Apr 2, 2021

South32 to close South African coal unit sale with Seriti

South32
SeritiResources
Coal
Energy
Daniel Brightmore
2 min
South32
South32 will provide up to $250mn in funds to smooth the sale of its South African energy coal business to mining group Seriti Resources...

South32 will pay $200mn across a decade to partly fund costs of the environmental clean up of the mines of its South Africa Energy Coal unit once they close, and a $50mn facility to pay for the costs of restructuring some loss-making mining sites, it said.

The deal would allow South32 to reshape its business by exiting the thermal coal sector at a time when many banks and insurers are scaling back financing for the sector because of global warming concerns, reports Reuters.

Miners typically guarantee a larger portion of funds to cover rehabilitation costs if a buyer is small, to assure governments they won’t have to foot the bill, said analyst Peter O’Connor, at Australian investment firm Shaw and Partners.

“It’s a step backwards to go forward, but the key here is that they (South32) need to do this deal, it has been a burden on them for so long, it makes a cleaner, simpler, leaner business,” O’Connor said.

Coal’s deteriorating demand outlook may play a larger part in future divestment and spin-off plans being considered by majors BHP Group, Anglo American Plc and Glencore, he added.

South32 announced the divestiture in November 2019 with Seriti initially providing a 100 million South African rand ($6.7 million) upfront payment and South32 receiving deferred payments based on future cash flows from the mines until March 2024, capped at 1.5 billion rand ($101.49mn) per year.

However, South32 agreed to drop the deferred payment plan and has downgraded the 100 million rand price to a nominal fee.

The sale to Seriti is expected to close before the financial year end, South32 Chief Executive Graham Kerr told a media call, as talks over terms of a coal supply deal with state-run South African power provider Eskom continue and it waits for approval from the South African Treasury.

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Jun 29, 2021

Vale invests $150mn to extend life of Manitoba operations

Vale
Nickel
Manitoba
battery metals
2 min
Vale’s $150mn investment in operations at Thompson, Manitoba will extend mine life by 10 years

Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.

Global energy transition is boosting the market for nickel

The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.

“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.

“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”

Vale continues drilling program at Manitoba

Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.

“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.

“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”

The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history.  Mining of the Thompson orebody began in 1961.

“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.

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