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Rio Tinto considering IPO for Canadian iron ore unit


Essential IR Insights Newsletter - April 2023


Masters of Risk | Episode 2: A Discussion with Ilya Khaykin


According to Market Intelligence, April 2023


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Rio Tinto considering IPO for Canadian iron ore unit


Rio Tinto mulls IPO of Canadian iron ore unit

Rio Tinto is said to be considering an IPO of its 59%-owned Canadian iron ore mining unit, Iron Ore Co. of Canada Inc., on the Toronto Stock Exchange, Reuters reported, citing banking and industry sources. The company intends to focus on its Australian operations.

ThyssenKrupp swings to net loss in fiscal Q3 on higher taxes

ThyssenKrupp AG swung to a group net loss attributable to shareholders of €131 million in its fiscal third quarter from a net profit of €120 million a year ago amid additional project expenses of about €200 million in its industrial solutions segment. Net sales grew 2% to €11.12 billion while adjusted EBIT fell 46% to €332 million.

Regulators greenlight phase 2 at Teck's Quebrada Blanca copper mine in Chile

Regulators approved the second phase of operations at Teck Resources Ltd.'s Quebrada Blanca copper mine in Chile, which will increase output from the mine to 300,000 tonnes of copper equivalent per year for the first five years, with a 25-year initially permitted mine life. A construction decision is expected in the fourth quarter, the company said.


* Glencore PLC would prefer share buybacks over deal-making as the market remains volatile, Reuters reported. "Right now, buybacks may be the best returns we can get," CEO Ivan Glasenberg said. "We just don't see anything out in the market. We look opportunistically at M&A." Glasenberg said the company is reluctantly paying higher taxes in the Democratic Republic of the Congo under the country's new mining code, but the industry is looking at the option of filing legal action against the DRC, Reuters wrote.


* Codelco plans to invest US$4.88 billion to convert its open-cast Chuquicamata mine in Chile into an underground facility, Reuters reported. The investment is a scaled-down version of its original plans, driven by fluctuating copper prices and higher operating costs. When combined with previous spending, the announced investment increases its total costs of converting Chuquicamata to an underground operation to US$5.55 billion

* Vedanta Ltd. secured conditional access to its Tuticorin copper smelter in India's Tamil Nadu state from the country's environment court, which will resume hearing the case Aug. 20, Reuters reported. However, operations will remain suspended as the access is only for administrative purposes.

* The workers' union at JX Nippon Mining Metals Corp. and Mitsui Mining & Smelting Co. Ltd.'s Caserones copper mine in Chile said a strike is imminent. Union President Nelson Iribarren said that if the operator Minera Lumina Copper Chile SA does not improve its contract offer by Aug. 10, a strike will begin Aug. 14.

* Barrick Gold Corp. said the company's copper operations in Saudi Arabia are not likely to be affected by the current diplomatic dispute between Canada and the Kingdom, The Globe and Mail reported. "Over the past four years, we have developed a strong partnership with Ma'aden, working side by side at our Jabal Sayid joint venture, and we expect that partnership will continue to deepen over time," Barrick spokesperson Andy Lloyd said.

* New Century Resources Ltd. started operations at the Century zinc mine in Queensland, Australia, with the initiation of hydraulic mining operations at the site.


* Hecla Mining Co. swung to a net profit of US$11.9 million in the second quarter from a year-ago loss of US$24.2 million as sales climbed to US$147.3 million from US$134.3 million. The company recorded a gain on base metal derivative contracts of US$16.8 million in the quarter, compared to a year-ago gain of US$2.5 million.

* Randgold Resources Ltd.'s second-quarter profit attributable to shareholders dropped to US$52 million from US$84 million a year ago. Gold sales slipped to US$411.5 million, from US$422.1 million a year ago, due to lower sales volumes, partially offset by higher sales prices.

* A group of investors led by private equity firm EMR Capital Group agreed to sell a 95% stake in the Martabe gold mine in Indonesia in a deal valuing the operation at US$1.21 billion, including assumed debt, The Australian Financial Review reported. Deal Street Asia reported that Indonesia's PT Danusa Tambang Nusantara is buying the mine.

* Newcrest Mining Ltd. expects to record a noncash, posttax impairment of US$260 million to US$270 million for its fiscal 2018 due to a reduction in the carrying values of the Telfer and Namosi mines. Meanwhile, the company's free cash flow for the year ended June 30 is expected at about US$600 million.

* Torex Gold Resources Inc. produced 78,796 gold ounces in dore and 1,300 ounces in carbon fines in the second quarter. Gold sold for the quarter totaled 77,646 ounces for total proceeds of US$101.1 million

* Caledonia Mining Corp. PLC recorded a year-over-year surge in second-quarter net profit attributable to shareholders to US$2.6 million from US$694,000.

* Global gold production grew for a ninth consecutive year in 2017, reaching an all-time high of 106.5 million ounces. With most companies meeting their guidance as of midyear and with a slate of new mine openings, S&P Global Market Intelligence expects production to rise further this year to 108 Moz.

* Doray Minerals Ltd. said it is conducting a standard re-entry at the Deflector gold-copper mine in Western Australia to ensure there are no further hazards at the site before restarting operations. Operations at the mine were temporarily halted due to a fire involving an underground loader.

* Franco-Nevada Corp. booked net income of US$53.6 million in the second quarter, up from US$45.6 million in the year-ago period, driven in part by higher revenues from its oil and gas assets. Oil and gas revenues surged 136.5% on a yearly basis to US$22.7 million, reflecting additional contributions from the SCOOP/STACK, Midland, Delaware and Orion royalties, higher prices, and increased payments from the Weyburn operation.

* IAMGOLD Corp.'s attributable gold production in the second quarter slipped to 214,000 ounces from 223,000 ounces in the year-ago period. The drop was attributed to lower throughput at the Rosebel mine in Suriname and the Essakane mine in Burkina Faso resulting from planned mill maintenance and to lower head grades at the Westwood mine in Quebec, but the drop was partially offset by higher throughput at its joint venture operations.

* Pan American Silver Corp. lowered its full-year cash cost guidance to between US$2.80 per ounce and US$3.80/oz after cash costs in the second quarter fell to a record low of 92 U.S. cents/oz. The Canadian miner's silver production in the quarter was steady on a yearly basis at 6.3 million ounces of silver, and gold output rose to 53,370 ounces from 37,710 ounces.

* Royal Gold Inc. swung to an attributable net loss of US$113.1 million for its full fiscal 2018 from a profit of US$101.5 million a year ago. Earnings were hurt by a US$239.1 million noncash impairment related to the Pascua-Lama mine in Argentina.

* Bauba Platinum Ltd. signed an off-take agreement to supply 240,000 tonnes of run-of-mine chrome ore from its Moeijelijk mine in South Africa to Gerald Metals SA and Pelagic Resources Pty. Ltd., Mining Weekly reported.


* Evraz PLC's first-half attributable net profit soared to US$1.11 billion from US$53 million a year ago. Consolidated revenue for the period grew 24% to US$6.34 billion due to higher prices for semifinished and construction steel products. The company declared an interim dividend of 40 U.S. cents per share, up from 30 cents per share a year earlier.

* Exxaro Resources Ltd. expects first-half attributable EPS to jump up to 54% on a yearly basis.

* China Coal Energy Co. Ltd.'s 800 million Chinese yuan debt offering will be listed on the Shanghai Stock Exchange on Aug. 10. It will use the proceeds to repay bank loans.

* Baoshan Iron & Steel Co. Ltd. launched an offering of short-term bonds valued at 2 billion Chinese yuan to repay bank loans.

* Ukraine-focused iron ore pellets-maker Ferrexpo PLC increased its 2017 pre-export finance credit facility to US$400 million from US$195 million and extended the tenor to four years from three.

* United Co. Rusal PLC could be forced to shut down more of its output if U.S. sanctions are not lifted, Reuters reported, citing two sources. The company's export-bound production of alloys and value-added products could be halted as early as September. "If sanctions are not lifted in the near future, then contracts will expire and from Oct. 1, all of the company's production, intended for the external market, will once again go into the warehouses," a source said.

* A federal court in Minas Gerais, Brazil, formally approved an agreement between BHP Billiton Group, Vale SA, their joint venture Samarco Mineração SA and other parties to settle a 20 billion reais civil claim related to the Samarco tailings dam failure. Separately, BHP reached a settlement over a class-action lawsuit in the U.S. in connection with the accident. The mining major agreed to pay the plaintiffs US$50 million, with no admission of liability.

* Gerdau SA's net income in the second quarter jumped 830.7% to 698 million Brazilian reais, from 75 million reais the year before. Adjusted EBITDA was up 56.8% to 1.76 billion reais from 1.12 billion reais, and the steelmaker said it was the best quarterly EBITDA result since 2008.

* Sumitomo Metal Mining Co. Ltd.'s attributable profit rose 24.1% year over year to ¥28.91 billion in the first quarter of its fiscal 2018. The company's net sales jumped 14.5% to about ¥241.98 billion.

* Adani Enterprises Ltd.'s net profit attributable to shareholders in the first quarter of its fiscal 2019 climbed to 1.69 billion Indian rupees, or 1.54 rupees per share, from a year-ago net profit of 1.59 billion rupees, or 1.45 rupees per share. Revenue from operations slipped to 79.54 billion rupees, compared to 85.48 billion rupees in the first quarter of its fiscal 2018.

* Roy Hill Holdings Pty. Ltd. intends to boost production capacity soon at its Roy Hill iron ore mine, railway and port to 60 million tonnes per annum, The Australian reported, citing CEO Barry Fitzgerald. Roy Hill is producing at a nameplate capacity of 55 million tonnes per year and is awaiting approval to move to 60 million tonnes.


* Chilean lithium miner Sociedad Quimica y Minera de Chile SA said it would overtake Albemarle Corp. as the world's top lithium producer by 2022, with output capacity expected to increase to 28% of the world's total against the U.S.-based lithium producer's 16%, Reuters reported, citing Vice President Daniel Jimenez.

* Mountain Province Diamonds Inc. swung to a second-quarter net loss of US$6.3 million, or 3 U.S. cents per share, from a profit of US$7.6 million, or 5 cents per share, a year ago, due to foreign exchange losses. Sales for the period increased to US$99.1 million from US$27.6 million.

* Lucara Diamond Corp. recovered 81,507 carats of diamonds from the Karowe mine in Botswana at operating costs of US$220 per carat sold, increasing from 57,624 carats recovered in the year-ago period. Revenue from the mine fell to US$64.5 million from US$79.6 million.


* Indonesia unveiled new tax regulations intended to provide legal certainty for mining companies that are shifting current contracts to special mining permits, Reuters reported. The new rules include a 25% corporate tax, in line with the country's current rate, a 4% levy on net profit going to central government and a 6% levy to local government. The move could help Freeport-McMoRan Inc. and the Indonesian government conclude a US$3.85 billion agreement related to the giant Grasberg copper-gold mine. Freeport had indicated it wanted some guarantee on fiscal terms before agreeing to the complex deal.

* China fired back in its growing trade dispute with the U.S., announcing 25% tariffs on US$16 billion of American exports, including coal, oil products and liquefied petroleum gas.

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