Articles in Category: Company News

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This morning in metals news, Chilean miner Antofagasta expects a copper deficit this year, Polish lawmakers have proposed slashing the country’s mining tax and hackers have targeted Norwegian aluminum maker Norsk Hydro.

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Copper Deficit

Chilean miner Antofagasta forecasts a 2019 copper deficit ranging between 100,000 and 300,000 tons, Reuters reported.

“When we talk about the deficit, I don’t think it’s going to be a big one… it’s probably in a range between 100,000 and 300,000 tonnes,” CEO Iván Arriagada was quoted as saying.

Poland Mulls Cutting Mining Tax

According to another Reuters report, Polish lawmakers are considering cutting the country’s mining tax.

The tax — introduced in 2012 — primarily affects copper and silver producer KGHM, which is a major employer in the country, according to the report.

Norsk Hydro Hacked

The news turned from the announcement of a new Norsk Hydro CEO Monday to hacking on Tuesday.

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According to Reuters, the Norwegian aluminum maker suffered an attack by hackers that forced several plants to go offline.

Norwegian aluminum maker Norsk Hydro ASA has a new CEO for the first time in a decade.

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The firm announced Monday that CEO Svein Richard Brandtzæg will be stepping down after 10 years. Hilde Merete Aasheim, executive vice president and head of Norsk Hydro’s primary metal business area, was appointed Brandtzæg’s successor.

“I am honored, and I very much look forward to leading Hydro into the next chapter, together with 35,000 competent and engaged colleagues around the world,” Aasheim said in a company release. “I am confident that we have what it takes to turn a current challenging situation, for Hydro and for the global aluminium industry, into opportunities that will build the company for the future.”

According to the release, Brandtzæg will remain with the company through the end of the year in an advisory capacity to Aasheim and the company’s technology board.

Reuters reported Brandtzæg had asked for an early retirement.

“It’s been a very hard year for (him), no doubt. It’s been a very demanding situation in Brazil,” Norsk Hydro Chairman Dag Mejdell told Reuters.

The Norwegian firm has struggled with embargoes on production at its Alunorte alumina refinery in Brazil following a heavy rainfall and flooding in February 2018 at the refinery.

Last year, Brazilian authorities ordered the firm to cut production at the refinery by 50% amid questions about a new bauxite residue disposal area; the Alunorte refinery resumed production at 50% capacity in October after briefly having shut down operations completely.

“The impact of the rainfall event in Barcarena, Brazil, in February 2018, has been thoroughly investigated through public agencies, professional reports from internal and independent third-party as well as public hearings,” the company said in its annual report for 2018. “Environmental authorities have confirmed that there were no leaks or overflow from Alunorte’s bauxite residue deposits.

“However, we did recognize a need to strengthen the robustness of the plant, and we have increased water treatment capacity to prepare the plant for future climate and weather changes. Our clear ambition is to make Alunorte the benchmark in our industry, ensuring sustainable operations and social development in the communities around us.”

Norsk Hydro last week announced its financial results for 2018, reporting net income of 4,232 NOK ($505 million), down from 9,184 NOK ($1.07 billion) in 2017. The firm’s share price also took a hit in 2018, closing at 39.21 NOK ($4.58) from a 2017 closing price of 62.35 NOK ($7.29).

“The curtailment at Alunorte has weakened our financial results and progress of our improvement program,” the annual report stated. “In addition, different tariffs and sanctions have influenced global markets and trade flows over the past year, also affecting our industry.”

Norsk Hydro added that the production embargoes on the Alunorte alumina refinery remain in effect.

“Hydro is in dialogue with all the relevant authorities, at the local, regional and national level in Brazil,” the company stated in its annual report. “We continue to seek a common agreed solution, so we can resume normal operations, using the new and modern deposit area and the state-of-the-art press filters. At the time of authorizing this report, the production embargoes on Alunorte remains in force. The timing with regards to when the embargoes may be lifted remains uncertain.”

The firm expects ramping back up to 75-85% capacity will take about two months (once the embargoes are lifted), adding that the “timing of a return to full production capacity at Alunorte depends on the commissioning process of DRS2 and the press filters.”

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Revenue from the company’s bauxite and alumina operations last year fell to 2,282 million NOK ($266.6 million) from 3,704 million NOK ($359.2 million) in 2017.

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This morning in metals news, copper prices were up slightly Monday, Tokyo Steel held prices steady for the fourth straight month and Rio Tinto responds to criticism about carbon emissions stemming from its customers’ operations.

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Copper Prices

LME copper traded up 0.4% on Monday, Reuters reported, reaching $6,458 per ton.

Citing Society Generale analyst Robin Bhar, the report notes the second quarter of the year typically features conditions conducive to price support for copper.

Holding Steady

Japan’s Tokyo Steel has announced it is holding prices steady for its steel products for the fourth straight month, according to another Reuters report.

Kiyoshi Imamura, managing director of Tokyo Steel, was quoted as saying that domestic construction demand was “sluggish due to higher inventories and delays in some projects because of shortage of labour and some materials.”

Rio Answers Emissions Criticism

Rio Tinto has faced some criticism from environmental activists, who have called for the iron ore miner to bear more responsibility for the emissions caused by the miner’s customers.

Rio, however, says it can’t be held responsible for what customers do with their iron ore, the Australian Financial Review reported.

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Rio Tinto Chairman Simon Thompson wrote a letter to shareholders in which he explained that responsibility lies “within the control of our customers, not Rio Tinto,” he was quoted as writing.

Source: Toyota

Automaker Toyota last week announced a push to increase its previous investment pledge in the U.S.

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Last week the automaker announced it would up a 2017 pledge to invest $10 billion in the U.S. over five years, increasing the investment up to $13 billion.

“These latest investments represent even more examples of our long-term commitment to build where we sell,” said Jim Lentz, chief executive officer for Toyota Motor North America, in a company release. “By boosting our U.S. manufacturing footprint, we can better serve our customers and dealers and position our manufacturing plants for future success with more domestic capacity.”

In addition to the wider pledge, Toyota announced investments totaling $750 million in five states: Alabama, Kentucky, Missouri, Tennessee and West Virginia. The investments include “production capacity increases and building expansions at Toyota’s unit plants in Huntsville, Alabama, Buffalo, West Virginia, Troy, Missouri and Jackson, Tennessee.”

An investment of $288 million aims to increase annual engine capacity from 670,000 to 900,000 by the end of 2021 at its Huntsville, Alabama plant, and will include the addition of 450 new jobs.

A $238 million investment at its Georgetown, Kentucky plant will see to the commencement of production of the Lexus ES 300h hybrid in May, with production of the RAV4 hybrid beginning in 2020.

Toyota is also investing in its Bodine Aluminum plant in Missouri toward the goal of producing an additional “864,000 cylinder heads for Toyota’s New Global Architecture (TNGA),” up from the current level of more than 3 million cylinder heads per year. The automaker is also investing in its Tennessee aluminum plant, namely for equipment and a building expansion to double its annual capacity of hybrid transaxle cases and housings to 240,000.

Toyota also plans to double its capacity of hybrid transaxles to 240,000 by 2021 at its West Virginia plant.

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Earlier this month the automaker reported its February U.S. sales were down 5.2% year over year. For the first two months of the year, Toyota’s U.S. sales are down 5.9% compared with the same time period in 2018.

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Before we head into the weekend, let’s take a look at the week that was and some of the metals storylines here on MetalMiner:

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  • The palladium price continues to soar, MetalMiner’s Taras Berezowsky explained in this month’s Global Precious MMI.
  • Rare earths miner Lynas Corp. is appealing a condition put forth by the Malaysian government related to the miner’s license renewal.
  • Stainless steel surcharges and LME nickel prices made gains this past month.
  • The copper price also trended upward last month, but it could be entering a sideways trend.
  • MetalMiner’s Stuart Burns writes about recession concerns in the U.S. and elsewhere, and signs pointing in that direction.
  • Several billionaires are backing a new startup that aims to find new sources of cobalt, using “statistical modeling, big data aggregation, and basic science” to improve methods of exploration.
  • ArcelorMittal’s resolution plan for the bankrupt Essar Steel Ltd. received approval from an Indian tribunal — but an additional challenge awaits, MetalMiner’s Sohrab Darabshaw explained.

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Steel tycoon Lakshmi Mittal’s dream of re-entering the Indian steel market is about to come true.

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After almost a year of legal tussles, the National Company Law Tribunal (NCLT), Ahmedabad bench, gave the green light to ArcelorMittal’s resolution plan for the debt-laden Essar Steel Ltd. The latter was put on the block after lenders asked the court to recover about U.S. $7 billion in dues.

The approximately U.S. $5.9 billion acquisition of the distressed plant, though, has run into one more road block.

Essar Steel Ltd’s ex-promoter Prashant Ruia and two other directors of the erstwhile board of the steelmaker have approached the National Company Law Appellate Tribunal (NCLAT) to thwart the move.

Standard Chartered Bank, a dissenting bank among the Committee of Creditors (CoC) of Essar Steel, has challenged the NCLT’s order.

The bank’s contention was the resolution plan approved by the CoC of Essar Steel favored the secured creditors.

In late January, the same Tribunal had rejected a full debt settlement proposal by shareholders of Essar Steel, ruling that the offer violated Section 12A of the Insolvency and Bankruptcy Code (IBC), which says the promoters can reclaim a company from bankruptcy by paying full settlement, but not after others have submitted their expressions of interest.

This is one more hurdle that Mittal will now have to overcome to take over the mill, which boasts an annual capacity of 10 million metric tons.

A joint venture between Japan’s Nippon Steel & Sumitomo Metal Corp. with ArcelorMittal has offered an upfront cash settlement of about U.S. $ 1 billion and a multimillion-dollar capital infusion as part of the acquisition process.

ArcelorMittal SA is the world’s largest steel company by volume but doesn’t have a steel plant yet in India. Once the formal acquisition is done, Essar Steel’s capacity will immediately make ArcelorMittal the fourth-biggest player in India. The Essar plant is operating at much lower capacity; experts say will need a large influx of funds to run at capacity.

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ArcelorMittal has a presence in 60 countries and an industrial footprint in 18 countries. Mittal has made several attempts in the past to get into the Indian market, but none bore fruit.

In 2010, the company signed an agreement with the Karnataka provincial government to set up a 6 million ton per annum capacity plant, but the land acquisition process itself has taken about eight years.

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This morning in metals news, U.S. Trade Representative Robert Lighthizer on Tuesday said the U.S. is working on a “practical solution” to lift the steel and aluminum tariffs on Canada and Mexico, China is expected to have a 2.65-million-ton copper deficit this year, and a preliminary report on iron ore miner BHP’s train derailment in November said operators mistakenly applied brakes on the wrong train.

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USTR: U.S. Aims to Remove Steel, Aluminum Tariffs on Canada, Mexico While Preserving Gains for U.S. Industry

The United States-Mexico-Canada Agreement (USMCA), the successor to NAFTA, still must be ratified by the legislatures of the three countries.

A hangup toward that end is the fact that the U.S.’s Section 232 tariffs on steel and aluminum remain in effect for Canada and Mexico. The two countries have indicated they would not approve the deal without removal of the tariffs. Likewise, some U.S. politicians have argued for the removal of the tariffs for the U.S.’s northern and southern neighbors.

On Tuesday before the Senate Finance Committee, U.S. Trade Representative Robert Lighthizer said the U.S. is working on a “practical solution” to remove the tariffs while preserving gains the U.S. steel and aluminum industries have made in the last year.

“What I’m trying to do is a have a practical solution to a real problem … get rid of tariffs on these two, let them maintain their historic access to the U.S. market which I think will allow us to still maintain the benefit of the steel and aluminum program,” he was quoted by Reuters as saying.

China’s Copper Deficit

China is expected to post a copper deficit of 2.65 million metric tons this year, S&P Global Platts reported.

The report, citing data from a Beijing Antaike Information forecast, said copper demand is expected to rise 3% to 11.5 million metric tons, with production at 8.85 million metric tons.

Preliminary Report: Brakes Applied on Wrong Train in BHP Train Derailment

According to a preliminary report investigating the derailment of a BHP iron ore train in November, operators applied the brakes to the wrong train, Reuters reported.

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Per the report, the Australian Transport Safety Bureau will release a final report on the incident later this year.

The Renewables Monthly Metals Index (MMI) fell one point this month for an MMI reading of 103.

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The Hunt for Cobalt

As noted routinely in this installment of the MMI series, cobalt is a coveted material for its use in a wide variety of high-tech applications, from cellphones to laptops and much more.

A majority of the world’s cobalt is mined in the Democratic Republic of the Congo, where political instability and the government’s revision of its mining code (increasing royalty rates for cobalt and other materials) have posed business challenges to miners.

As such, it’s not surprising that some are looking for new sources of cobalt.

According to a Bloomberg report, a new startup powered by a coalition of billionaires, including Bill Gates, is seeking to do just that.

The startup, KoBold Metals, aims to create a “Google Maps for the Earth’s crust,” according to the report, in an effort to locate new sources of cobalt.

“KoBold Metals applies statistical modeling, big data aggregation, and basic science to materially improve the pace and efficacy of natural resources exploration,” KoBold’s website states. “We are applying our proprietary platform, Machine Prospector, to explore for new sources of ethical cobalt from reliable jurisdictions.”

The approach would also offer more specific focus to cobalt, as opposed to mining of the material as a byproduct of copper or nickel, as is typically the case.

“People just haven’t looked for the stuff,” KoBold CEO Kurt House told Bloomberg. “There’s very limited history of exploration at all outside of piggybacking on nickel and copper deposits.”

Cobalt Price Slides

Sticking with the cobalt theme, the price of the coveted material plunged throughout the second half of 2018 — and a recovery is not expected in the near term.

According to Reuters, the cobalt price fell to a two-year low of $32,000 per ton, down from $100,000 per ton in the first half of 2018.

What contributed to the plunge? According to the report, high prices led to an uptick in supply. However, cobalt demand is expected to exceed supply in the long term, according to the report.

GOES Prices Fall

The price of grain-oriented electrical steel (GOES) fell 4.1% month over month to $2,360/mt as of March 1.

The GOES MMI fell 8.2% for a March value of 168.

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Actual Metal Prices and Trends

Japanese steel plate fell 2.3% month over month to $772.30/mt as of March 1. Korean steel plate rose 1.9% to $586.67/mt. Chinese steel plate increased 3.8% to $642.72/mt.

U.S. steel plate fell 1.8% to $997/st.

The Chinese neodymium price fell 1.8% to $58,29.10/mt. Chinese silicon rose 0.2% to $1,539.54/mt, while Chinese cobalt cathodes jumped 0.2% to $99,397.20/mt.

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This morning in metals news, China’s export levels fell last month, White House economic adviser Larry Kudlow is optimistic about a U.S.-China trade deal and an Australian gold miner is buying a Canadian copper and gold mine for $806.5 million.

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China’s Exports Take a Dip in February

According to CNBC, China’s exports fell more than 20% in February.

Previous media reports indicated the U.S. and China could be set to ink a deal later this month that could end the current state of trade tensions.

According to the report, China’s February trade balance of $4.12 billion came in well short of economists’ expectation of a balance of $26.38 billion.

Kudlow ‘Bullish’ on China Deal

Speaking of U.S.-China trade talks, White House economic adviser on Sunday said he is still “bullish” on the prospects of a deal with China, Politico reported.

“Across the board, the deal has to be good for the United States and for our workers, and our farmers, and our manufacturing,” Kudlow told “Fox News Sunday,” according to the report. “It’s got to be good. It’s got to be fair and reciprocal and it’s got to be enforceable.”

Newcrest to Buy Canadian Mine for $806.5M

Australian miner Newcrest Mining Ltd. is set to buy a Canadian copper and gold mine for $806.5 million, Reuters reported.

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Newcrest announced it is aiming to purchase a 70% joint-venture interest in the mine, located in British Columbia, from Imperial Metals Corp.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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