Industry news
BHP closes deal to offload Queensland coal joint venture to Stanmore
4 may | Deals
BHP has concluded the divestiture of its 80% stake in BHP Mitsui Coal (BMC), an operated metallurgical coal joint venture in Queensland, to Stanmore SMC, a wholly owned entity of Stanmore Resources.
As part of the deal, first agreed to in November 2021, Stanmore has made a $1.1bn cash payment at the completion of the deal and a preliminary completion adjustment of around $200m for working capital.
Stanmore is also due to pay a further $100m in cash to BHP on 3 November 2022, as well as a potential additional $150m payable in 2024 in a potential price-linked earnout. This brings the total deal consideration to up to $1.35bn in addition to the final completion adjustment amount.
Operated by BHP Group as part of a joint venture with Japan’s Mitsui, BMC owns and operates two metallurgical coal mines, including South Walker Creek and Poitrel in the Bowen Basin. The two mines have a combined metallurgical coal production capacity of around 10 million tonnes per annum, and marketable reserves of more than 135 million tonnes.
Stanmore CEO Marcelo Matos said: “The completion of this transaction marks an important milestone in our history."
2 may | Safety
Landslide at artisanal Indonesian gold mine claims 12 lives
A landslide at an abandoned gold mine in the North Sumatra province of Indonesia has killed 12 women, reported Agence France-Presse (AFP).
The disaster, which was caused by the collapse of a cliff in North Sumatra’s Mandailing Natal district, occurred on 28 April.
Following hours of rescue operation, the rescue team evacuated the bodies of the victims located in a 2m deep hole that was filled with mud. Two other women at the mine managed to survive the landslide.
Earlier this year, Indonesia announced a ban on coal exports for one month to ensure adequate supply for domestic power plants and avert blackouts. Coal miners in the country are required to supply 25% annual production at a maximum price of $70 per tonne to state utility PT PLN.
Local police chief Marlon Rajagukguk told AFP: “The cliff around the mine collapsed and buried the 12 women, killing them all. Now all the bodies of the victims have been returned to their family.”
29 April | Projects
Nyrstar to invest $285m in new Australian zinc electrolysis plant
Metals group Nyrstar Australia has unveiled plans to invest $285m to build a new electrolysis plant at its Hobart Zinc Works operations in Tasmania.
The new facility will utilise the latest technology to support a “step change” in the performance of Zinc Works and increase the global competitiveness of Australian zinc.
The project will receive $36.2m in funding from the federal government, alongside $14.5m from the Tasmanian Government.
The project has already secured the approval of the Glenorchy City Council, as well as the Environment Protection Authority of Tasmania, and work on the plant is expected to be completed by 28 months.
Nyrstar vice-president Australian operations Dale Webb said: “Zinc is a critical mineral for the transition to a low-carbon world, prolonging the useful life of steel in buildings, improving the performance of solar cells and playing a vital role in a wide range of industrial and agricultural uses that are critical to livelihoods and the global economy."
28 April | Deals
Aeris Resources to buy Australia’s Round Oak Minerals for $167m
Aeris Resources has signed a deal to acquire Australia-based Round Oak Minerals from investment firm Washington H Soul Pattinson (WHSP) for $167m.
The acquisition of Round Oak, which owns copper and zinc assets in Australia, forms part of Aeris’ diversification strategy. Round Oak’s assets include the Jaguar zinc and copper underground mine in Western Australia and the Mt Colin copper underground mine in Queensland. It also owns exploration tenements in the Mt Isa region of Queensland.
As per the terms of the agreement, Aeris will pay $57.1m in cash to WHSP upon the closing of the transaction. Aeris will also issue more than 1.46 billion of its shares.
Aeris executive chairman Andre Labuschagne said: “This transaction transforms Aeris into a mid-tier copper, gold and base metals producer with multiple operations and exceptional growth potential."
28 April | Production
India urges states to boost coal imports for next three years
The Indian Government has directed its states to boost coal imports to meet national demand for the coming three years, reported Reuters, citing four sources.
The decision by the government comes amid a severe fuel crisis as the country’s coal inventories reached the lowest pre-summer levels in the past nine years.
Last month, a senior coal ministry official was reported by Reuters as saying that India is expected to produce 350-400 million tonnes of coal from private coal mines by the end of this decade.
A ministry official said: “Only last year, they told us to cut down imports. Now they want us to import as much as we can and are saying there are supply constraints."
27 April | Deals
Meryllion to buy stakes in Australian gold projects from Essex Minerals
Canada-based Meryllion Resources has signed an agreement with Essex Minerals to purchase stakes in the Mt Turner copper-molybdenum and Drummer Fault gold projects.
According to the deal, Essex has granted a 90-day option to Meryllion to finance at least $250,000 on exploration at the Mt Turner project.
Essex Minerals president and CEO Paul Loudon said: “Copper is expected to play a critical role in the electrification of the global economy and the transition to green energy.
“An independent report by Goldman Sachs last year indicated the worldwide demand for copper for transitioning to green energy alone will increase from under one million tonnes in 2020 to approximately 5.4 million tonnes by 2030."
Ukraine latest
Russia’s Polymetal postpones mining projects amid sanctions
Gold mining firm Polymetal has decided to defer several projects due to Western sanctions on Russia.
The decision has been announced by the firm in its first-quarter production results.
Polymetal reported Q1 revenues of $616m, a 4% year-on-year increase, as a result of surging gold prices.
Nornickel and Rosatom plan lithium deposit development in Russia
Russian nickel and palladium mining and smelting company Nornickel has signed a cooperation agreement with state-owned firm Rosatom to develop a lithium deposit in the north-western Murmansk region.
The deal comes amid surging global demand for lithium due to its use in batteries for electric vehicles.
However, Russia faces a potential lithium deficit due to the suspension of commodity exports from its main suppliers following its invasion of Ukraine.
UK minister supports coal mine to reduce reliance on Russian supply
UK Secretary of State for Levelling Up, Housing and Communities Michael Gove could approve the launch of the country’s first deep coal mine in three decades, according to the Telegraph, citing sources in the UK Conservative Party.
The approval for the deep coal mine, despite opposition from climate activists, would help the country reduce its dependence on Russian coal in the wake of Moscow’s invasion of Ukraine earlier this year.
27 April | Law
Chilean watchdog begins sanction processes against Glencore mine
The Superintendence of the Environment (SMA), Chile’s environmental regulator, has filed charges against Glencore’s Lomas Bayas copper mine due to non-compliance with water, flora and fauna monitoring.
The sanction process involves a “very serious” charge for failing to monitor aquifer levels and a minor charge of not having defined the hydrologic and biotic profile in the river, SMA said.
It follows the conclusion of an investigation by SMA based on a complaint filed by Antofagasta’s General Directorate of Waters, citing a reduced number of Loa water frogs, a critically endangered species.
The SMA said the records were missing on the mine’s observation well and that the company failed to properly graph measurements such as water depth, pH, temperature and water conductivity in the aquifer.
The mining firm is now required to present a compliance programme within 10 business days and formulate arguments in 15 business days.
Located in the Atacama Desert of northern Chile, the Lomas Bayas mine reported production of 64,300 tonnes of copper last year.
SMA head Emanuel Ibarra said: “After analysing the complaint, a strategy was developed to monitor nearby auditable units.
"In this way, we collected information on the ground and environmental monitoring data, in this case from Minera Lomas Bayas, whose underground water system is located three kilometres from the reported area.
“With this, and after reviewing the background in the framework of its environmental permits, the SMA has formulated two charges against the mining company, associated with water monitoring and monitoring of flora and fauna.”
Ukraine latest
Russia’s Polymetal postpones mining projects amid sanctions
Gold mining firm Polymetal has decided to defer several projects due to Western sanctions on Russia for its Ukraine offensive.
The decision has been announced by the firm in its first-quarter production results.
Polymetal reported Q1 revenues of $616m, a 4% year-on-year increase, as a result of surging gold prices.
Nornickel and Rosatom plan lithium deposit development in Russia
Russian nickel and palladium mining and smelting company Nornickel has signed a cooperation agreement with state-owned firm Rosatom to develop a lithium deposit in the north-western Murmansk region.
The deal comes amid surging global demand for lithium due to its use in batteries for electric vehicles.
Yet Russia faces a potential lithium deficit due to the suspension of commodity exports from its main suppliers following its invasion of Ukraine earlier this year.
UK minister supports coal mine to reduce reliance on Russian supply
UK secretary of state for levelling up, housing and communities Michael Gove could approve the launch of the country’s first deep coal mine in three decades, reported the Telegraph citing sources in the UK Conservative Party.
The approval for the deep coal mine, despite opposition from climate activists, would help the country in reducing its dependence on Russian coal in the wake of Moscow’s invasion of Ukraine.
ALROSA launches project to convert its vehicles to natural gas
Russian miner ALROSA has launched a project to convert its vehicles from gasoline and diesel to natural gas to cut greenhouse gas emissions and boost economic efficiency.