August Newsletter – 09.08.2021
- Glencore to return $2.8 bln to shareholders in 2021
- Resolute to sell Bibiani gold mine in Ghana to Asante for $90m
- China Moly commits $2.5 billion to double Tenke Fungurume copper, cobalt output
- S. Korea to stock more critical metals for EV batteries, renewable energy projects
- Australia’s iron ore price slumps after China move
- Pressure grows between African mineworkers and their Chinese bosses
- Western Australia takes step-up in battery chemicals production
- China engages Mongolia in flurry of talks in wake of US envoy Wendy Sherman
Glencore to return $2.8 bln to shareholders in 2021
LONDON, Aug 5 (Reuters) – Glencore (GLEN.L) will return $2.8 billion to shareholders in 2021 after soaring commodity prices helped the mining and trading company to a record performance for the first six months of the year, it said on Thursday.
The London-listed company joins rivals Rio Tinto (RIO.L) and Anglo American (AAL.L) in declaring bonanza payouts after record half-year profits buoyed by a rebound in demand for commodities.
“Following COVID-19’s severe global impacts in early 2020, the subsequent economic recovery has seen prices of most of our commodities surging to multi-year highs,” said Glencore CEO Gary Nagle, who took the helm of the company in July.
Provided commodity prices hold up and net debt stays in check, Glencore could increase payouts further, chief financial officer Steven Kalmin said.
“We wouldn’t leverage the business further to pay distributions but we are happy to move towards 100% payout ratio given where the balance sheet is,” Kalmin told reporters on a call.
Glencore cut debt to $10.6 billion from $15.8 billion at the end of 2020.
Resolute to sell Bibiani gold mine in Ghana to Asante for $90m
Australia-based Resolute Mining has agreed to sell its Bibiani gold mine located in Ghana to Canada’s Asante Gold for a total of $90m in cash.
Under the terms of the agreement, Asante will make an initial payment of $30m, additional $30m on or before 6 months, and final $30m within12 months from completion.
Resolute intends to use the initial cash receipt of $30m for voluntary repayment of debt.
The agreement and transaction have been approved by the Ghana’s Minister of Lands and Natural Resources, and is expected to complete within 10 days.
Resolute said that the transaction is in line with its strategic focus on core operating assets, and would not involve any immediate changes to employment or contract relationships.
China Moly commits $2.5 billion to double Tenke Fungurume copper, cobalt output
China Molybdenum will invest $2.51 billion to double copper and cobalt production at its giant Tenke Fungurume mine (TFM) in the Democratic Republic of Congo.
The project, expected to be completed and online in 2023, includes building three ore production lines. They are forecast to rise average annual copper output at the mine by 200,000 tonnes and increase cobalt output by 17,000 tonnes, the company said in a filing to the Shanghai Stock Exchange.
S. Korea to stock more critical metals for EV batteries, renewable energy projects
South Korea will stockpile more rare metals, such as nickel and cobalt, from a 57-day supply to cover 100 days for key industries such as electric vehicle batteries and renewable energy.
Deputy Prime Minister and Finance Minister Hong Nam-ki expressed concern over the fast-growing global demand for rare metals such as nickel.
Included in the country’s plans is the selection of 100 local companies in the metals industry who will be provided with various benefits, support the private exploration of mineral deposits overseas, and obtain mining stakes.
Facilities will be built and expanded with state-run Korea Resources Corp. overseeing the overall management.
The Trade Ministry expects the global demand of the 35 metals to quadruple by 2040.
At an intergovernmental emergency economic meeting, Deputy Prime Minister and Finance Minister Hong Nam-ki expressed concern over the fast-growing global demand for rare metals due to the advancement of new industries and a carbon neutrality drive, with supply dependent on a few countries.
Australia’s iron ore price slumps after China move
Iron ore prices have dropped under $US200 a tonne for the first time since May as Australia’s biggest buyer China threatens to reduce its orders while diplomatic relations between the two countries remain frosty.
The price of Australia’s most valuable export commodity slumped by 3 per cent to $US195 ($A264) a tonne, with concerns China is accelerating measures to reduce its dependence on Aussie iron ore.
Chinese policymakers have flagged a move to cut its steel outputs in the second half of this year, partly to reduce carbon emissions.
But in the near future, it would be very challenging for China to move away from its more than 50 per cent dependence on Australian iron ore, noted Commonwealth Bank’s mining and energy economist Vivek Dhar.
“Over the medium term, China could reduce its dependence on Australian iron ore by increasing iron ore imports from other countries, boosting domestic iron ore supply, increasing scrap steel usage and reducing steel production altogether,” he said.
“The last two measures are likely to happen regardless of Australia China tensions.”
Iron ore is critical to Australia’s economy. Treasury predicts the value of the market will jump from $103 billion last year to $136 billion this financial year.
Pressure grows between African mineworkers and their Chinese bosses
Videos purporting to show violent confrontations circulate on social media, highlighting human side of China-Africa relations
Observers say a combination of cultural differences, management style and poor working conditions are to blame
A global rush for cobalt – an essential component in the lithium-ion batteries which power smartphones, laptops and electric cars – has seen a growing number of Chinese companies enter the southeastern Democratic Republic of Congo (DRC), holder of the world’s largest reserves of the metal.
The Central African nation has an estimated 3.4 million tonnes of cobalt, almost half the world’s known supply. But in a country where the World Bank estimates three-quarters of the population live on less than two dollars a day, the mineral rush has also come with challenges.
Thousands of “artisanal miners” have moved into the area, extracting cobalt by hand or rudimentary tools. Sometimes illegal miners intrude into mines legally assigned to local or foreign entities, leading to confrontation.
Western Australia takes step-up in battery chemicals production
MELBOURNE, Aug 3 (Reuters) – Western Australia is preparing to take a bigger slice of the booming global battery market, forecast to grow to $150 billion by 2030, as it moves beyond mining lithium and nickel into chemical processing.
Three big battery chemicals plants are set to come on line in coming months, while Germany’s BASF (BASFn.DE) is part of a pilot project with a state government research body to build a precursor chemical plant to blend the feeds used by battery makers.
As investors and electric vehicle makers look for supply chains away from dominant producer China, Australia believes it can compete on price and is banking on what it says are its solid credentials in responsible production.
“It’s the chemical steps that are attractive here in Australia,” state mining minister Bill Johnston told Reuters, adding end users could be confident that processing was done to high environmental, social and governance (ESG) standards.
China engages Mongolia in flurry of talks in wake of US envoy Wendy Sherman
- Defence and foreign ministers of both countries meet and pledge further engagement
- Ulaanbaatar will remain cautious not to choose sides between Beijing and Washington, analyst says
China has been trying to forge closer ties with Mongolia, holding a series of high-level exchanges between Beijing and Ulaanbaatar in recent weeks as US engagement in the region grows.
The latest effort was a foreign ministerial level meeting in Tianjin last Tuesday held at China’s invitation. The meeting came the day after Chinese Foreign Minister Wang Yi met US deputy secretary of state Wendy Sherman, who stopped in Mongolia before meeting Wang.
Mongolia’s foreign ministry said China promised to invest in major mining, energy, agriculture, infrastructure and environment protection projects, with the aim of increasing bilateral trade to US$10 billion.
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