Monthly Archives: April 2018
Freeport-McMoRan Inc reported a weaker-than-expected quarterly profit on Tuesday, sending its shares down more than four percent as it also lowered its copper sales forecast for the year and raised its outlook for costs.
The world’s biggest listed copper miner said it now expects to produce 3.8 billion pounds of copper this year, down from a previous forecast of 3.9 billion.
It raised its copper cash forecast for year to $1.01 a pound from a previous 97 cents.
Freeport-McMoRan now expects to produce 3.8 billion pounds of copper this year, down from a previous forecast of 3.9 billion.
Phoenix, Arizona-based Freeport, which is in negotiations with the Indonesian government to divest a majority stake in its massive Grasberg copper and gold mine, said it was in talks with the country’s environment ministry about new environmental standards that “conflict” with the company’s approved environmental management programs.
“Resolution of these matters is a requirement for concluding a comprehensive agreement for PT-FI’s (Freeport Indonesia’s) extended operations,” Freeport said.
Indonesia introduced new rules last year to gain greater control over mineral resources, requiring miners to divest a majority stake in their operations, relinquish arbitration rights and pay new taxes and royalties.
Freeport’s shares were last down 4.7 percent at $17.91.
Earlier Freeport said attributable profits rose to $692 million, or 47 cents per share, in the three months ended March 31, from $228 million, or 16 cents a share, a year earlier.
Excluding one-time charges, the profit was 46 cents per share, while analysts on average had expected 56 cents, according to Thomson Reuters I/B/E/S.
It sold 993 million pounds of copper and 610,000 ounces of gold in the first quarter, below the 1 billion pounds of copper and 675,000 ounces of gold it had forecast previously.
(Reporting by Karan Nagarkatti in Bengaluru and Nicole Mordant in Vancouver Editing by Amrutha Gayathri, Sriraj Kalluvila and Frances Kerry)
DAKAR, April 24 (Reuters) – Congo’s state miner Gecamines is starting legal proceedings to dissolve its Kamoto copper and cobalt joint venture with a subsidiary of Glencore, blaming the commodities giant for high debts that have weighed on the mine for more than 10 years.
Gecamines said on Tuesday that debts owed by Kamoto to Glencore and its subsidiaries at the end of 2017 topped $9 billion. It said the commodities group charged the venture interest rates on loans that were too high.
Kamoto, one of Democratic Republic of Congo’s (DRC) biggest copper and cobalt mines, is 75 percent controlled by Katanga Mining, in which Glencore has an 86 percent stake. Gecamines controls the remaining 25 percent.
Kinshasa is taking an increasingly confrontational stance toward foreign mining companies, including a new mining code passed last month that hikes royalties and taxes.
Gecamines said last year it planned to implement new controls to hold its joint venture partners accountable for poor financial performance at their mines.
“Through a series of intragroup financial and commercial agreements, the majority shareholders group implemented a policy that resulted in draining, to its own benefit, the treasury and the wealth of the joint company,” Gecamines said in a statement.
A Glencore spokesman declined to comment.
Katanga Mining had said on Sunday it opposed dissolving Kamoto and was assessing options to address the mine’s capital shortfall, including forgiving a portion of the debt.
Katanga said it had attempted to engage in talks with Gecamines about recapitalising the Kamoto mine but that the Congolese company unilaterally launched legal proceedings.
A court hearing on Gecamines’ petition to dissolve Kamoto is scheduled for May 8 in Congo.
Gecamines said in its statement that annual interest rates on Kamoto’s debts had reached 14 percent. It said Glencore and its subsidiaries were able to borrow funds far more cheaply than the level at which it lent on to the venture.
HSBC analysts were sanguine in a note on Monday about the impact of Gecamines’ move, saying Katanga had several options to recapitalise the mine that were unlikely to impact the company’s assets, liabilities and net assets.
However, Elisabeth Caesens, director of Resource Matters, a Brussels-based group that advocates better resource management, said Glencore and Katanga could have more serious concerns.
“Congolese authorities have cancelled fully operational projects in the past in less troubling circumstances. The scenario whereby the DRC court grants Gecamines relief should not be ruled out completely,” she told Reuters.
Congo is Africa’s top copper producer and the world’s leading miner of cobalt, a key ingredient in electric batteries, but Gecamines is heavily indebted.
Shares in Toronto-listed Katanga lost half their value on Monday in response to Sunday’s original announcement.
(By Aaron Ross; Editing by Edmund Blair and Mark Potter)
HAVANA, April 24 (Reuters) – Cuba forecasts nickel plus cobalt sulfide production will exceed 50,000 tonnes this year even as prices rise, the head of the country’s state monopoly Cubaniquel was quoted by local media as stating on Tuesday.
Nickel is one of the cash-strapped Communist-run country’s most important exports, but revenue from it has suffered in recent years due to a decline in production and prices.
The country was ranked 10th in world nickel production in 2016 and sixth in cobalt.
The government forecast last year’s output at 54,500 tonnes, but business sources with knowledge of the industry said final tonnage was under 50,000, the lowest in decades.
Cuba does not report up to date production figures.
“Cuba estimates it will achieve a production of more than 50,000 tonnes of nickel and cobalt in 2018,” the director of Cubaniquel, Eder Manuel Olivero Garcel, was quoted by the official Cubadebate website as stating.
Cubaniquel is the sole operator of the Che Guevara processing plant at Moa, eastern Holguin province, and also has a joint venture with Canadian miner Sherritt International at the Pedro Soto Alba plant in the same area.
Cubadebate said the Che Guevara plant planned to produce 19,000 tonnes this year, while according to Sherritt the Pedro Soto Alba will produce between 31,500 tonnes and 32,500 tonnes.
Cuba produced on average 74,000 tonnes of nickel plus cobalt during the first decade of this century, but the oldest of three plants was shuttered in 2012 and the Che Guevara has suffered from obsolescence and hurricane damage.
Nickel is essential in the production of stainless steel and other corrosion-resistant alloys.
Cobalt is critical in production of super alloys used for such products as aircraft engines. Prices have been rising in large part because cobalt is used in electric car batteries.
Cuban nickel is considered to be Class II with an average 90 percent nickel content.
Cuba’s National Minerals Resource Center reported that the country had around a third of the world’s known nickel reserves.
Cuba exports to China, Europe and Canada.
(Reporting by Marc Frank; Editing by Chizu Nomiyama)
Arctic Star Exploration (TSXV: ADD) announced today that it has received diamond results from caustic fusion analyses on the kimberlite discoveries within the Timantti Diamond Project in Finland.
According to Rockstone Research, such a finding is important because, different from other sites around the world, Arctic Star’s property is located in proximity to civilization and infrastructure. Timantti is a 243-hectare exploration permit and a 95,700-hectare exploration reservation near the township of Kuusamo, in the eastern part of the country.
In detail, the gems were recovered from discovery pits at the Grey Wolf kimberlite and the Vasa Dykes.
In an effort to explain the significance of its results, the Vancouver-based company said that, in general, diamondiferous kimberlites show an exponential relationship between the size and frequency of small diamonds and larger diamonds. “Microdiamond counts can thus be used as a semi-quantitative, predictive guide to diamond grade. The higher the diamond count and the more, larger diamonds present in a sample, the higher the expected grades for a particular kimberlite.”
Rockstone’s analysis states that the results are compelling due to the amount and size of the diamonds, and also because the rocks occur right at the surface and were recovered with a backhoe.
Arctic Star has said that its goal at this early stage of the evaluation of the Timantti kimberlites is to gather and process enough caustic fusion sample to give guidance on the grade of each discovery.
Researchers at the Sandia National Laboratories in Albuquerque are using ultrasonic waves to strip gold from SIM cards.
In a report by ABC, materials chemist Dale Huber said that even though many different research groups are trying to recover the yellow metal from electronic waste, in most cases they are using environmentally unfriendly techniques like separating gold from other components by boiling off mercury and letting the fumes go into the air.
To avoid such practice, Huber’s team is submerging SIM cards in water and blasting it with ultrasonic waves. The process creates bubbles that collapse and when they do so, they can “shoot out a jet that hits the surface and actually physically breaks off pieces of metals,” Huber told the Australian broadcaster.
The researchers are still in the process of refining the new method, however, the idea is to develop the technology into a larger scale operation.
Cobalt has been drifting lower after hitting near 10-year peaks last month to exchange hands for $91,500 a tonne on the LME on Friday. Cobalt remains up more than 300% since hitting multi-year lows at the beginning of 2016 as demand for the metal, a crucial element in batteries used in cellphones and electric vehicles, spikes.
While some of the froth has gone out of the spot market, the jostling among to secure long-term supply continues unabated.
According to a Bloomberg report on Monday, Cobalt 27 Capital, owner of the world’s largest private stockpile of cobalt, said it is in talks for potential tie-ups with major Chinese companies seeking to secure supplies of the key metal in batteries powering electric vehicles.
Car and battery makers from China have approached Cobalt 27 to discuss long-term partnerships and supply contracts, Anthony Milewski, chief executive officer of the Canadian firm, said in an interview in Beijing on Monday. Milewski said he has at least 17 such meetings lined up in major Chinese cities over the next three days:
“There’s a lot of interest and it is natural because it is where all this will happen,” Milewski said, declining to identify the companies. “China is going to be the world leader of electric vehicles.”
Cobalt 27 stockpiles the metal (around 3,000 tonnes), holds options on cobalt juniors and enters into streaming and royalty deals in an effort to be a pure play on the cobalt price.
While the stock is well down from its March peak, investors who bought into the battery metals story when Cobalt 27 listed in June last year are now enjoying a 33% jump in the value of the stock.
Cobalt 27 is weighing a dual stock listing in Shanghai or Hong Kong to expand its investor base, Milewski told Bloomberg, without giving a timing.
“EVs are happening in the region and so access to the investor community is important. Investors understand the EV story and valuations reflect that.”
Beijing has made electric vehicles a centerpiece of its war on pollution. It also wants the sector to spearhead the country’s Made in China 2025 innovation drive.
The Asian nation is rapidly accelerating the development of low- or zero-emission vehicles, targeting 7 million sales on new-energy vehicles by 2025.
Sales of battery-powered, plug-in hybrid and fuel-cell vehicles in China represent the largest global market, and could rise more than a fifth to surpass 1 million this year, according the estimates by the China Association of Automobile Manufacturers.
The auto industry is “waking up too late” to the fact that China will hold most of the world’s supply of battery raw material cobalt, Ivan Glasenberg, CEO of top producer of the metal Glencore, said in March.
The 3Cs: Cobalt-Congo-China
Annual production of the raw material is only around 100,000 tonnes primarily as a byproduct of nickel and copper mining. The Democratic Republic of the Congo today has six of the top 10 cobalt mines globally. Due primarily to Chinese investment, by 2022, the central African nation will host the nine largest cobalt producers.
With ERG’s $1 billion RTR operation comes on stream later this year and Glencore restarting its Katanga operations in the country will see the DRC’s share of global production increase from around 60% to nearly three-quarters. Congo also holds half the world’s reserves.
Not only is primary production highly concentrated, but the downstream industry is beginning to resemble a monopsony. China, despite having no cobalt resources of its own, is responsible for some 80% of the world’s cobalt chemical production, which overtook metal production around four years ago.
Zhejiang Huayou Cobalt, the world’s top cobalt refiner, increased output 35% last year and on its own was responsible for 20% of global output. The company sources nearly half its requirements from mines it owns in the DRC.
The China-Congo-Cobalt-nexus poses particular problems for automakers in the US and Europe. Not only in terms of securing supply but also the growing consumer awareness of ethical sourcing of materials. This could lead to premium pricing for cobalt produced outside Congo.
Canada’s Torex Gold Resources (TSX: TXG) announced that, following last week’s negotiations that put an end to a five-month blockade at its El Limón-Guajes mine, today it received a notification stating that the union in conflict had withdrawn its case before Mexico’s Federal Labour Board.
Los Mineros Union, led by expat in Vancouver Napoleón Gómez Urrutia, had been fighting since November 3, 2017, to be the legally constituted union for the union-eligible ELG Mine Complex employees. According to its representatives, Torex had unilaterally decided which union would advocate for workers, as opposed to letting them choose for themselves, accusations that the company denies.
Following months of protests, blockades, and contract suspensions, both parties tried negotiating before the Labour Board with the idea of setting the foundations for a consultation in which workers would have to decide which union would end up managing their contracts. However, since Los Mineros dropped its case, the company says there is no longer a choice to be made and, thus, the government-sanctioned union selection process is off the table.
“Enough has already been said about the disruption caused by this union representation challenge and associated illegal blockade,” the firm’s President and CEO, Fred Stanford, said in a media statement. “Torex has always supported the legally sanctioned, democratic union selection process. We see this Los Mineros Union withdrawal from the union selection process as a tacit acknowledgment that the incumbent CTM Union has the support of the majority of union eligible employees,” he added.
The CTM union, which stands for Confederation of Mexican Workers in Spanish, joined forces back in January with the community of Nuevo Balsas and Torex management to re-establish plant access through a road used during construction and gradually restart operations at the mine, located in the state of Guerrero and considered one of the richest open-pit gold deposits in Mexico.
Since then, processing operations have continued uninterrupted, while mining at the El Limón Pit resumed last week. Despite the slowdown, the Toronto-based company said that during the first quarter, its team was able to produce 67,000 ounces of gold in Dore and ship 8000 gold ounces in carbon fines.
For 2018, Torex expects to complete the ramp-up of operations at the site, a process that last year allowed it to pour 241,000 ounces and sell 244,800 ounces of the yellow metal.
A group of Spanish archaeologists ran a chemical and isotopic analysis to examine gold fragments that had broken off from one of the artifacts that make up the Carambolo Treasure, a 2,700-year-old cache whose origin has been a source of debate.
According to National Geographic, some experts say the pieces were created by Tartessos, a wealthy civilization that thrived in southern Spain between the ninth and sixth centuries B.C. Others, the magazine adds, are convinced the jewels belonged to the Phoenicians, who arrived in the western Mediterranean in the eighth century B.C.
To get a clearer answer, a team led by Francisco Nocete, professor of prehistory at the University of Huelva, decided to run the lab test. They didn’t get a straightforward result but a pretty good lead.
In their findings, which were just published in the Journal of Archaeological Science, the scientists explain that the gold used to carve the 21 pieces was not imported by anyone but extracted from same mines associated with the ancient tombs located at Valencina de la Concepcion, near Seville.
However, taking into account the fact that the bracelets, necklaces and chest decorations were carved using Phoenician techniques and that a Phoenician temple was likely located near the place where the treasure was found in 1958, the researchers arrived at a Solomonic conclusion: that the artifacts must be the product of a mixed culture of Near-Eastern Phoenicians and local Tartessians.
A second, perhaps more unexpected conclusion was drawn from the study. “All in all, as regards the Carambolo Treasure, we would find ourselves not at the beginning, but rather at the end of a gold processing tradition that began in the Lower Guadalquivir Basin during the 3rd Millennium BC and to which ornamental techniques such as filigree or soldering were added at the turn of the 1st Millennium BC,” the paper reads.
Shares in Pretium Resources Inc (NYSE:PVG) surged on Wednesday after the company announced blockbuster production numbers from its Brucejack gold-silver mine in British Columbia.
During early afternoon trade the Vancouver-based producer was exchanging hands for $8.27 a share, up 19.4% on the New York Stock Exchange, in massive volumes of more than 8m shares traded. Pretium is now worth $1.5 billion.
In a statement Pretium said production at the Brucejack mine in the northwest of the Canadian province hit a new high of 32,910 ounces in March. Brucejack produced 75,689 ounces in the first quarter for a total of more than 228,000 ounces of gold after nine months of ramp-up.
Gold recoveries improved to 96.8% in the quarter compared to the previous three months and the mill feed grade for March was 10.9 grams per tonne gold and averaged 9.1 grams per tonne for the quarter.
Pretium said it expects steady state gold production at Bruecjack, its only operating mine, to be achieved in mid-to-late 2018. Gold production at Brucejack for the first half of 2018 is expected in the range of 150,000 – 200,000 ounces, for total first year ramp-up gold production of 302,000 – 352,000 ounces.
The all-in sustaining costs for H1 2018 are expected to range from $700 -$900 per ounce according to the company.
With 14.1 g/t of gold in reserves, the Brucejack mine, is one of the highest grade gold projects to enter production in recent years. Final construction costs are expected to be in the region of $1 billion with a life of mine of 18 years.