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Shenzhen Zhongjin FY'15 net profit drops 57.26%; Fitch downgrades Milpo; Top mining executives still appear to be overpaid

Industry Top Trends 2021: Metals and Mining

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


Shenzhen Zhongjin FY'15 net profit drops 57.26%; Fitch downgrades Milpo; Top mining executives still appear to be overpaid

TOP NEWS

Shenzhen Zhongjin FY'15net profit drops 57.26% to 200.9M yuan

ShenzhenZhongjin Lingnan Nonfemet Co. Ltd.'s net profit attributable toshareholders for 2015 dropped57.26% year over year to 200.9 million Chinese yuan from the 470.1million yuan recorded a year ago. Operating income declined 31.07% year overyear to 16.94 billion yuan, among which 6.85 billion yuan was from the domesticmarket and the remaining came from overseas markets. The company said thatreduced operational costs partially offset lower prices of commodities andnonferrous metals in the reporting period.

Fitch downgradesMilpo's issuer default ratings to BBB-

Fitch Ratings 's long-termforeign and local currency issuer default ratings and US$350 million unsecurednotes to BBB- from BBB, with outlook revised to negative from stable. Theseactions followed the downgrade to BBB- and negative outlook of Milpo's ultimateparent, Votorantim SA.

Top mining executivesstill appear to be overpaid

Despite the continued decline ofcommodity prices globally, top executives still appear to be taking homemillion-dollar-plus pay packets. Although the industry is seeing a decline inexecutive salaries, many still questionwhether these numbers are acceptable in the current market.

BASE METALS

* Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd.'s net profitattributable to shareholders for 2015 dropped57.26% year over year to 200.9 million Chinese yuan from the 470.1million yuan recorded a year ago. Operating income declined 31.07% year overyear to 16.94 billion yuan, among which 6.85 billion yuan was from the domesticmarket and the remaining came from overseas markets. The company said thatreduced operational costs partially offset lower prices of commodities andnonferrous metals in the reporting period.

* Fitch Ratings 's long-termforeign and local currency issuer default ratings and US$350 million unsecurednotes to BBB- from BBB, with outlook revised to negative from stable. Theseactions followed the downgrade to BBB- and negative outlook of Milpo's ultimateparent, Votorantim SA.

* VedantaResources Plc entered into irrevocable arrangements with J.P.Morgan Securities plc to buyback up to US$148.6 million, or up to 20%, of the US$743 millionoutstanding principal amount of the 6.75% bonds due 2016 of the company, alongwith up to US$200 million of the US$582 million outstanding principal amount ofthe 5.50% guaranteed convertible bonds due 2016 of .

* Western Areas Ltd. decided to undertake a hefty A$70million capital raising at a time most miners would struggle to raise even ameasly million. But the Australian nickel producer has proven investorconfidence is strong despite the nickel price sitting at a decade low, closingA$60 million placement component of the fundraise .

* Workers at 's copper mine inPeru are going on a two-daystrike on April 8. The workers are claiming that their profit-sharing bonusthis year has nearly disappeared, with each worker to receive an average of 483Peruvian soles this year from the 30,000 soles in 2015, Reuters reported,citing union leader Zenon Mujica.

* China Nonferrous Metals Co. Ltd.'s loss attributable toowners in 2015 widenedyear over year to 580.6 million Chinese yuan from 176.1 million yuan, as thecompany booked lower revenue of 91.0 million and higher impairment losses andinventory writedown of 677.6 million yuan.

* The loss attributable to owners ofChina Daye Non-Ferrous MetalsMining Ltd. in 2015 sankdeeper to 976.3 million yuan from 95.6 million yuan. Revenue, meanwhile,slipped year over year to 39.36 billion yuan from 42.81 billion yuan.

*Shares in PJSC MMC Norilsk Nickelplunged by nearly 3% March 31, after media reports suggested the Russian basemetals producer was preparing to ditch its generous dividend policy in favor ofa market-linked approach that could cut payouts in times of low commodity prices.According to the report, the company was considering a move to a more "" dividendpolicy as a reaction to the significant fall in commodity prices since thepolicy was agreed in 2013.

*Yamana Gold Inc.entered into a copper purchase agreement with concerning theChapada mine inBrazil, pursuant to which Altius will payYamana total advanced payments of US$60 million in cash consideration and400,000 Altius warrants.

*Codelco ChairmanOscar Landerretche said the Chilean state-owned copper mining major will haveto face opening up part of the company at some point to the stock exchange, notnecessarily the local bourse, to finance its internationalization, BusinessNews Americas reported.

* Anupdated preliminary feasibility study on Canadian Zinc Corp.'s Prairie Creek zinc-lead-silver project inCanada's Northwest Territories indicateda posttax net present value, using an 8% discount, of C$302 million, with aninternal rate of return of 26%, based on base case metal price forecasts ofUS$1.00 per pound for both zinc and lead, and US$19.00 per ounce of silver, forthe life-of-mine production.

*Clive Palmer said he does not want a key license required to legally operatehis embattled nickel refinery in Queensland, Australia, igniting concerns thatthe plant will remainshut, The Australian reported.

PRECIOUS METALS

* Classic Minerals Ltd. entered an agreement to its mining interest at theDoherty's goldproject to Perth-based AcceleratedMining Pty. Ltd. for a total consideration of A$4 million. Bysigning the agreement, Classic Minerals granted Accelerated Mining the right toexplore, mine, process and sell the gold ore from the project, subject to a7.5% net smelter royalty to the seller on ore mined by the buyer.

* Real Gold Mining Ltd. swungto a profit attributable to owners of the company in 2015, to 48.5 millionChinese yuan from the 601.9 million yuan loss the previous year. Revenueincreased to 384.6 million yuan from 186.5 million yuan, while cost of salesdecreased to 396.0 million yuan from 451.7 million yuan.

*Giyani Gold Corp. andCrystal Capital Wealth Corp. terminatedthe previously announced indicative letter of intent agreement as it hasexpired. Under the deal, Giyani Gold planned to acquire the Canadian financialservices firm by means of a reverse takeover.

*Following the announcement by KinrossGold Corp. that it is proceeding with the phase one expansion ofits Tasiastgold mine in Mauritania, TD Securities analyst Greg Barnes upgradedthe gold major to "buy" from "hold," the Financial Post reported. According toBarnes, the company is managing both project and balance sheet risk via aphased approach, while also optimizing Tasiast.

*Greek Environment and Energy Minister Panos Skourletis said needs to reach a "compromise"with local communities and the government to proceed with its contentious goldproject in the country, Reuters reported.

*Due to strong demand, SilverWheaton Corp. increased the size of its recently announcedunderwritten public offering and nowplans to raise about US$550 million.

* Ina bid to stimulate platinum demand, ImpalaPlatinum Holdings Ltd. developed a hydrogen-powered forklift truckand refueling station, an important step toward the establishment of acommercially viable hydrogen fuel-cell industry, which uses platinum togenerate power with only heat and water as waste products, Bloomberg News wrote.

*Mandalay Resources Corp.'sChilean subsidiary CompaniaMinera Cerro Bayo Ltd. repurchased the 2% net smelter returnroyalty on silver and gold production from the Cerro Bayo mine held by a subsidiary ofCoeur Mining Inc. Asa result of the transaction, the royalty has been .

*Silver Standard Resources Inc.signed an option agreement to fullyacquire the Perditogold project in California.

BULK COMMODITIES

* Two anti-mining activists chainedthemselves to conveyors at WhitehavenCoal Ltd.'s Narrabricoal mine in New South Wales, AustralianMining reported. A spokesperson for the coal miner said that the protestors'action has "no effect" on the company's operations.

* Standard Bank commodities analyst,Melinda Moore, said that the resumption of Samarco Mineração SA's operations would be decisive indetermining iron ore price projections, ValorEconômico reported.The kickoff of Vale SA'sS11D iron oreproject would also be important, the analyst added.

* TheAustralian Financial Review wrote that Samarco Mineração, citing data from84 monitoring points, claims that the condition of the Doce River was "verysimilar" to that before the bursting of the Fundão dam in November 2015.

* Flinders Mines Ltd. chairman Robert Kennedy urgedshareholders notto accept Todd Corp. Ltd.'sA$38 million offer, saying that the offer undervalues the company by at leastA$26 million, The Australian FinancialReview reported.

* MMX Mineração e Metálicos SA recorded a netincome of 113.7 million Brazilian reais in the fourth quarter of 2015,compared with the net loss of 171.9 million reais reported in the same periodthe previous year, mainly due to adjustments made to its liabilities as part ofits bankruptcy protection plan, ValorEconômico reported.

* Kiu Hung International Holdings Ltd. saw its lossattributable to equity holders in 2015 improveto HK$89.7 million, or 2.95 Hong Kong cents per share, from the HK$509.6million, or 31.58 Hong Kong cents per share, loss recorded a year ago. Nodividend was declared for the year.

*Refuting recent media reports, Vale said itspartner Mitsui & Co. Ltd.is not consideringrevising terms of a coal joint venture in Mozambique.

*Metallurgical Corp. of China Ltd.Vice President Xiao Xuewen said the company will restrain investments in miningoperations and plans to retreatfrom its iron ore business.

*The Bolivian government has inked a 30-month, US$451 million contract to buildthe El Mutuniron and steel project in the country with Sinosteel Equipment, Business NewsAmericas reported.

*After distributing letters to employees instructing them not to return to workthis week, Peabody Energy Corp.confirmed staff reductions at its North Antelope Rochelle coal mine in Wyoming, announcingthat approximately 235 hourly and salaried employees would be .

*Separately, Peabody Energy said it extended the closing deadline for itsproposed sale of assets in New Mexico and Colorado to to allowmore time to explorealternative payment options.

*Continuing a contraction at the country's largest coal mines, announced that it isreducing staff at its BlackThunder mine in Wyoming by about15%, citing "persistent weakness in the thermal coal"market.

*Russia imposed duties on Ukrainian rods as OJSC Novolipetsk Steel Chairman Vladimir Lisin wasunhappy about competition, Vedomosti reported.The Eurasian Economic Commission decided to impose anti-dumping duties onUkrainian rods at a rate of 10.11% for five years. The decision will come intoforce in 45 days. For ArcelorMittalunit ArcelorMittal Kryviy Rih, it will be 9.32% only.

SPECIALTY

* StratMin Global Resources Plc entered into heads ofterms with Bass Metals Ltd.,in which the latter will acquirethe 93.75% stake of GraphmadaMauritius that it does not already own for a staged cash, equityand royalty consideration of up to A$15.3 million.

* Ding He Mining Holdings Ltd.'s loss attributable toowners of the company in 2015 improvedto HK$111.0 million from the HK$279.8 million loss recorded the previous yearas the company trimmed its other operating expenses to HK$13.9 million fromHK$243.8 million.

*Lithium concentrate production has startedat the Mount Cattlinproject, a joint venture between GalaxyResources Ltd. and GeneralMining Corp. Ltd., in Western Australia. The Mount Cattlinprocessing facility is ramping up to a throughput rate of 800,000 tonnes perannum by the end of June.

*Lithium Australia NLwithdrew from thenonbinding memorandum of understanding with EuropeanMetals Holdings Ltd. over the Cinovec lithium-tin project in the CzechRepublic.

*According to Mining Weekly, theIndian government is looking to revise its rare earth mining policy to allowthe auction of at least one rare earth deposit to boostproduction in the short term. A senior official in the country's minesministry said the government is looking to put one deposit up for auction on anexperimental basis.

INDUSTRY NEWS

* Despite the continued decline ofcommodity prices globally, top executives still appear to be taking homemillion-dollar-plus pay packets. Although the industry is seeing a decline inexecutive salaries, many still questionwhether these numbers are acceptable in the current market.

* The public security bureau in Kunmingin China's Yunnan province determinedthat the Fanya Metals Exchange, which closed in 2015 amid investor claims thatit was running a Ponzi scheme involving billions of dollars, illegally used thesavings held by members of the public, Reuters reported.

* Anexclusive report by SNL Metals & Mining Research that in 2015, only four of thetop 10 mining companies by market capitalization beat their S&P Capital IQcalendar-year earnings estimates.

*Hacking now qualifies as a majorrisk for international resource companies, Ernst & Young concludedin its report detailing business risks for resource companies in 2015-2016.

*The respective governments of Burkina Faso and Guinea said mining permits inthe African countries awarded in recent years that are not being used forexploration or production should be made available to other companies viare-auctioning, Reuters reported.

*Goa Chief Minister Laxmikant Parsekar said the government of the Indian statehas decided to auction mining sites in Goa in the future instead of leasingthem out, the Press Trust of India reported.

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.