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Antofagasta improves Q1 copper output by 7.3% YOY; Metallurgical Corp. of China Q1 profit up 7.19% YOY; Fortescue to knock off further US$577M in debt

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


Antofagasta improves Q1 copper output by 7.3% YOY; Metallurgical Corp. of China Q1 profit up 7.19% YOY; Fortescue to knock off further US$577M in debt

TOP NEWS

Antofagastaimproves Q1 copper output by 7.3% YOY to 157,100 tonnes

AntofagastaPlc's copper output for the first quarter went up 7.3% year over yearto 157,100 tonnes, buoyedby first full quarter production from Zaldivarand higher output from Antucoya.The number was offset by lower production at Centinela Cathodes due to declining grades and no contributionfrom Michilla, whichis on care and maintenance. Gold production went down 1.2% to 56,700 ounces comparedto the corresponding quarter last year due to higher gold recoveries at Centinela.Meanwhile, molybdenum fell 19% to 1,700 tonnes from 2,100 tonnes year on year becauseof lower grades.

Metallurgical Corp. ofChina's Q1 profit up 7.19% YOY to 1.27B yuan

MetallurgicalCorp. of China Ltd. increasedits net profit attributable to shareholders by 7.19% to 1.37 billion Chinese yuanin the first three months of the year, compared with the same period of 2015, despitea 6.18% slump in its operating income to 42.57 billion yuan. The company's profitresult was aided by a 30.8 million yuan gain from the disposal of non-current assets,90.0 million yuan worth of government subsidies and a 4.4 million yuan saving dueto a debt restructuring.

Fortescue to knock off further US$577M in debt

is a further US$577 millionworth of debt, which will reduce the Australian iron ore producer's interest paymentsby US$48 million each year. "Today's announcement brings the amount of debtFortescue has repurchased in the last 12 months to US$1.7 billion, with our totaldebt repayments in the last two and a half years now exceeding US$4.8 billion,"CFO Stephen Pearce said.

DIVERSIFIED

* AntofagastaPlc's copper output for the first quarter went up 7.3% year over yearto 157,100 tonnes, buoyedby first full quarter production from Zaldivarand higher output from Antucoya.The number was offset by lower production at Centinela Cathodes due to declining grades and no contributionfrom Michilla, whichis on care and maintenance. Gold production went down 1.2% to 56,700 ounces comparedto the corresponding quarter last year due to higher gold recoveries at Centinela.Meanwhile, molybdenum fell 19% to 1,700 tonnes from 2,100 tonnes year on year becauseof lower grades.

* GlencorePlc has priceda CHF 250 million bond, maturing May 2021, at a yield of 2.25%, Reuters reported.This was the first bond offering since the company was effectively locked out ofthe debt markets in September 2015 when concerns over its ability to manage borrowingssent its equities and bonds into a downward spiral. The mining major opened itsbooks on the same day, looking to raise a minimum of CHF 150 million, with an indicativeyield of 2.25%.

* 's profit attributableto its shareholders for the first quarter jumped38.2% year over year to C$94 million. Results included a C$41 millionboost from positive pricing adjustments and commodity derivative gains, comparedto a C$38 million loss in the first quarter of 2015. Meanwhile, revenue for theperiod fell 16.1% to C$1.70 billion and EBITDA decreased by 5.3% to C$517 million.During the quarter, the company produced 6.6 million tonnes of steelmaking coal,82,000 tonnes of copper, 175,000 tonnes of zinc in concentrate and 79,000 tonnesof refined zinc.

BASE METALS

* MetallurgicalCorp. of China Ltd. increasedits net profit attributable to shareholders by 7.19% to 1.37 billion Chinese yuanin the first three months of the year, compared with the same period of 2015, despitea 6.18% slump in its operating income to 42.57 billion yuan. The company's profitresult was aided by a 30.8 million yuan gain from the disposal of non-current assets,90.0 million yuan worth of government subsidies and a 4.4 million yuan saving dueto a debt restructuring.

* Citing the continuing uncertainty in thebase metal sector, Crazy Horse ResourcesInc. pulled outfrom the acquisition of SolfotaraMining Corp.'s Basaycopper project in the Philippines.

* SunridgeGold Corp. completedits purchase and sale agreement with Sichuan Road & Bridge Mining InvestmentDevelopment Corp. Ltd. pertaining to the company's 60% interest in the Sunridgeconfirmed payments of US$65 million for the purchase of the shares of Asmara, US$6million for the first installment of the remaining principal of a deferred paymentowed to Eritrean National Mining Corp. and US$950,982 of interest accrued on thedeferred payment to closing by ENAMCO. The payment totaled US$68.6 million.

* Preliminary results of an internal investigationinto the tailings spill at Codelco'sAndina Divisionin Chile revealedthat the mine's general manager adopted the correct preventive action. However,his instructions, for unknown reasons, were not followed. The investigation willcontinue identifying responsibilities along the chain of command, Codelco said.

* Separately, Diario Financiero reported that despite the recent rain storm that hitcentral Chile, with the consequent flooding of access tunnels into the division and therisk of ground failure, the expansion the project continuesto progress while maintaining the safety of its workers.

* The CEO of the Collahuasi copper mine in Chile and president ofmining fair Expomin 2016, Jorge Gomez, said that despite industry efforts to reducecosts, there is still workto improve return to shareholders, even as companies recover their productivitylevels, Diario Financiero reported.

* IndependenceGroup NL divested33.8 million shares, or its 4.8% stake, in GoldRoad Resources Ltd. on April 20, just a week before the gold hopefulannounced an institutional placement and entitlement offer to raise A$74 million,The Australian Financial Review's StreetTalk reported.

* Freeport-McMoRanInc. posted a netloss attributable to shareholders of US$4.18 billion for the first quarterof 2016, widening from US$2.47 billion booked a year earlier. The net loss includesnet charges totaling US$4 billion attributed mainly to a reduction in the carryingvalue of the company's oil and gas properties, idle rig costs and other items. Excludingthese, Freeport's net loss totaled US$197 million, or 16 cents per share. Meanwhile,first-quarter operating loss increased year over year to US$3.88 billion from US$2.96billion, while its revenue fell to US$3.53 billion from US$4.15 billion in the sameperiod a year ago.

* Separately,Reuters quoted Freeport CEO Richard Adkerson as saying that the company is in "advanceddiscussions" over the sale of number of its copper assets, but refusedto name them.

* Meanwhile, the Indonesian government hasput a US$630 million priceon a 10.64% stake in Freeport's PTFreeport Indonesia unit. Freeport had offered to sell the stake forUS$1.7 billion in January, but it was rejected by the government as it was too expensive.The company has now been requested to amend its offer.

PRECIOUS METALS

* 's grossrefined platinum production was up17% year over year at 353,000 ounces during the third quarter of the2016 financial year. Palladium output climbed 24% to 219,000 ounces compared tothe same three-month period of 2015, rhodium production rose 43% to 53,000 ouncesand nickel production increased 5.6% to around 4.0 million tonnes.

* has an additional commitment of US$38million for its revolving credit facility from Investissement Québec unit RessourcesQuébec. The credit facility, led by National Bank of Canada and Deutsche Bank, nowtotals US$138 million and matures in February 2020.

* 's postponedUS$5 billion Conga gold project in Peru, a joint venture between and , isnolonger socially and economically feasible, Gestión reported, citing Buenaventura chief executive Roque Benavides.

* the labor conflict withthe union workers at its ManantialEspejo silver mine in Argentina and restarted production. The companysaid it is still on track to achieve its full-year consolidated production forecastof 24.0 million ounces to 25.0 million ounces of silver and 175,000 ounces to 185,000ounces of gold.

* Separately,Pan American Silver exercisedits second tranche option to subscribe for additional common shares of in order tomaintain a 10% ownership interest in Kootenay's issued and outstanding shares. Asa result, Pan American intends to subscribe for 6,793,550 additional Kootenay commonshares for an aggregate subscription price of C$1.6 million.

* about 60% of the recoverable goldat its Prominent Hillstockpile in South Australia at an average price of A$1,713 per ounce, amountingto 171,200 ounces that is expected to generate A$293 million of revenue from 2018to 2021.

* swung to an attributable to shareholders, compared to a year-ago profit of US$57 million, primarilydue to US$139 million in foreign currency losses. The company's gold output andsales both fell during the quarter to 1.28 million ounces and 1.31 million ounces,respectively, but maintained its full-year output guidance of 5.0 million ouncesto 5.5 million ounces of gold at lower all-in sustaining costs of US$760 to US$810per ounce.

* Russianprecious metals miner Polymetal InternationalPlc decided to outsourcerefining of concentrate from its flagship Kyzyl project in Kazakhstan to third parties inChina and Russia, in a move aimed at reducing the local environmental impact ofthe operation and cutting down the project's capital intensity in the current toughenvironment for raising mine finance.

* EricSprott will purchase another16.2 million common shares of NewmarketGold Inc. from Luxor Capital Partners LP and affiliates at US$2.80 pershare for a total US$45.4 million. With the latest purchase, Sprott will own approximately17.9% of the company's issued share capital.

* said New York-basedTocqueville Gold Fund acquired19.5 million shares of the company. The purchase was made at 20 Canadian cents pershare through an open market transaction.

* receivedapproval for explorationand drilling on its mining claims encompassing 400 acres, including the area ofthe Stardust gold mine in Yuma County, Ariz.

* signed abinding letter of intent with AldershotResources Ltd. to optionthe Gowganda goldproject in Ontario. Under the terms, Aldershot can earn up to a 75% interest inthe project.

BULK COMMODITIES

* is a further US$577 millionworth of debt, which will reduce the Australian iron ore producer's interest paymentsby US$48 million each year. "Today's announcement brings the amount of debtFortescue has repurchased in the last 12 months to US$1.7 billion, with our totaldebt repayments in the last two and a half years now exceeding US$4.8 billion,"CFO Stephen Pearce said.

* a net loss of US$340 million in thefirst quarter, compared with a loss of US$75 million reported in the year-ago period,amid tough market conditions. The figure included supplemental unemployment andseverance costs of US$25 million.

* Meanwhile,U.S. Steel filed a complaintwith the U.S. International Trade Commission against major Chinese steel producersand distributors over alleged illegal unfair methods of competition including pricefixing, theft of trade secrets and the circumvention of trade duties by false labeling.The complaint also sought to exclude all unfairly traded Chinese steel productsfrom the U.S. market.

* widened its net income attributable to equity holders toUS$94.4 million in the first quarter, from US$68.5 million a year earlier. The improvedbottom line was largely driven by a substantial reduction in the Luxembourg-basedsteelmaker's costs and an improvement in the EBITDA margin.

* A floodingaccident on April 25 at the Zhaojin coal mine in China's Shaanxi province left 11miners missing,China Mining reported, citing local authorities. There were 67 workers working inthe mine shaft during the accident and the rest managed to escape.

* will reactivate its potash projectin Argentina's Mendoza province in the medium term, but the mine will annually produceonly 1.5 million tonnes rather than the 4.3 million tonnes initially planned, La Política reported. As a result, the companywill no longer build a railway line to the Atlantic and it has started to sell offrails and other construction equipment.

* TheMinas Gerais labor ministry on Tuesday issued23 infractions, at 5,000 Brazilian reais each, against Samarco Mineração SA, as a result of inspections to the November2015 tailings spill at the Samarcoiron ore mine in Brazil. The audit concluded that the environmental disaster isthe result of a combination of structural problems and serious operational failuresdating back to the implementation of the dam in 2008, O Globo reported.

* Ata shareholder vote, 97.87% of votes cast were in favor of a debt restructure forAtlas Iron Ltd., whichwill result in the company's lenders securing a 70%-ownership of the company's shares,The Australian Financial Review reported.In exchange, the company's Term Loan B debt would be trimmed down to US$135 millionfrom US$259.3 million, the maturity deferred to April 2021 and the interest ratedecreased.

* 's net lossfor the first quarter increasedto 482.3 million Chinese yuan from the 316.7 million yuan posted in same quarterof 2015. The widened net loss is in line with its previous guidance of between 450million yuan and 500 million yuan

* reported asignificant improvement in its earnings, posting a first-quarter net loss of US$13.6million, or 8 U.S. cents per share, downfrom a US$306.3 million net loss in the same period of 2015, which included a US$256.3million charge to write-off the company's investment in Magnetation LLC.

* Japan'sJFE Holdings Inc. posteda net income attributable to owners of the parent of ¥33.66 billion, or ¥58.36 pershare, in fiscal 2015, representing a 75.8%decline on a yearly basis. The figure, however, beat the company's earlierforecast of ¥25 billion, or ¥43.35 per share. Net sales for the 12-month periodamounted to ¥3.431 trillion, down 10.9% from a year ago.

* Twosources with knowledge of the matter said the sale of Anglo American Plc's coal mines in South Africa is beinghamperedby Eskom Holdings SOC Ltd.'s bid to transform the ownership model for coal mines,Bloomberg News wrote. An Eskom executive suggested last week that Anglo Americanshould surrender its mining rights to the state and uncertainty over what type ofoff-take deals the utility would give the new owners will prolong the process. Accordingto sources, Pembani Group, SibanyeGold Ltd. and Royal Bafokeng Holdings Ltd. are among the shortlistedbidders for operations that supply Eskom with more than a quarter of its coal.

* Moody'sconfirmed the Ba1 corporate family ratings and Ba1-PD probability of default ratingsof three Russian steel/mining companies, OJSCNovolipetsk Steel, PAOSeverstal and PJSC MMCNorilsk Nickel. At the same time, Moody's upgraded 'CFR to Ba1 from Ba2 and PDR to Ba1-PD from Ba2-PD. The outlook on all the ratingsis negative.

* TheBritish government, which already tabled an offer to entice potential bidders forTata Steel Ltd.'s troubledU.K. operations, has urged the company to consider accepting the government's financialsupport to keep its Port Talbot operations running, the Financial Times reported.

* exercised a call option to buy back a 9.1% stake in the potash project inRussia from Eurasian Development Bank. Following the transaction, the company'sstake in project operator CJSC VerkhnekamskPotash Co. will amount to 60.1%.

* Steelmills in China's Hebei province, which were previously ordered to be shut down,will be banned from restartingoperations. The provincial government plans to penalize steel mills that reopenand dismiss officials who are found to be involved in allowing companies to resumeproduction.

* Expressingconcern over the rise in speculative trading in iron ore futures in China, GoldmanSachs Group said daily iron ore volumes are now exceedingannual imports. Volumes trades on the Dalian Commodity Exchange in particular increasedby more than 400% from a year ago, The AustralianFinancial Review reported.

SPECIALTY

* MacarthurMinerals Ltd. appliedfor an additional five exploration licenses in the Pilbara region of Western Australia,expanding its total tenement area to 1,379 square kilometers. The new license applicationscover an area of 185 square kilometers with numerous occurrences of lithium, tantalum,tin and beryl.

* Eugenio Ponce Lerou, brother of the largestcontrolling shareholder of SociedadQuimica y Minera de Chile SA, Julio Ponce Lerou, was appointedmember of the SQM board at the shareholders' meeting, Diario Financiero reported. The company's new chairman will be electedbetween April 27 and 28, following the resignation of Juan Antonio Guzman

* saidits three Sierra Leone explorationlicenses have been renewed. The licenses include Baja, Moa, and .

* entered intoan option agreement to acquirea 90% interest in the Donnelly lithium project, located in Western Australia's Greenbushesmineral field.

* a 100% interest in an additional30 units in two claims at its Wisa Lake lithium project in Ontario, through staking.

* 76 additional claims, or 4,142hectares, for potential lithium on its western boundary at Troilus, Quebec.

INDUSTRY NEWS

* Accordingto South Africa's Solidarity union, more than 29,000 jobs in the country's miningsector, as well as 8,000 in the metal and engineering industry are at risk as companieslook to cut costs due to the commodity rout, City A.M. reported.

* Environmentalistscriticized Nova Scotia's proposed overhaul of mining rules, arguing that such amove is not enough to prevent mining on privately protected lands, Mining.com reported.The government, however, says the new act will make managing exploration licenseseasier and cost effective.

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