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Samarco seeks restart; Codelco smelter probed; AngloGold's Q1 gold production dips

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

State of the Market: Mining Q2-2020


Samarco seeks restart; Codelco smelter probed; AngloGold's Q1 gold production dips

TOP NEWS

Samarco seeksregulatory approval to restart

Following Brazilian court endorsement of Samarco'ssettlement, BHP BillitonGroup said SamarcoMineração SA has initiated the process of seeking required approvals from relevant authorities to enable a restart ofits operations. "Samarco's operations will restart only when it is safe todo so, and when all regulatory approvals are granted and accepted by therelevant authorities and communities," the company statement said, withoutproviding a time frame.

Codelcosmelter probed for environmental violations

Codelco's Ventanas facility is under investigation bythe Chilean environmental regulator for a total of 13 environmental violationsas communities near the refinery and smelter complained of health problems dueto emissions and heavy-metal particles from the plant, Reuters wrote.The state miner said that the environmental violations do not pose a risk tohealth, adding that it will reply to the accusations in 72 hours.

AngloGoldAshanti Ltd.'s production from continuing operations in the firstquarter this year totaled 861,000 ounces at an all-in sustaining cost of US$860per ounce, compared to 928,000 ounces at US$920 per ounce a year ago, due toplanned reductions from Obuasi, Tropicana and Morila mines, as well as an unanticipated drop inproduction from the Kibali joint venture.

DIVERSIFIED

* Following Brazilian court endorsement of Samarco'ssettlement, BHP BillitonGroup said SamarcoMineração SA has initiated the process of seeking required approvals from relevant authorities to enable a restart ofits operations. "Samarco's operations will restart only when it is safe todo so, and when all regulatory approvals are granted and accepted by therelevant authorities and communities," the company statement said, withoutproviding a time frame.

* Bernstein analysts expect the new, 155 billion Brazilianreais lawsuit against the BHP- and Vale SA-owned joint venture, Samarco Mineração, to beunsuccessful as "Brazil's negotiation power, especially against BHP, isnowhere near that of the United States in the BP case," Barron's wrote.According to the analysts, "Vale is more at risk than BHP, due to theheavy concentration of its assets in Brazil."

* During the week, BHP Billiton intends to reveal a planfocused on increasing its earnings during the currently depressed commoditiessector, Financial Times reported.

* The Association of Mineworkers and Construction Union inSouth Africa presented a memorandum of demands to Glencore Plc, seeking a minimum wage of 6,000 SouthAfrican rand a month for all employees earning less than that amount and a 10%pay increase for those earning above that threshold, Mining Weeklyreported. The union also demanded health benefits and housing and transportallowances,

BASE METALS

* Codelco's Ventanas facility is under investigation bythe Chilean environmental regulator for a total of 13 environmental violationsas communities near the refinery and smelter complained of health problems dueto emissions and heavy-metal particles from the plant, Reuters wrote.The state miner said that the environmental violations do not pose a risk tohealth, adding that it will reply to the accusations in 72 hours.

* Codelco chairman Oscar Landerretche said that privatemining companies in Chile are not fully cooperating in reducing costs as partof industrywide efforts in response to the fall in copper prices. While thestate miner has lowered its bonus payments to employees, other private minerscontinue paying big bonuses, he said. Landarretche called for a unified fronton costs, daily El Mercurio reported.

* Residents of Islay province, in Peru's Arequipa region,will protest against SouthernCopper Corp.'s Tia Maria copper project on May 11, 12, and 13, due tothe project's "imminent" execution, said local community leaders,daily La República reported.

 * On May 9,Grupo México SAB deCV and the Cananea workers union would ratify a preliminaryagreement to reduce the working schedule for its personnel at the mine in lightof the three workers who died on May 3 in a labor accident, daily El Imparcial reported.

* Chinese state-owned MMG Ltd. is among the bidders in discussions to buy copper miner Freeport-McMoRan Inc.'s 56% stake in the asset in theDemocratic Republic of Congo for as much as US$2 billion, the South ChinaMorning Post reported. Previously, MMG acquired the copper project in DRCfor US$1.36 billion in early 2012.

* L'seaResources International Holdings Ltd. said the total productionvolume of tin in concentrates from the Renison joint venture project, part of the Bluestonemines in Tasmania, for the month of April came in at 335 tonnes, representing a year-over-year declineof 41.2%, while the production volume for January to April totaled 2,012tonnes, reflecting a 6.4% decline.

PRECIOUS METALS

* AngloGoldAshanti Ltd.'s production from continuing operations in the firstquarter this year totaled 861,000 ounces at an all-in sustaining cost of US$860per ounce, compared to 928,000 ounces at US$920 per ounce a year ago, due toplanned reductions from Obuasi, Tropicana and Morila mines, as well as an unanticipated drop inproduction from the Kibali joint venture.

* HavilahResources Ltd.'s said its mining partner, Consolidated Mining andCivil, intends to resume open pit mining operations at the gold mine later duringthe week. Start-up was scheduled for normal shift changeover on May 11, butrecent heavy rains delayed access to the site by one day at this stage, thecompany said.

* ChrometcoLtd. said it expects its loss per share and headline loss per sharefor the year ended Feb. 29 to be at least 20% lower year over year.

* MHM MetalsLtd. lodged applications for forfeiture, pursuant to the Mining Act1978, which affect tenements held by Stone Resources Australia Ltd. Stone Resourcessaid it"intends to vigorously defend against the applications."

* Gold RoadResources Ltd. was granted the mining leases covering its Gruyere, CentralBore and Attila gold projects in Western Australia. The company is on scheduleto complete its feasibility study over the Gruyere project by the end of thisyear.

* StillwaterMining Co. reported a consolidated first-quarter net lossattributable to shareholders of US$9.9 million, from year-ago profit of US$23.0million. The company attributed the fall to a 29.7% year-over-year drop in theaverage sales price per mined palladium and platinum ounce to US$612. Totalrevenues were US$133.6 million, down from US$200.5 million a year ago.

* ChinaNonferrous Gold Ltd. secured a US$120 million from its 38.36% shareholder, , to refinance a previous loan and lower the cost ofservicing its debt. The funds will be used to refinance a loan facility withIndustrial and Commercial Bank of China (Macau) Ltd., under which the companyhas drawn US$115 million to date, and for working capital.

BULK COMMODITIES

* SumitomoCorp.'s profit attributable to its metal products segment for theyear ended March 31, dropped to ¥12 billion, from ¥32.5 billion in the prioryear because of a ¥5.3 billion impairment loss in Edgen Group and a decrease inearnings of tubular products business in North America. The company swung to a profitattributable to shareholders of ¥74.55 billion, from a loss of ¥73.17 billion ayear ago.

* SojitzCorp.'s profit attributable to shareholders for the company's metals& coal segment swung to a profit of ¥4.7 billion for fiscal 2015, from ayear-ago loss of ¥2.7 billion, due to recording gains on revaluation of coalbusiness assets, offset by commodity price drops and impairment losses on coaland iron ore interests. The company posted a profitattributable to shareholders of ¥36.5 billion, up from ¥33.1 billion in theyear-ago period. In fiscal 2016, the company expects a profit of ¥43 billion.

* Glencore's Maru Sky has acquired an 8.5% stake inAtlas Iron Ltd.during the latter's restructuring of its debt, The Australian reported.

* BlueScopeSteel Ltd.'s steel plant in Delta, Ohio, is expected to lose about35,000 tonnes of production, for a total financial pre-tax cost of about US$5million, due to an explosion and fire at the South EAF shell. No workerswere harmed and the plant is producing steel from the second EAF.

* On the back of recovering iron ore prices, Goldman SachsGroup revised its iron ore outlook for the quarter to US$55 per metric tonne,up 47%, the July to September view was increased 20% to US$45 and for the lastthree months it was boosted 14% to US$40, TheSydney Morning Herald reported.

* GladiatorResources Ltd. will not go through with the through the acquisitionof a third party, which holds significant iron ore tenement interests within theIsla Cristalina Belt and surrounding areas. The board of the target failed toratify the proposed transaction during their recent meeting, the company said.

* Pan AsiaCorp. Ltd. executed a definitive share sale and purchase with forthe 100% sale of its wholly owned Singaporean subsidiary, Innovation WestMantewe Pte. Ltd., which owns the company's 75% interest in the coalproject in South Kalimantan, Indonesia. The company has also pledged the sharesin Innovation West prior to shareholder approval being obtained.

* BushveldMinerals Ltd.'s wholly owned subsidiary, Bushveld Vametco Ltd.,will acquire Evraz GroupSA 78.8% economic interest in Strategic Minerals Corp., which ownsthe producing Vametco vanadium mine and plant in South Africa, for US$17.2million.

* Russian steelmaker OJSC Magnitogorsk Iron & Steel Works swung back intothe black in the first quarter, unveiling earnings of , 19.9% lower than thesame period of 2015, but up from the US$125 million net loss in the previousquarter. First-quarter revenues fell 11.1% quarter on quarter to US$1.05billion, due to lower seasonal prices for steel in its core central Russianmarket, as well as the further depreciation of the Russian ruble against theU.S. dollar early in the quarter. The Russian steelmaker also confirmed that itsold part of its 5.37% stake in Australian iron ore major , when ironore prices rallied at the start of the year.

* MMK will likely repay US$614 million in debt ahead of schedule this yearusing most of its spare cash on hand, CFO Sergey Sulimov said, adding that thecompany was aiming to close a deal to pay down most of its debt maturing in2016 by the summer. He also confirmed executives were keen to repay"expensive" debt taken on in 2009 to finance construction of thecompany's Turkish steel plants, since the yield was high. Sulimov alsosuggested that a sale of the remaining 3% stake in Fortescue could come soon.

* Fitch Ratings placed Noble Group Ltd.'s long-term issuer default rating,senior unsecured rating and debt ratings of BBB- on Rating Watch Negative. Themove is driven by Fitch's expectations that Noble will focus more onshorter-term and secured financing to lower financing costs amid a difficultoperating environment, which is likely to result in less financial flexibilityfor the company. The Rating Watch Negative will be resolved when Noblecompletes refinancing of its committed bank facilities, due in May, and on theannouncement of its first-quarter results.

* ITOCHUCorp.'s fiscal 2016 net profit attributable to shareholders for itsmetals and minerals segment dropped ¥35.5 billion to ¥11.6 billion, on lower gross tradingprofits. Gross trading profit for the metals segment was down by ¥34.5 billionto ¥32.5 billion due to lower iron ore and coal prices, which was partiallyoffset by an increase in iron ore sales, reduction in iron ore costs, andimprovement in foreign currency translation in iron ore and coal companies.Revenue for the company's metals and minerals segment decreased by ¥33.4billion to ¥220.1 billion.

* Meanwhile, Reuters wrote that ITOCHU is planning toacquire "selective" natural resource assets in collaborationwith China's Citic Group, to benefit from a commodity downturn, while it alsosignaled it may invest in assets beyond iron ore and coal. "We arestanding by to make purchases of resource assets," ITOCHU President andCEO Masahiro Okafuji said.

* ArcelorMittal narrowed its first-quarter to US$416 million fromUS$728 million a year ago. On a yearly basis, EBITDA fell to US$927 millionfrom US$1.38 billion while sales dropped to US$13.40 billion from US$17.12billion a year earlier, reflecting lower steel prices. Crude steel productionreached 23.2 million tonnes, compared to 23.7 million tonnes recorded a yearearlier, with shipments dipping to 21.5 million tonnes from 21.6 milliontonnes. For 2016, ArcelorMittal expects EBITDA of over US$4.5 billion and plansto become free cash flow positive.

* Russia's antitrust regulator 's sale of its railway track toGazprombank in a deal that could finally dispel the threat of bankruptcy thathas dogged the coal group for the past two years. The Federal AntimonopolyService will allow Gazprombank to buy a 75% stake in the 321-kilometer railtrack, which links the massive Elga coal hub to the country's main transportsystem.

SPECIALTY

* Lucara Diamond Corp. sold a 812.77 carat, type IIa diamond — named "TheConstellation" — recovered from the Karowe mine in Botswana for US$63.1 million,or US$77,649 per carat.

* LatinResources Ltd. intends to form a jointventure with Lepidico Ltd.,which will acquire and advance lithium projects in Argentina and Peru. Twojoint venture companies, one in Argentina and the other in Peru, will be formedunder the agreement.

INDUSTRY NEWS

* Mining companies in China their spending on mineralsexploration in 2015, but have become more interested in securing mininglicenses at a time when authorities are slowing the pace of granting newlicenses to curb capacity expansion, latest official data shows. A total of32.61 billion Chinese yuan was invested in exploration programs in China in2015, down 19.0% from the 40.27 billion yuan recorded in 2014, while companiespaid a total of 1.37 billion yuan to acquire 948 exploration licenses in 2015,down 77% and 25.4%, respectively, from a year ago, according to the annualresources report published by the country's Ministry of Land and Resources inApril.

* While the Philippines is said to sit atop some of theworld's largest mineral reserves, the country's mining sector , held back by redtape and civil society opposition, among others. Four out of the fivepresidential candidates in the Philippines have expressed support for mining,but only under strict compliance with the law.

The Daily Dose is updated as of 7 a.m. London time, andscans news sources published in Chinese, English, Indonesian, Malay,Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links mayrequire a subscription.