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In This List

Swiss prosecutors not targeting Rio Tinto in Mongolia bribery probe

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020

Report Outlooks of Lithium and Cobalt

Essential Metals & Mining Insights July 2020


Swiss prosecutors not targeting Rio Tinto in Mongolia bribery probe

TOP NEWS

Report: Swiss prosecutors not targeting Rio Tinto in Mongolia bribery probe

Swiss prosecutors are not investigating Rio Tinto in connection with bribery allegations related to the Oyu Tolgoi copper-gold project in Mongolia, the Financial Times reported, citing a letter from the Swiss Office of the Attorney-General. This follows a statement by Rio Tinto CEO Jean-Sebastien Jacques to Bloomberg News that Swiss authorities did not make any contact with the company. "Currently, the investigation is directed neither against your client nor against any of client's employees," the letter read.

Debt-free Rio Tinto is within reach as coal divestments beat analysts forecasts

Rio Tinto was able to generate proceeds of more than US$11 billion through asset sales over the past five years, giving the company the option of becoming debt free, The Australian Financial Review reported. The mining giant's net debt stood at US$3.8 billion as of Dec. 31, 2017. The latest deal brings Rio Tinto's proceeds from the recent Queensland coal sales to US$4.15 billion, whereas analysts had expected the mining giant to net between US$1.7 billion and US$2.2 billion for the entire business. UBS said the US$2.25 billion sale of Kestrel appeared to have factored in long-term coal prices of US$170/tonne, which analysts called "impressive."

ICL closes US$1B sale of noncore units, flags US$840M capital gain in Q1

Israel Chemicals Ltd., or ICL, completed the sale of its fire safety and oil additives business units to SK Capital for about US$1 billion. As a result, the company expects to book a capital gain of about US$840 million in the first quarter. ICL intends to use the proceeds to cut its debt and create resources to realize growth opportunities.

DIVERSIFIED

* Rio Tinto accepted €431.6 million of its euro-denominated notes due 2020 and 2024 for purchase as part of measures to cut its gross debt by about US$2.25 billion.

* Vale SA may decide on its new dividend policy March 29. Under the new policy, payouts may be tethered to EBITDA, allowing the company to distribute 30% to 50% of the profits, Reuters cited a report by Brazilian newspaper Valor Econômico. The miner, meanwhile, agreed to repurchase around US$781.0 million of 4.375% guaranteed notes due 2022.

BASE METALS

* Jiangxi Copper Co. Ltd.'s attributable net profit rose to 1.60 billion Chinese yuan in 2017, up from 784.1 million in 2016, while revenue increased to 205.05 billion yuan from 202.31 billion yuan.

* Trek Metals Ltd. executed a share sale agreement to acquire 100% of the Kroussou zinc-lead joint venture project in Gabon from Battery Minerals Ltd.

* S&P Global Ratings affirmed Nexa Resources Perú SAA's BB+ corporate credit and issue-level ratings, with a stable outlook, reflecting the expectation that the company's operations will remain resilient over the next 12 months. The rating agency expects higher zinc production in the next 12 months at the Pasco operations to offset the declining output at the Cerro Lindo mine.

* Ardea Resources Ltd.'s pre-feasibility study for the Goongarrie nickel-cobalt project in Western Australia confirmed the economic viability of the open pit operation under two different autoclave throughput scenarios.

PRECIOUS METALS

* DRDGold Ltd.'s shareholders approved the deal proposed by Sibanye Gold Ltd. to swap some of the latter's assets for a 38% stake in DRDGold.

* Eastern Platinum Ltd. said its tailings facility at the Crocodile River platinum mine in South Africa is expected to generate first revenue in the third quarter, Mining Weekly reported, citing a company statement.

* Petropavlovsk Plc's profit in 2017 jumped to US$41.5 million, from US$31.7 million in 2016, due to an increase in operating profit and a US$34.6 million benefit from capitalized interest, partially offset by a US$29.2 million effect due to deferred taxation. The company's revenue increased 9% year over year to US$587.4 million on higher gold sales volumes and prices.

* Western Australia's gold sector is bracing for another attempt by the state government to lift the royalty rate in 2019. Such a rise was ruled out for the 2018 budget but the door was left open down the line. Association of Mining and Exploration Cos. CEO Warren Pearce told S&P Global Market Intelligence that the industry hopes the government will not change the current royalty regime.

* Kinross Gold Corp. may soon make a decision regarding the restart of operations at its La Coipa gold-silver mine in Chile, as the company awaits the remaining permits to resume mining by July, Mining.com reported.

* Altius Minerals Corp. executed a letter of intent to sell its Sail Pond silver-copper-lead-zinc project in Newfoundland to privately held explorer New Found Gold Corp.

* Rox Resources Ltd. released a JORC-compliant resource estimate for its Mount Fisher gold project in Western Australia. At a minimum gold cutoff grade of 0.8 g/t, the project's total resource stands at 973,000 tonnes grading 2.75 g/t of gold for 86,080 ounces of contained gold.

* IAMGOLD Corp. released an initial resource estimate for the Monster Lake joint venture gold project in Quebec. Using a cutoff of 3.5 g/t of gold and a gold price of US$1,300/oz, the property hosts inferred resources of 433,300 ounces contained within 1.1 million tonnes grading an average 12.14 g/t of gold.

* Davenport Resources Ltd. estimated a maiden inferred resource at the Johnnies Reward deposit, part of the Southern Cross Bore gold project in Australia's Northern Territory. The estimate totals 2.2 million tonnes at 1.4 g/t of gold equivalent for 101,000 contained gold equivalent ounces.

* Pan African Resources Plc posted a 100% increase in mineral resource at the Royal Sheba project, part of its Barberton gold operation in South Africa, to 720,000 contained ounces. The project hosts 5.9 million tonnes at 3.8 g/t of gold, compared to the previous estimate of 2.60 million tonnes at 4.32 g/t of gold for 360,000 contained ounces. Meanwhile, Barberton is on track to produce about 50,000 ounces of gold in the second half, about a 23% increase from first-half output.

* Metminco Ltd.'s share price in afternoon trading on the ASX surged 40% after it announced a successful raising of about A$152,640 through the issue of 19,080,045 new ordinary shares. The company plans to use the funds for exploration activities, retiring the Redfield convertible note, paying creditors and for general working capital.

* Barrick Gold Corp. founder and chairman emeritus Peter Munk passed away.

BULK COMMODITIES

* Russian fertilizer producer PJSC Acron posted an increase in revenue in the fourth quarter of 2017 to US$429 million from US$356 million in 2016. EBITDA for the period climbed to US$140 million, up from US$119 million. A lower average dollar to Russian ruble exchange rate weighed heavily on Acron's net profit in 2017, which dropped significantly year over year to US$244 million, from US$381 million in 2016.

* Citic Ltd.'s total dividend for 2017 increased 9% year over year to 36 Hong Kong cents per share, after a final dividend of 25 cents per share was declared. The company recorded a profit attributable to shareholders of HK$43.90 billion in the year, compared to HK$43.15 billion in 2016. The results were impacted by a noncash impairment charge of HK$7.2 billion on the Sino-Iron project in Western Australia.

* ArcelorMittal concluded its share buyback program, repurchasing 7 million shares for about €184.3 million, equivalent to about US$226.5 million, with per-share prices averaging at €26.34.

* Noble Group Ltd. said its restructuring plan was accepted by creditors holding 55% of its existing senior claims. The plan needs approval from 75% of the existing senior creditors as well a majority of shareholders. Meanwhile, the company has decided to extend the deadline for subscriptions to April 11.

* Adani Enterprises Ltd. abandoned the 2020 target date to start coal mining at the Carmichael project in Queensland, Australia, as the company struggles to secure project funding, Bloomberg News reported. First coal production and supply from the project is now expected in 2021, according to a source.

* The government of Queensland, Australia, may lose A$500 million in royalties per year, as Aurizon Holdings Ltd.'s revised maintenance plan is expected to reduce coal exports by A$4 billion, or up to 20 million tonnes per year, Mining Weekly reported. The Queensland Resources Council said that relative to Cyclone Debbie in March 2017, the new maintenance plan would have double the impact on the resources sector in terms of its capacity to export coal and generate royalties.

* The U.S. has hinted that any cap imposed on steel imports from Australia would be more generous than import limits placed on major metal producers in South Korea and some other countries, The Australian Financial Review reported. "We have a surplus with Australia right now and we feel like trade with them is fairly balanced and the agreement is working well," a U.S. official said.

* U.S. Trade Representative Robert Lighthizer said the government will give China a 60-day window before the US$50 billion tariffs on Chinese goods take effect, adding it would take years to bring the trading relationship between the countries "to a good place," Reuters reported.

* China's retaliatory tariffs on U.S. imports could expand to include more iron, steel and aluminum products if trade tensions with the U.S. escalate. In 2017, metals imports from the U.S. to China totaled US$1.72 billion covering 209 groups — including iron and steel, aluminum, and nickel products, according to data from Panjiva Research, a global trade and logistics information data firm owned by S&P Global Inc.

* Separately, China's state-owned Global Times wrote that the country is ready to release its list of retaliatory tariffs on imports from the U.S. in response to the list of tariffs on Chinese products, which is expected to be released soon. The report noted that the U.S. list will have a strong impact on Washington. "Compared to China's list, the U.S. list hurts itself more than China," the newspaper wrote.

* India is seeking exemption from the recently imposed tariffs on the imports of steel and aluminum by the Trump administration, saying the country's exports of the two products did not pose a security threat to the U.S., Reuters reported, citing government officials.

* A planned merger of ThyssenKrupp AG and Tata Steel Ltd.'s European steel units face another challenge as German unions are opposing a labor agreement, which guaranteed that Tata's Netherlands-based division could continue to operate as an independent company under the venture with control over its own profits and an independent supervisory board, Reuters reported. "It is not acceptable that only we in Germany are to be responsible for the risks of the joint venture and the Dutch entity is dodging responsibility," said Tekin Nasikkol, a ThyssenKrupp supervisory board member.

* The Middle East is shaping up as a niche and "badly underserviced" prize for aspiring Australian high-grade iron ore producers amid evolving changes in China's market, but the high CapEx costs of developing such pelletization projects could see the big boys muscle in ahead of them.

* Australian Pacific Coal Ltd.'s pre-feasibility study for the Dartbrook coal mine in New South Wales, Australia, outlined the technical and financial capability of the 25-year open cut operation under both owner-operator and contractor cases. Under the owner-operator case, net present value, discounted at 10%, is estimated at A$1.34 billion, with an internal rate of return of 23.2% and a payback period of five years.

* S&P Global Ratings revised the global scale outlooks on Gerdau SA and Gerdau Ameristeel Corp. to stable from negative and affirmed the BBB- corporate credit ratings. The outlook revision is due to the company's efforts to sell noncore assets, which will total 3.1 billion Brazilian reais and be used to pay down debts.

SPECIALTY

* Nemaska Lithium Inc. signed a nonbinding term sheet for US$150 million related to a streaming agreement as it seeks to raise between US$775 million and US$825 million to build the Whabouchi lithium project in Canada. Nemaska did not name the other party to the potential deal, only describing it as "an international financial institution of good standing" and said it was in the process of negotiating a definitive agreement.

INDUSTRY NEWS

* The number of fatalities at South African mines reached 22 this year, Bloomberg News reported. Mining deaths increased for the first time in a decade to 88 in 2017, up from 73 in 2016, according to the country's Department of Mineral Resources.

S&P Global Market Intelligence and S&P Global Ratings are owned by S&P Global Inc.

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