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Anglo American sees upgrades from S&P on strong H1 performance

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Essential Metals & Mining Insights – February 2021

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Top electric vehicle markets dominate lithium-ion battery capacity growth

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Essential Metals & Mining Insights - January 2021


Anglo American sees upgrades from S&P on strong H1 performance

TOP NEWS

Anglo American sees upgrades from S&P on strong H1 performance

S&P Global Ratings bumped up its long- and short-term corporate credit ratings on Anglo American Plc to BBB-/A-3 from BB+/B with a stable outlook. The upgrade is a result of the company's strong financial performance in the first half of the year, which reflected the rebound in commodity prices, particularly for iron ore and coking coal.

Commonwealth Bank rules out financing Adani's Carmichael coal mine

The Commonwealth Bank of Australia confirmed that it will not lend cash to Adani Enterprises Ltd. for its proposed Carmichael coal mine in Queensland, a move that puts pressure on the Australian government to run out loans of its own, The Sydney Morning Herald reported.

Newcrest announces more sustainable dividend policy as FY'17 profit improves

Newcrest Mining Ltd. committed to returning not less than 15 U.S. cents per share each financial year to shareholders as it looks to achieve a dividend payout that is sustainable over time. The company declared a final 70% franked dividend of 7.5 cents per share for the 2017 financial year, taking the total annual dividend to 15 cents per share, following a 22% year-over-year increase in underlying profit to US$394 million for the year.

DIVERSIFIED

* A majority of Vale SA's preferred shareholders agreed to swap their stock into common shares of the company. A total of 1,420,262,529 preferred shares, equivalent to 72.2% of the total preferred shares in circulation, have been tendered as of Aug. 10, exceeding the minimum 54.09% threshold set for voluntary conversion.

BASE METALS

* BHP Billiton Group is studying whether it can use gold as feed for the Kambalda nickel concentrator in Western Australia as keeping the operation running has been quite challenging due to a lack of nickel ore, Nickel West asset President Eddy Haegel told reporters on the sidelines of Diggers & Dealers Mining Forum in Kalgoorlie, Australia. "At this moment in time, if nothing changes it is likely that we shut the facility," Haegel said.

* IndustriALL Global Union accused Freeport-McMoRan Inc.'s PT Freeport Indonesia and smelter PT Smelting of treating the "fired" workers at Grasberg mine "inhumanely and with contempt" and urged both to reinstate staff and contractors, Reuters wrote.

* Codelco CEO Nelson Pizarro said the Chilean state-owned miner plans to produce sustainable copper cathode in the years to come, Reuters reported. The pilot project is taking place at the company's Gabriela Mistral mine in Chile.

* Volcan Compañía Minera S.A.A. plans to begin operations at its Romina 2 brownfield project in the second half of 2018 or the first half of 2019, Gestión reported, citing the company's investor relations manager. Romina 2 is expected to extend the life of the Alpamarca zinc project and increase Volcan's total annual output by 11% to 30,000 tonnes of zinc.

* Celsius Resources Ltd. acquired an initial 30% interest in the Opuwo cobalt project in Namibia.

PRECIOUS METALS

* Newcrest Mining is weighing its options on whether to inject further cash into expanding its Bonikro mine in Ivory Coast or sell the operation. "We are undertaking a strategic review of Bonikro, which is our asset in Cote d'Ivoire, and pending the outcome of that we'll either retain it and run it or if the proposition is compelling then we'll look to sell it," Managing Director and CEO Sandeep Biswas said.

* M&A activity among South Africa's gold producers is unlikely to pick up in the coming months, as tighter margins and muted cash flow generation have prompted a change in business strategies, according to a report by RBC Capital Markets.

* The average all-in sustaining cost in 2016 for primary gold mines covered by S&P Global Market Intelligence's Mine Economics data remained relatively flat from 2015, due to a drop in fuel, reagents and corporate overhead costs, partially offset by a fall in byproduct credits, increased royalties and a rise in exploration and other costs.

* Ghana's gold output is likely to drop by about 50% this year because of a temporary ban on small-scale mining, which boosted output last year to 4.1 million ounces but was causing damage to the environment, Reuters reported, citing Barbara Oteng-Gyasi, deputy minister of land and mines.

* Spitfire Materials Ltd. signed a binding term sheet to acquire all of the issued capital of Aphrodite Gold Ltd., valuing the target at 4.49 Australian cents per share. Spitfire Materials currently holds a 10.38% stake in Aprhrodite Gold.

* Regis Resources Ltd. executive chairman Mark Clark, following his presentation at the Diggers & Dealers forum in Western Australia, said that the company is considering making offshore investments for new gold after saying that Australia was a mature jurisdiction and it was hard to find opportunities, Mining News reported.

* Novo Resources Corp. secured an option to acquire the Pipeline property in Western Australia's Karratha region for 500,000 shares. The property comprises seven prospecting licenses, five exploration licenses, six prospecting license applications, three exploration license applications and a miscellaneous license application.

* Sparton Resources Inc. signed an option agreement with two prospectors to acquire the 20-claim Bruell gold property in Quebec, in exchange for 1.5 million shares, C$300,000 in cash and incur a total of C$1.5 million in exploration expenditures on the claims over a five-year period.

* Kirkland Lake Gold Ltd. received approval to list its common shares on the New York Stock Exchange, effective Aug. 16, under the symbol KL.

BULK COMMODITIES

* Responding to a warning by Queensland over possible breaches of dust levels at the company's Moranbah North and Grosvenor mines during the second quarter, Anglo American said it will work with the government to urgently address the issue and to ensure full compliance. Anglo added that it undertook independent monitoring procedures in the said period to ensure that the health and safety of all employees and contractors was not compromised at all of its sites.

* Tata Steel Ltd. unit Tata Steel UK signed a deal with the trustee of the British Steel Pension Scheme that will allow the scheme to separate from the U.K. unit and certain affiliated companies. Under a Regulated Apportionment Arrangement, Tata will contribute £550 million and a 33% stake in Tata Steel UK to the pension scheme trustee in order to separate from the scheme.

* Steel Authority of India Ltd., or SAIL, posted a net loss of 8.01 billion Indian rupees in the first quarter of fiscal 2018, widening from a net loss of 5.35 billion rupees reported a year ago. Total sales volume stood at 3.0 million tonnes, which represents a 9% increase on a yearly basis, while salable steel output declined to 3.2 million tonnes from 3.4 million tonnes last year.

* Hindalco Industries Ltd. posted an after-tax net profit of 2.90 billion Indian rupees in the first quarter of its fiscal 2018, down from net profit of 2.94 billion rupees booked a year earlier despite higher revenue and production. Revenue in the period rose 28% year over year to 104.07 billion rupees, driven by higher volumes and realization.

* Thailand-based Banpu PCL posted net profit of US$65.9 million in the second quarter, significantly higher from net profit of about US$8.0 million reported a year earlier. Total run-of-mine coal production, however, slipped to about 8.0 million tonnes from 8.8 million tonnes in the prior-year period as heavy rainfall affected the company's Indonesian operations.

* Steelmaker CTL Australia Group Ltd. has withdrawn its application to list on the ASX because it is yet to prove that it is on a solid path to profitability.

* The La Escondida underground coal mine in Spain was closed due to a lack of clients, Mining.com reported. The closure of the last project of its type located in the Castilla and León region will leave over 70 workers jobless.

* The China Iron and Steel Association warned that steel futures prices were not driven by higher expected demand or supply disruptions but due to misinterpretation of Chinese capacity cuts and the government's crackdown on pollution, The Australian reported. The association also blamed some traders for driving up prices for their own benefit by making exaggerated claims that steel prices will increase in the final six months of 2017.

* Israel Chemicals Ltd. signed contracts to supply 750,000 tonnes of potash, including options, to its Indian customers between August 2017 and July 2018. The US$13-per-tonne sales price is above previous contracts.

* China's coal companies with annual revenue of above 20 million Chinese yuan posted a combined profit of 147.48 billion yuan in the first half of this year, reflecting an increase of 140.3 billion yuan over last year, Caixin reported, citing data from National Development and Reform Commission.

SPECIALTY

* Rio Tinto metallurgists and chemical engineers are quietly testing a closely guarded process in a bid to develop a unique Serbian mineral deposit and the miner's first new mining product in decades, The Australian reported. The company is targeting to develop a top-three global lithium mine at the Jadar lithium deposit to cater the growing demand for batteries as fossil fuel's role as an energy source declines.

* PJSC Alrosa denied accusations that the Mir underground mine, part of the Mirny Division, in the Siberian region of Yakutia was unsafe, following an Aug. 4 flood that left eight miners missing. Relations of the missing workers spoke to Russian news site Meduza, alleging that Mir was in a "lamentable state" and there had been floods at the mine in the past.

* Cornerstone Metals Inc. signed a nonbinding letter of intent with Americas Gold Exploration Inc. for an option to acquire the Carlin vanadium project in Nevada.

INDUSTRY NEWS

* A recently announced increase in mining royalties and the creation of a new mining agency in Brazil, combined with clearer and more consistent regulations, is expected to boost the long-term outlook of the country's resources industry, Mining Weekly reported, citing a recent report by BMI Research.

* Between the start of 2016 and the end of July 2017, mining companies reported potential capital spending of almost US$60 billion. However, only US$583 million has been spent so far, with the remainder targeted for future spending.

* The Democratic Republic of the Congo has reinstated a value-added tax on imports for mining companies, Reuters reported, citing the DRC's Chamber of Mines. In a draft letter to Finance Minister Henri Yav, the president of the DRC's Chamber of Commerce, Albert Yuma, said the resumption of the VAT will "make the functioning of mining companies more difficult".

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

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