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Rio Tinto to exit Australian coal with US$2.25B Kestrel mine sale

TOP NEWS

Rio Tinto to exit Australian coal with US$2.25B Kestrel mine sale

Rio Tinto agreed to sell its 80% stake in the Kestrel thermal and metallurgical coal mine in Queensland, Australia, to EMR Capital and PT Adaro Energy Tbk. for US$2.25 billion. The latest deal brings Rio Tinto's proceeds from recent Queensland coal divestments to US$4.15 billion.

CSN targeting over US$900M asset sales in 2018

Cia. Siderúrgica Nacional is looking to conclude asset sales this year of 2 billion to 3 billion Brazilian reais, or between US$600 million and US$901 million, to slash its debt, Reuters reported, citing CEO Benjamin Steinbruch. The executive did not elaborate on potential assets that could be off-loaded, but sources said the company could sell its interest in rival steelmaker Usinas Siderúrgicas de Minas Gerais SA.

Citic ups 2017 dividend as net profit remains stable YOY

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 non-cash impairment charge of HK$7.2 billion on the Sino-Iron project in Western Australia.

DIVERSIFIED

* Vale SA may decide on its new dividend policy on March 29. Under the new policy, payouts may be tethered to EBITDA allowing the company to distribute 30% to 50% of the profits, Valor International reported, citing "people close to the talks."

BASE METALS

* Codelco's union leader Raimundo Espinoza was removed from his post as president of the Chilean Federation of Copper Workers, reportedly due to internal differences and labor conflicts. He will be replaced by Héctor Roco, president of Codelco's Chuquicamata No. 1 workers union. Roco will also replace Espinoza as the workers' representative on Codelco's board, daily Pulso reported.

* First Quantum Minerals Ltd.'s 90%-owned Cobre Panama copper project in Panama is expected to start trial production in the second half, with operations to start in the second half of 2019, Pulse reported. South Korea's state-owned Korea Resources Corp. owns a 10% stake in the project.

* Nexa Resources Perú SAA's BB+ corporate credit and issue-level ratings were affirmed by S&P Global Ratings, with a stable outlook, reflecting the expectation that the company's operations will remain resilient over the next 12 months. The ratings 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.

* Chemaf Sarl, a junior cobalt miner in the Democratic Republic of the Congo, is building a processing plant at its Mutoshi copper-cobalt mine, Bloomberg News reported, citing Chairperson Shiraz Virji. The proposed plant will open in September 2019 and will have the capacity to produce 20,000 tonnes of cobalt per annum six months after opening.

* OZ Minerals Ltd. CEO Andrew Cole said that no agreement has been reached with Glencore Plc for the sale of its 8.27% interest in Brazil-focused copper-gold miner Avanco Resources Ltd., The Australian Financial Review reported.

* Zinc producer PJSC Chelyabinsk Zinc Plant produced 183,002 tonnes of salable SHG zinc and zinc-based alloys in 2017, a 4.7% year over year increase.

PRECIOUS METALS

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

* 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.

* Metminco Ltd.'s share price in afternoon trading on the ASX surged 40% as 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, the retirement of the Redfield convertible note, payment of creditors and for general working capital.

* Pan African Resources Plc's Barberton project is on track to produce about 50,000 ounces of gold in the second half, an about 23% increase from the first half output. Meanwhile, the construction of the Elikhulu tailings retreatment plant is ahead of schedule, and first gold production expected in August.

* Canadian-listed Galway Gold Inc. filed an application for arbitration under the Canada-Colombia Free Trade Agreement as part of its efforts to recover losses from the Colombian government with respect to its Reina de Oro gold-copper project in the country.

* Harmony Gold Mining Co. Ltd. said two workers were fatally injured in a seismic-related fall-of-ground incident at the company's Joel gold mine in South Africa. An investigation is underway.

* Strategic Minerals Plc will undertake a maiden exploratory drilling program at its Mount Weld tenements, prospective for gold and rare earths, in Western Australia. The 2,600 meter aircore program is expected to start in April.

BULK COMMODITIES

* 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. escalated. 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.

* Separately, China's state-owned Global Times wrote that the East Asian country is ready to release its list of retaliatory tariffs on imports from the U.S. as a response to the list from U.S. 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.

* While Germany remains in favor of giving concessions to the U.S. to prevent tariffs on European steel and aluminum, France is looking to pressure China over state subsidies and overcapacity in the steel industry, Bloomberg News reported, citing unidentified government officials from both countries.

* Noble Group Ltd. said that its restructuring plan has been 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.

* 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 non-core assets, which will total 3.1 billion Brazilian reais and be used to pay down debts.

* 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.

* Anglo American Plc secured approval from the Brazilian environmental agency Ibama to restart operations at its Minas Rio iron ore mine in the country, Reuters reported March 28, citing the mining major.

* Metro Mining Ltd. delayed the start of mining at its Bauxite Hills bauxite project in Queensland, Australia, to the week of April 9 due to the tropical cyclone Nora. The company noted that the delay is not expected to have any impact on the full year production target for the project.

* Potash and magnesium-focused Karnalyte Resources Inc. plans to complete a comprehensive review of its business, operations and strategy concurrently with the release of its first quarter financial results.

* W Resources Plc unit Iberian Resources Spain SL was granted about €5.3 million for its La Parrilla tungsten-tin project in Spain by the Junta de Extremadura Government.

* Vedomosti reported that PJSC Acron and Dorogobuzh, controlled by the former company, filed a lawsuit against PJSC Uralkali on Feb. 1 in the arbitration court of the Perm territory. The companies asked the court to resolve disagreements that have arisen over a contract for the supply of chlorocallium. The Federal Antimonopoly Service of Russia is involved as a third party. The details of the disagreements were not disclosed.

* Glencore is mulling bidding for the Optimum coal operations in South Africa, which the commodities trader sold to a Gupta family-connected firm in 2015, Bloomberg News reported, citing sources.

* Norsk Hydro ASA is holding talks with Pará state's environmental authorities to resume normal operations at its Alunorte alumina refinery in Brazil.

* Meanwhile, Norsk Hydro will move to shut down half of its alumina capacity at the Alunorte refinery in the next two weeks to preserve equipment, Reuters reported, citing sources. The plant could completely shutter the lines within about two months, the report added.

* K+S AG plans to boost production by 25% at its Frisia Zout vacuum salt plant in the Netherlands to 1.2 million tonnes per year by the end of 2020. The company did not define the expansion cost in a March 27 press release, but a K+S spokesperson told S&P Global Market Intelligence that the investment required would be in the low tens of millions of euros.

* Gensource Potash Corp. entered into a second deal to sell 250,000 tonnes per year of potash production from its facilities to be built in Saskatchewan, where it is developing the Vanguard potash project, to a North American agriculture firm.

SPECIALTY

* Kommersant reported that Russia's Ministry of Finance plans to privatize the country's largest diamond cutter, Smolensk Kristall, until 2019. For Kristall itself, PJSC Alrosa was the only candidate. Alrosa told Kommersant that the company will analyze the possibility of participating in the privatization.

* Mineral sands could be about to "fall off" mining's environmentalist-driven "climbing frame" as rising pressures send investment offshore Australia, but others believe that the local future is bright due to macro factors and the country's low sovereign risk and still-rich prospectivity, S&P Global Market Intelligence reported.

* Tronox Ltd. announced an offering of US$615 million aggregate principal amount of 6.50% senior notes due 2026. The proceeds will redeem about US$584 million of 7.50% senior notes due 2022.

* An employee died after falling onto a conveyor belt at De Beers SA's Venetia diamond mine in South Africa, African News Agency reported, citing a police statement. The statement also said the incident was being treated as a "case of culpable homicide."

INDUSTRY NEWS

* The Philippines' Mining Industry Coordinating Council has delayed the review of 26 mines in the country ordered closed or suspended in 2017, with the Department of Finance saying the final outcome of the assessment is now scheduled to take six months instead of three, Bloomberg News reported.

* Cash balances at the end of the second half of 2017 were up 2.2% overall for 627 mining companies listed on the ASX and the London Stock Exchange. The companies saw cash balances grow from US$49.56 billion at the end of the first half of 2017 to US$50.68 billion at the end of the second half, according to a report by S&P Global Market Intelligence's Metals and Mining Research division.

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

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