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Vale posts US$1.78B Q1 net income; Rio Tinto may approve Oyu Tolgoi expansion next week; Potash Corp. Q1 net income tumbles to US$75M

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


Vale posts US$1.78B Q1 net income; Rio Tinto may approve Oyu Tolgoi expansion next week; Potash Corp. Q1 net income tumbles to US$75M

TOP NEWS

Valeback in the black with US$1.78B Q1 net income

Vale SAbouncedback in the black, posting a net income of US$1.78 billion in the first quartercompared to a net loss of US$3.12 billion in the same period of 2015. Net operatingrevenues fell by 5.5% to US$5.72 billion as a result of seasonally lower sales volumeof iron ore fines, base metals and fertilizers, which were partially offset by highersales prices for iron ore fines. Underlying earnings for the period totaled US$514million or 10 cents per shares, compared to an underlying loss of US$679 millionlast year. However, the company's total net debt for the quarter rose by 1.7% toUS$27.66 billion due to forex impacts and a negative free cash flow in the quarter.

RioTinto appears ready to approve US$4B Oyu Tolgoi expansion

The Australian wrotethat Rio Tinto appearsreadyto approve the US$4 billion expansion of the Oyu Tolgoi copper-gold mine in Mongolia as earlyas next week, citing the company's earlier statement that it is on track for a June-quarterdecision on the expansion. According to analysts, the approval of the expansioncould add US$4.7 billion of value to the company.

Potash Corp. cuts output, earnings guidance as Q1 net income tumblesto US$75M

Potash Corp. ofSaskatchewan Inc. loweredits expectations for 2016 potash sales volumes to a range of 8.3 million tonnesto 8.8 million tonnes as the company reduced production in response to weaker demand.The company also slashed its full year earnings guidance to between 60 cents and80 cents per share, and cut its CapEx budget for the year by about US$100 million.Potash Corp.'s net income in the first quarter plunged to US$75 million from US$370million in the same period of 2015.

DIVERSIFIED

* Anglo AmericanPlc agreed to sellits niobium and phosphates businesses in Brazil to China Molybdenum Co. Ltd. for a total cash considerationof US$1.5 billion. According to Anglo American CEO Mark Cutifani, the company willuse the proceeds of the transaction to help reduce the company's net debt to itstarget level of below US$10 billion by the end of the year.

* Rio Tintorevealed what it is willing to payfor its planned US$1.5 billion debt buyback. The mining heavyweight plans to buyback its 2% notes due 2017 for US$1,006.91 and its 1.625% notes due 2017 for US$1,005.85per US$1,000 principal amount. There is currently US$500 million worth of 2% notesdue 2017 and US$1.25 billion worth of 1.625% notes due 2017 outstanding.

* Moody's upgradedRussian diamond mining company PJSCALROSA's corporate family rating to Ba1 from Ba2 and probability ofdefault rating to Ba1-PD from Ba2-PD. The outlook on these ratings is negative.Moody's also confirmed the Ba2 CFR and Ba2-PD PDR of OAO Holding Co. METALLOINVEST and the Ba3 CFRs and Ba3-PDPDRs of SUEK plc and . The outlook is stableon METALLOINVEST's and SUEK's ratings, and positive on Nord Gold's ratings.

BASE METALS

* Herencia ResourcesPlc said it is running outof working capital, after its proposed joint venture partner Next Mineralshas dropped out of an agreement to acquire a controlling stake in the copper project inChile. Herencia has withheld a US$290,000 option payment due on the Picachos licensebut will only have sufficient working capital to survive until early or end May,depending on whether or not it will renew the Picachos option.

* The Australian wrotethat Rio Tinto appears readyto approve the US$4 billion expansion of the Oyu Tolgoi copper-gold mine in Mongolia as earlyas next week, citing the company's earlier statement that it is on track for a June-quarterdecision on the expansion. According to analysts, the approval of the expansioncould add US$4.7 billion of value to the company.

* Freeport-McMoRanInc. informed some Chinese smelters that it will halvethe volume of copper concentrate deliveries under long-term contracts in 2017 onthe back of an expected fall in the company's attributable output from certain U.S.and South American mines, Metal Bulletinwrote citing two of Freeport's Chinese customers.

* The board of PJSCMMC Norilsk Nickel proposed a dividend payment of 230.14 Russian rublesper common share for its fiscal year 2015, adrop of about 65.7% from the dividend of 670.04 rubles per ordinaryshare recommended for fiscal year 2014.

* Shenzhen ZhongjinLingnan Nonfemet Co. Ltd. recorded a net loss attributable to shareholders of 52.9 million Chineseyuan, or 2 fen per share, in the first quarter, in line with the company's guidanceof a loss of between 45 million yuan and 55 million yuan and compared to a net profitof 58.2 million yuan, or 3 fen per share, posted in the same quarter of 2015.

* Grupo México SAB de CV's first quarter net profit year over year to US$406.9million due to higher metals production and a significant improvement in investmentgains, Reuters reported. Revenue fell 7.8% to US$1.9 billion amid lower prices forsome of its key commodities, including copper and silver.

* Southern CopperCorp. posted a net income of US$185.1 million in the first quarter,down 34.5% from the US$282.4million recorded in the same quarter in 2015 due to lower metal prices. The companyhit a record copper output of 221,661 tonnes in the first quarter, up 24.8% fromthe 177,616 tonnes produced in the previous year, mainly due to a 67.6% increasein the output of the Buenavistamine in Mexico to 43,898 tonnes.

* Chilean copper commission Cochilco keptits copper price forecast for this year at US$2.15 per pound, while it projectedthe price to reach US$2.20 per pound in 2017. Meanwhile, Cochilco expects Chile'scopper production to reach 5.77 million tonnes this year, almost the same levelwith 2015's, La Tercera reported.

* The Federal Circuit Court of Australia ruled in favor of QueenslandMining Corp. Ltd. over the bankruptcy petition against its former managingdirector Howard Renshaw. The court heard the petition April 27 and ordered a sequestrationorder over Renshaw, declaring him bankrupt effective the same day.

* KAZ MineralsPLC produced 21,500 tonnes of copper cathode equivalent in the firstquarter, with output on trackto achieve this year's guidance. Copper cathode sales for the quarter was reportedat 23,000 tonnes.

* Lundin MiningCorp. swungto a net loss attributable to company shareholders of US$22.1 million for the quarterended March 31 from a net profit of US$71.8 million posted a year ago, attributingit to the lower metal price environment. Sales for the corresponding period, meanwhile,totaled US$369.6 million, down from US$531.5 million in the previous year.

PRECIOUS METALS

* Goldcorp Inc.booked net earnings of US$80 million for the first quarter, improving its bottom line from the US$87 million loss itreported a year earlier. The year-over-year improvement was due to lower CapEx withthe completion of the construction of the Eleonore gold mine in Quebec and Cerro Negro gold mine in Argentina

* PetropavlovskPLC signed a deal to acquireAmur Zoloto — a gold mining company with assets in Russia's far easternKhabarovsk region — for US$144 million in new Petropavlovsk shares.It also reported results for the 2015financial year, showing a narrower net loss of US$297.5 million on revenuethat fell to US$599.9 million from US$865.0 million a year earlier. The group expectsgold output to rise 10% to 20% per year on average from 2017 to 2020.

* IndependenceGroup NL witnessed a slumpin gold output from its jointly owned Tropicanagold mine in Western Australia during the March quarter, slipping to 101,038 ouncesduring the quarter from 122,319 ounces in the same quarter of 2015. Independence's30% share of production amounted to 30,311 ounces.

* OceanaGold Corp.achieved consolidatedgold production of 122,782 ounces in the first quarter from 119,500 ounces in theprevious quarter, with record quarterly gold production of 46,811 ounces at theDidipio operation in the Philippines.

* B2Gold Corp.produced 127,844 ounces of gold in the first quarter, up 10% year over year and beating the company's target by8,966 ounces. The company expects consolidated gold production for the year to bebetween 510,000 ounces and 550,000 ounces at cash operating costs of between US$560to US$595 per ounce, compared to US$616 per ounce in 2015.

* New Gold Inc.reported net earnings of US$26.8 million in the first quarter, from a net loss of US$43.8 millionbooked in the comparable 2015 period, as a result of noncash foreign exchange movements.The company produced 90,811 ounces of gold during the period, which remained inline with 2015 as slightly higher output from its New Afton, Mesquite and Peakmines partially offset planned lower output from Cerro San Pedro.

* Detour Gold Corp.repurchased US$75 millionworth of its convertible notes after returning to profit in the first quarter. TheCanadian producer bought back the notes from Paulson & Co. Inc. for US$76.9million, plus accrued and unpaid interest of US$1.7 million, using existing cashon hand. The move comes at the same time Detour Gold revealed a net income resultof US$27.6 million for the first quarter, reversing the US$63.1 million net lossin the same quarter in 2015.

* Kinross GoldCorp. subsidiary Compañía Minera Maricunga SA has filed an administrativeappeal against a March ruling by environmental regulator SMA ordering the goldmine to shut down its pumping wells in Chile's Atacama region. Maricunga claimsthat it is technically and legally impossible to comply with the resolution as itblocks the mine's main source of water to operate, Diario Atacama reported.

* Separately, the Environmental Court of Santiago authorizedthe SMA to order the temporaryclosure of the Maricunga wells for 15 days while it reviews the administrativeappeal filed by the company, Minería Chilenareported.

* Minera FriscoSAB de CV booked an EBITDA of 1.36 billion Mexican pesos for the firstquarter, up7.6% compared with the 1.26 billion pesos recorded in the same period in 2015,El Financiero reported. This was mainlydue to lower costs combined with a strong dollar, which partially offset a decreasein gold production and lower gold prices.

* Royal Gold Inc.plunged to a US$67.7 millionnet loss attributable to shareholders in the third quarter of the 2016 financialyear, from a US$25.0 million net income attributable to shareholders in the sameperiod of fiscal 2015. Impairments totaling about US$99.0 million more than offseta US$19.4 million, or 26%, year-over-year increase in revenue for the quarter.

* Shandong GoldMining Co. Ltd. recorded a netprofit attributable to shareholders of 221.2 million yuan in the firstquarter, compared with a net loss of 68.5 million yuan posted a year ago. Operatingincome increased 10.34% year over year to 9.22 billion yuan, while operating costsincreased just 4.4% to 8.83 billion yuan from 8.46 billion yuan.

* Despite improving silver prices, Endeavour Silver Corp. has kickedoff the process of transitioning its El Cubo silver mine in Mexico to care and maintenance, BusinessNews Americas reported.

* Dynasty Metals& Mining Inc. entered into a definitive three-year agreement with Green Oil SA to actas contractor for the development of specific mining concessions within the gold projectin southern Ecuador.

* Equitas ResourcesCorp. completedits acquisition of Alta Floresta GoldLtd. Equitas now owns, through Alta Floresta, six gold properties withfour production licenses, and over 184,410 hectares of land holdings in the Brazilianstates of Mato Grosso and Para.

* Nord Gold formally launchedan offer to acquire all of the outstanding common shares of it does not currentlyown at a price of 25.3 Canadian cents apiece. The all-cash offer values Northquestat about C$27.3 million on an undiluted basis.

BULK COMMODITIES

* Potash Corp.of Saskatchewan Inc. loweredits expectations for 2016 potash sales volumes to a range of 8.3 million tonnesto 8.8 million tonnes as the company reduced production in response to weaker demand.The company also slashed its full year earnings guidance to between 60 cents and80 cents per share, and cut its CapEx budget for the year by about US$100 million.Potash Corp.'s net income in the first quarter plunged to US$75 million from US$370million in the same period of 2015.

* Vale SAbouncedback into the black, posting a net income of US$1.78 billion in the first quartercompared to a net loss of US$3.12 billion in the same period of 2015. Net operatingrevenues fell by 5.5% to US$5.72 billion as a result of seasonally lower sales volumeof iron ore fines, base metals and fertilizers, which were partially offset by highersales prices for iron ore fines. Underlying earnings for the period totaled US$514million or 10 cents per shares, compared to an underlying loss of US$679 millionlast year. However, the company's total net debt for the quarter rose by 1.7% toUS$27.66 billion due to forex impacts and a negative free cash flow in the quarter.

* The World Bank forecastsiron ore to trade at US$50 per tonne this year, US$51.50 per tonne in 2017 and extendgains to US$56.20 per tonne by 2020, Bloomberg News reported. The new estimateswere higher than the earlier January numbers, in which the bank expected the steelingredient to trade at US$42 per tonne this year, US$44.10 per tonne in 2017 andUS$51 per tonne by 2020.

* Baoshan Iron& Steel Co. Ltd.'s net profit attributable to shareholders for thefirst quarter was reported at 1.53 billion Chinese yuan, down 1.2% compared with the 1.55 billion yuan posted a yearago. Baosteel attributed its continued net profit to the rebound in steel pricesin February and March, as well as cost reductions across the company.

* Nippon Steel& Sumitomo Metal Corp.'s profit attributable to owners of parentdropped to ¥145.42 billionin fiscal 2015, down 32.1% from the ¥214.29 billion the year before. Despite thelower profit, the company announced a dividend of ¥15.00 per share at the end ofthe fiscal year, a major improvement from the ¥3.50 per share announced at the endof the previous fiscal year.

* Maanshan Iron& Steel Co. Ltd.'s net loss attributable to shareholders for thefirst quarter narrowedto 348.2 million Chinese yuan, or 4.5 fen per share, from 595.4 million yuan, or7.7 fen per share, recorded a year ago. Against the still bleak first quarter financialperformance, the company said it nevertheless expected to return to profit in thefirst half as steel prices continued its upward trajectory.

* China Coal EnergyCo. Ltd. posted a netloss of 223.1 million Chinese yuan, or 1.7 fen per share, for the firstquarter, which compares to a net profit of 15.1 million yuan, or 0.1 fen per share,recorded in the same period of 2015.

* Australian BauxiteLtd.'s maiden shipmentof 5,557 tonnes of cement-grade bauxite has left Bell Bay Port in northern Tasmania,Australia, concluding the first sale of bauxite from the company's Bald Hill mine.

* Allegiance CoalLtd. said JOGMEChas withdrawn from theKilmain joint venturein Queensland, Australia, after spending over A$2 million on the coal project. Underthe deal, JOGMEC agreed to provide a A$3 million cash injection over a three-yearperiod to earn a 40% stake.

* Brazil's antitrust body Cade allowedCompanhia Siderúrgica Nacionalto nominate two members to the board of its rival Usinas Siderúrgicas de Minas Gerais SA, where CSN is a shareholder,Reuters reported.

* Alcoa Inc.'sAlcoa of Australia Ltd.venture saw its net profit in 2015 nearlytriple to A$645.5 million from A$215.7 million on the back of its heavy costcutting and decision to mothball the troubled Port Henry aluminum smelter, The West Australian wrote.

* Kenmare ResourcesPlc and chemicals trader King Ally Holdings Ltd. entered into a conditionalsubscription and relationship agreement in which King Ally willinvest US$100 million in the company in exchange for not more than 29.9% ofKenmare's enlarged issued share capital following the completion of a capital restructuring.The restructuring involves an equity fundraising of not less than US$275 million,of which a significant portion would be used to reduce debt.

* British Prime Minister David Cameron said his government isdoingeverything it can to secure a bidder for the sale of Tata Steel Ltd.'s troubled U.K. operations, Reuters wrote.

* However, Tata Steel U.K. CEO Bimlendra Jha said the Britishgovernment will probably have to domore to help find a buyer for the Tata operations in the country, the newswirefurther reported. In a separate news brief, Reuters cited Jha as saying that TataSteel is notprepared to split up its main British assets to secure a buyer for its U.K.operations, but the company might consider selling off small independent assetsindividually.

* Premier AfricanMinerals Ltd. will acquirean initial 52% interest in TCT Industrias Florestais Ltda., owner of a 27-square-kilometerlimestone deposit in the Sofala province of Mozambique, for US$2.1 million.

* Vedomosti reportedthat Russia's coking coal output in 2015 reached58.9 million tonnes — of which OAO Mechel extracted 13.7 million tonnes and , including production onRaspadskaya, produced20.6 million tonnes.

SPECIALTY

* Xiamen TungstenCo. Ltd.'s net profit attributable to shareholders year over year to 20.7 millionChinese yuan, or 1.91 fen per share, in the first quarter.

* BlueRock DiamondsPlc has raised£700,000 through a placing to directors as well as new and existing shareholders,and the funds are to be used to further develop the Kareevlei mine in South Africa.

* Wealth MineralsLtd. signed a letter of intent to secure an option giving it the rightto acquire the Puritama1 to 8 exploration lithium concessions in the Salar de Aguas Calientes area of Chile.

* Noram VenturesInc. completedthe acquisition of a Clayton Valley lithium property in Nevada.

* Globex MiningEnterprises Inc. staked40 claims over a strike length of 10 kilometers in Nova Scotia. Nova Scotia Departmentof Natural Resources personnel discovered a beryl-rich pegmatite on the propertyin 1999, which returned anomalous amounts of beryllium, caesium, lithium, tantalumand rubidium.

INDUSTRY NEWS

* The Chilean mining ministry signed a memorandum of understandingwith China's National Development Reform Commission for the development of newtechnologies in smelting and refining, MineríaChilena reported.

* The Vietnamese government refutedmedia reports that discharge from a newly built steel facility was to blame forthe death of large numbers of fish in farms and coastal waters, Reuters reported."Thus far, through testing and collecting evidence, there is no proof yet toconclude a link between Formosa and the facility to the mass fish deaths,"said deputy environment minister Vo Tuan Nhan.

The Daily Dose is updatedas of 7 a.m. New York time, and scans news sources published in Chinese, English,Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some externallinks may require a subscription.