There’s been quite a bit of news flying around the metals mining sector lately. The situation remains fluid and dynamic for many gold miners and silver miners who are trying to adjust to what appears to be a prolonged period of lower price levels for the precious metals. While the recent spike in precious metal prices has certainly been welcome by the mining industry, many miners’ fates still rest on whether or not they can turn a profit amid the “new normal” of lower spot prices.
Read more for a rundown on all of the biggest stories in mining today.
In an effort to avoid another labor strike like the one that dragged on for months during 2014, South Africa’s National Union of Mineworkers (NUM), the largest of its kind in the country, appears to be getting on board with the most recent wage increase proposal from the mining firms that employ its members.
The NUM (along with the country’s second-largest labor union representing mineworkers, the Association of Mineworkers and Construction Union, or AMCU) has been in ongoing talks with three of South Africa’s major miners—AngloGold Ashant (NYSE:AU; ASX:AGG; JSE:ANG), Sibanye Gold (NYSE:SBGL; JSE:SGL), and Harmony Gold Mining (NYSE:HMY)—for a new agreement that calls for an increase in entry-level wages. Now, the NUM’s leadership has advised its members to accept the latest proposal from the group of mining companies.
The Canadian mining company Torex Gold Resources (TSX:TXG) has announced that one of its mines in southwest Mexico, the Morelo Gold Property, will be receiving a permanent police presence in cooperation with the local Ministry of Public Safety. The measure is expected to secure the area for Torex’s two major mining projects located within, the Media Luna Project and the Limon-Guajes Mine.
Surviving Falling Prices
Gold and silver were not the only commodities hit by the downtrend in prices. Platinum and palladium (with their heavy use in automobiles) along with the semi-precious metal copper have all suffered greatly in their own rights. Both Platinum Group Metals have lost more than a quarter of their value year-to-date after outlasting their more familiar precious cousins (gold and silver) before succumbing to the bear market.
Copper has shared a similar fate, plunging in value by over 20% year-over-year as the slowdown in China causes copper producers to cut their demand projections. (China is the world’s greatest consumer of copper.) Over that span, major miner Glencore PLC (LON:GLEN) has seen its stock price fall nearly in tandem with the red metal. With industry bellwethers like Glencore sinking, the prospects for a swift recovery looks more and more unlikely.
Another major miner, Barrick Gold (NYSE, TSX:ABX) is attempting to speed up its debt-reduction program by selling off several of its U.S.-based assets. Not only will Barrick shutter its Salt Lake City offices, it will also be selling half a dozen of its operations in the American West. Newmont Mining (NYSE:NEM; TSX:NMC) and Kinross Gold (NYSE:KGC; TSX:K), a pair of other large players in the industry, are expected to scoop up Barrick’s mines to the tune of $700 million. Barrick’s share prices are wallowing near 25-year lows, falling below $10 per share for the first time since 1989.
Silver Wheaton Approved
Silver Wheaton Corp. (NYSE, TSX:SWL) had its recent proposal for a normal course issuer bid (NCIB) approved by the Toronto Stock Exchange (TSX or TSE). Essentially, this will allow Silver Wheaton to repurchase more than 20 million of its outstanding company shares over the next year. (Approved NCIBs are limited to 25% of the average daily volume of shares traded.) The proposal had previously been okayed by the New York Stock Exchange, as well.
Second Sale for Freeport
Freeport-McMoRan Inc. (NYSE:FCX) is following up a billion-dollar fund raising effort last month by issuing another $1 billion in new shares as a way to combat the painful downward spiral for commodity prices. The slump in copper prices has been especially harmful to the bottom line of the world’s third-largest mining firm. One encouraging sign came in the form of activist investor Carl Icahn: the outspoken venture capitalist has acquired an 8.5% stake in Freeport, and it remains to be seen how the mogul will attempt to influence the company’s structure or strategy.