Severstal Reports December Quarter 2017 Results for Russian Operations 23 Jan 2018
Russian integrated steel producer Severstal reported total iron ore internal and external product sales were up 28% quarter on quarter to 4.4Mt in the December Quarter of 2017. Of that, pellet sales were up 39% quarter on quarter to 3.3Mt, due to realization of finished goods in transit. Meanwhile, iron ore concentrate sales were up 6% quarter on quarter to 1.1Mt, reflecting the consolidation of the Yakovlevskiy mine. Total external iron ore sales were up 64% from the previous quarter to 2.2Mt, with pellet sales accounting for approximately 96% of total external sales. 47% of pellet export sales were to Middle East, 45% to Europe while the remaining 8% to other countries. In 2018, Severstal Resources expects an increase in production volumes of an additional 40kt of pellets at Karelsky Okatysh. The company estimates Yakovlevskiy mine’s production to be around 1.3Mt in 2018.
Fire at AK Steel Middletown Halts Production 23 Jan 2018
A fire has broken out at AK Steel’s 2.5Mtpa Middletown, Ohio plant in the United States. Molten metal spilt from a steelmaking ladle is reported to have initiated the fire. No personnel were injured by the incident. The plant will be offline for at least eight days during which time AK Steel is shifting production to their other subsidiaries to meet existing order deadlines. AK Steel Middletown produces electroplated and galvanised hot and cold rolled coil in various grades including stainless steel and aluminium.
Tiger Resources to Sell Kipoi and Other DRC assets for US$260m 23 Jan 2018
Tiger Resources has entered into a Share Purchase Agreement and Royalty Deed with Sinomine Fuhai (Hong Kong) Overseas Resource Investment for the sale of all shares in the Kipoi and Lupoto projects and La Patience permit in the DRC. Tiger is entitled to receive consideration of US$260m, plus royalty payments from revenue from the sale of copper and cobalt by Sinomine HK of up to US$20m. Copper cathode production for the first nine months of 2017 from Kipoi was 12.9kt. Stockpiles of heap leaching feed material were depleted in October 2017. Heap leaching stacking activities have been suspended until the re-commencement of mining from Kipoi Central or an alternate source of heap leach feed is sourced.
Arizona Mining Releases New PEA for Hermosa 23 Jan 2018
Arizona Mining has released a new preliminary economic assessment (PEA) for its Hermosa project in the United States. Positive changes from the 2017 PEA include a 59% increase in mineable resource which has extended the mine life by ten years, a 30% increase in annual payable silver production (174tpa) and a 57% increase in Arizona’s NPV estimation to US$1,979m. However, pre-production capex is now expected to be 14% higher at US$519m, annual payable zinc production is forecast to be 6% lower at 96kt, and mining costs will be approximately 8% higher at US$38/t. The payback period has been marginally reduced from 1.7 to 1.6 years. In 2018, Arizona Mining will continue to drill Hermosa while also initiating an exploration decline to the deposit. The expected production start date of Hermosa remains unchanged at 2020.
Alamos Produces 0.4Moz in 2017, up 9.5% YoY. Expects 0.5Moz in 2018 23 Jan 2018
Alamos Gold has reported group gold production of 429koz for 2017, up 9.5% year on year. The results saw Alamos reach the upper end of its 2017 guidance range of 400-430koz. The increase was primarily driven by the ramp-up of underground mining at Young-Davidson, which saw an 18% jump in gold output to 200koz. Production was also bolstered by one-month of production from Island Gold following the acquisition of Richmont Mines in November 2017. Alamos expects group gold output in 2018 to rise approximately 16% to 480-520koz, reflecting the inclusion of the100kozpa Island Gold mine. Group 2018 all-in sustaining costs (AISC) are forecast at US$950/oz to rank Alamos in the third quartile of AME’s global AISC curve.
China’s Industrial Production Accelerated in Dec 2017, up 6.2% Year on Year 23 Jan 2018
Industrial production growth in China accelerated in December 2017, rising 6.2% year on year after posting 6.1% in November and exceeding market expectations of a 6.0% rise. Output accelerated for textiles (3.9% from 2.0% in November), chemicals (3.7% from 3.1%) and transport equipment (9.1% from 8.1%), and power equipment surged (7.2% from 3.5%). Rates of growth moderated for non-metal minerals (0.8% from 2.6%), general equipment (8.5% from 8.9%), machinery (9.9% from 10.5%) and communications (12.4% from 15.0%). The improvement in industrial activity verifies steady growth in the wider economy after China posted strong GDP growth in the December Quarter. Despite this, environmental protection and clean-up efforts are in full swing through the peak heating season and should see a moderation of industrial production in the March Quarter of 2018.