as 2% for its latest monthly sale between April 12 and 14. The pricecut is the first since ALROSA's September 2015 sale.

* China GeneralNuclear Power Corp.'s uranium subsidiary, CGN Uranium Resources Co.Ltd., is looking to acquiremore assets in uranium-rich countries such as Kazakhstan, Canada and Australia,CGN Uranium Chief Engineer Zhou Rongsheng told China Daily. According to the executive, the company is now consideringexpanding its cooperation with Kazakhstan in both uranium production and fuel assemblies.


* Austmine CEO Christine Gibbs Stewart told SNL Metals &Mining that more mining companies need to adoptinnovative technologies in the current market or risk going out of business."The commodity price is not going to come up for a long time. It is said tobe the new market norm. So they're going to have to cut costs out of their business,"Stewart said, adding that the only way it could be done is by becoming "moreinnovative, more efficient and more productive."

* Data from Statistics South Africa showed that the country'smining production fellby 8.7% annually in February, with iron ore declining the most followed by platinumgroup metals, Mining Weekly wrote. Likewise,South Africa's mineral sales were also 1.5% lower year on year in January.

* Russia's Ministry of Natural Resources is offering a rangeof state benefits for mining, providing alloying raw materials to Russian steelmakersto curb their dependence on imports, estimated at over US$500 million per year,Kommersant reported. The ministry also plans tonullify the severance tax for new projects.

* Peru's environment ministry plans to presscharges against Luis Otsuka, president of the Madre de Dios regional government,for allegedly blocking President Ollanta Humala's efforts to formalize the country'sinformal mining sector, Business News Americas reported.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans newssources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish,Thai and Ukrainian. Some external links may require a subscription.