Leading miners expect more consolidation, ESG focus in 2020
Executives from mining companies including Barrick Gold Corp., Freeport-McMoRan Inc. and Newmont Goldcorp Corp. are expecting a big focus on environmental, social and governance issues, as well as on more consolidation in 2020, according to interviews with Bloomberg News.
Norsk Hydro temporarily cuts Alunorte production up to 50%
Norsk Hydro ASA said that production at its Alunorte refinery will be temporarily reduced to between 50% and 70% of capacity to prolong the lifetime of the bauxite inventories. The reduction came after the ceasing of power supply to the producer's Paragominas bauxite mine in Brazil, which led to temporarily stopping production at the mine. Norsk Hydro said that regular power supply is expected to resume within 5 to 10 days, noting that financial impact is estimated to be limited.
US Steel cuts 2020 capex guidance
U.S. Steel Corp. plans to indefinitely idle a significant portion of its Great Lakes Works operations near Detroit beginning in April 2020. It issued Worker Adjustment and Retraining Notification Act notices to some 1,545 employees at the operation, but expects the final number of affected workers to be lower. The steelmaker also lowered its 2020 capital spending forecast to US$875 million from US$950 million, part of its thrust to meet its goal of as much as US$1 billion of capital and operational cash improvements by 2022.
* Copper looks set to shine through the first half of 2020 as global trade tensions ease on the back of a tentative phase-one deal between the U.S. and China and manufacturing demand shows modest signs of improvement, some analysts say.
* Polish copper miner KGHM Polska Miedź SA obtained a five-year, US$1.5 billion unsecured loan with an international consortium of banks, Puls Biznesu reported.
* South32 Ltd. exercised an option to acquire a 50% stake in Trilogy Metals Inc.'s Upper Kobuk Mineral Projects in northwest Alaska.
* Peruvian miner Cia. de Minas Buenaventura SAA will pay C$16 million to acquire a 19.3% stake in Canadian explorer Tinka Resources Ltd.
* Bass Metals Ltd. agreed to sell its Tasmania, Australia, assets, which include the Hellyer zinc project and the Mount Block permit, to NQ Minerals PLC.
* Alexander Mining PLC intends to complete its exit from the mining industry through a proposed £6.6 million all-share acquisition of eLight Group Holdings Ltd.
* Palladium revenue is expected to increase to 41% of total revenue from primary platinum group metals, according to S&P Global Market Intelligence's Metals and Mining Research team. The combination of higher coproduct revenues from palladium and rhodium price rises and currency depreciation in South Africa and Russia has reduced platinum all-in sustaining costs to US$678 per ounce in 2019. With PGM price rises expected to continue into 2020, we expect costs to fall further in 2020.
* The Australian Taxation Office had its A$250 million goods and services tax assessment against EBS Refining upheld in a landmark tax case, after the Administrative Appeals Tribunal struck down the gold refiner's arrangement to obtain refunds from an artificial gold bullion processing and trading scheme, The Australian wrote. The victory meant that the tax office operated within law, with states that have lost around A$1 billion in goods and services tax revenue will find it harder to retrieve monies from the Commonwealth, the report said.
* Shanta Gold Ltd. successfully connected its New Luika gold mine in Tanzania to the state power grid supplied by TANESCO. The cost of state grid power is approximately half that of self-generated power.
* AngloGold Ashanti Ltd. achieved its first gold pour at the Obuasi gold mine in Ghana on time and on budget after the operation was halted five years ago. Annual gold production is expected to be 350,000 to 400,000 ounces for the first 10 years and above 400,000 ounces over the mine life at all-in sustaining costs of about US$800 per ounce.
* Resolute Mining Ltd.'s sulfide roaster at the Syama gold mine in Mali has been successfully brought back online and is operating at nameplate capacity.
* New Pacific Metals Corp. expanded its Silver Sand land package in Bolivia by acquiring a 100% stake in a special temporary authorization located to the north of the project, by paying a one-time amount of US$200,000 to arm's length private owners. The newly acquired authorization currently consists of six hectares but will total approximately 0.50 square kilometers once consolidated to concessions called Cuadriculas and converted to mining administrative contract with the country's Autoridad Jurisdiccional Administrativa Minera.
* Mirasol Resources Ltd. opted to drop the Indra gold project in Chile after Hochschild Mining PLC terminated an option to acquire up to a 70% stake in the operation and the results of a recently completed drilling program.
* Azumah Resources Ltd. received all of the environmental permits from the Ghanaian environmental protection agency, allowing the firm to start construction and operation of its Wa-Lawra gold project.
* Ero Copper Corp. reported an updated resource estimate for the NX gold mine in Brazil, which posted a 416% increase in indicated resources to 442,600 tonnes grading 12.28 g/t gold, compared to the 2018 technical report. Contained gold grew 448% to 174,700 ounces.
* Mosaic Co. plans to reduce phosphate output at its Central Florida facilities by 150,000 tonnes per month, on top of 500,000 tonnes mainly reduced at its Louisiana operations in the second half of 2019, as well as lower rates at its Canadian business, until markets improve. The move will result in fourth-quarter potash and phosphate shipments falling "modestly below" its latest guidance ranges.
* Oceanic Iron Ore Corp.'s preliminary economic assessment for the Hopes Advance iron ore project in Quebec generated a posttax net present value, discounted at 8%, of US$1.4 billion, a 17% internal rate of return, and an initial cost estimate of US$1.19 billion.
* Aluminum Corp. of China Ltd. agreed to pay 1.29 billion Chinese yuan to acquire a 10% stake in Yunnan Aluminum Co. Ltd. through the subscription of 314,050,688 A shares of Yunnan Aluminum at 4.10 yuan apiece. The company said that the deal allowed it to resolve competition issues with Yunnan Aluminum.
* Thailand renewed an anti-dumping duty imposed on cold-reduced coiled and uncoiled carbon steel from China, Vietnam and Taiwan for an additional five years, beginning February 2020, to limit supply from the three countries, Bangkok Post reported. Commerce Minister Jurin Laksanawisit, who headed the meeting of the anti-dumping and countervailing committee, said in the news outlet's report that the decision was reached after a probe showed that dumping from the three Asian nations persisted. Since 2014, the Southeast Asian nation has imposed anti-dumping tariffs between 4.22% and 20.11% of cost, insurance and freight prices.
* China Minmetals Corp. established a new subsidiary to mark its entry into graphite, Reuters reported, citing the company's statement on its official Wechat account. China Minmetals Group (Heilongjiang) Graphite Industry Co. will advance the Yunshan graphite mine in Heilongjiang province, the report said.
* Lepidico Ltd.'s nonbinding letter of intent with BASF SE wherein the latter will purchase lithium hydroxide sourced from the Karibib lithium project in Namibia, has been novated and extended to Dec. 31, 2020.
* Metallica Minerals Ltd. agreed to sell a 50% stake in the heavy mineral sand plant and tenements at Urquhart Point in Queensland, Australia, to Victorian Ferries Pty. Ltd. for a total payment of some A$1.7 million in stages.
* Mayur Resources Ltd.'s plans to construct a pilot plant at the Orokolo Bay industrial sands project in Papua New Guinea are on track for 2020 after the purchase of key plant equipment and mobile machinery.
* New Hope Corp. Ltd. welcomed an appeals court decision that confirmed the Supreme Court of New South Wales' earlier ruling that the firm was not bound by a Deed of Cross Guarantee to guarantee the debts of Northern Energy Corp. Ltd. and Colton Coal Pty. Ltd., which own the Colton coal project in Queensland, Australia, with both companies in liquidation.
* Malawi's Minister for Natural Resources, Energy and Mining gave Paladin Energy Ltd. statutory consent to divest its 85% stake in the Kayelekera uranium project to Lotus Resources Ltd.
* An ore reserve update for Image Resources NL's Boonanarring mineral sands project in Western Australia outlined 10.7 million tonnes in the proven and probable categories grading 8.9% total heavy minerals, representing a 24% increase in total heavy minerals ore grade, compared to an earlier estimate.
* The U.S. Securities and Exchange Commission voted to propose rules requiring resource extraction issuers to disclose payments made to a foreign or the U.S. government pertaining to commercial oil, natural gas and mineral development. The proposed rules would require extraction issuers to file a form annually that includes details about payments made to the U.S. or a foreign government related to the commercial development of oil, gas or minerals. The issuer would also have to disclose payments made by its subsidiaries or other entities it controls.
* Tariffs and trade tensions remain significant concerns for large businesses across the U.S., with about 43% of Fortune 500 companies mentioning these issues during earnings calls in the last few months, a study by the U.S. Chamber of Commerce showed. Nearly half of earnings calls from the manufacturing and industrial sectors discussed both tariff and trade tension impacts. The study also noted that 40% of construction contractors said their businesses would be affected by steel and aluminum tariffs, while 32% were concerned about the effect of new material and equipment tariffs on their operations.
* China will ban tailings dams in downstream areas with a high population or with nearby production and living facilities as the country tightens its rules to avoid a disaster similar to a dam breach at Vale SA's Feijao iron ore mine in January, Reuters reported, citing China's Ministry of Emergency Management.
* A bill authorizing mining on protected indigenous reserves in Brazil has already been prepared and only needs to be sent to Congress for consideration, according to the country's President Jair Bolsonaro, Reuters reported.
* Nationwide strikes in France against pension reforms have postponed some minor metals deliveries until 2020, Fastmarkets MB reported. "It's very difficult to get material in and out of France and this is practically the last week of the year to ship goods to customers," a European minor metals trader told the news outlet.
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