29th Jun 2020 08:17
(Alliance News) - Rio Tinto said Monday it has reached an agreement with the government of Mongolia on a new source of domestic power for its Oyu Tolgoi copper and gold mine.
Rio said the agreement paves the way for the government to fund and construct a state-owned power plant at Tavan Tolgoi. The miner also said the two sides would work towards finalising a power purchase agreement by the end of March 2021.
Construction of the coal-fired power plant would begin now later than July 2021.
Oyu Tolgoi, located in the South Gobi region of Mongolia, is one of the largest-known copper and gold deposits in the world. It is 550 kilometres south of the capital Ulaanbaatar and is not far from the Chinese border.
The government of Mongolia has a 34% stake in the mine, which Rio Tinto has managed since 2010.
Rio Tinto has run into several problems at the mine. In July last year, first production was delayed for between 16 to 30 months after "stability risks" were discovered in the original approved mining plan. A new one is set to be completed in the first half of 2020.
Rio Tinto shares were down 0.9% early Monday in London.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 6,167.62
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Hang Seng: down 1.2% at 24,250.50
Nikkei 225: closed down 2.3% at 21,995.04
DJIA: closed down 730.05 points, 2.8%, at 25,015.55
S&P 500: closed down 2.4% at 3,009.05
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GBP: up at USD1.2377 (USD1.2326)
EUR: up at USD1.1262 (USD1.1210)
Gold: up at USD1,772.60 per ounce (USD1,760.70)
Oil (Brent): down at USD40.20 a barrel (USD40.70)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
0930 BST UK monetary & financial statistics
1100 BST Ireland retail sales
1100 CEST EU business climate indicator
1400 CEST Germany consumer price index
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Critics have accused Downing Street insiders of making Cabinet Secretary Mark Sedwill the "fall guy" for mistakes made in the handling of the Covid-19 crisis after he confirmed his resignation, PA reports. Sedwill, the most powerful official in government, announced on Sunday he had agreed to pack his bags and stand down from his role as both Cabinet Secretary and the UK's national security adviser. In a letter to Prime Minister Boris Johnson, the 54-year-old said: "We have agreed that I will stand down and leave government service at the end of September." Bob Kerslake, a former head of the Civil Service, along with the civil servants' union accused Number 10 "or those around it" of working to "undermine" the ex-diplomat. Opposition MPs also pointed the finger at the Johnson's chief aide Dominic Cummings, suggesting he played a role in the former Afghanistan ambassador being forced out as head of the Civil Service.
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Coronavirus testing data will be discussed at a Monday morning meeting between Leicester's mayor and UK government officials amid suggestions a local lockdown could be imposed on the city. City Mayor Peter Soulsby and the council's Director of Public Health Ivan Browne will be present to examine the data behind a local surge in Covid-19 cases in recent weeks. Soulsby said the council was only provided with detailed testing information for the first time on Thursday – a week after Health Secretary Matt Hancock announced that there was a local outbreak in the city. According to Public Health England data, almost 3,000 Covid-19 cases have been confirmed in Leicester since the start of the coronavirus epidemic. Of these, 866 cases were reported in the last two weeks.
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Boris Johnson is being out-polled by Labour leader Keir Starmer on who would make a better prime minister, according to new data. A survey by polling company Opinium found that 37% of voters thought Starmer would be better at leading the country than current Downing Street incumbent Johnson. A total of 35% thought Tory leader Johnson was the better option to have in charge.
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Pubs that serve food can reopen on Monday in phase three of the easing of coronavirus restrictions in Ireland. Hairdressers, barbers, gyms, pools, cinemas and churches are also allowed to open. It has been 15 weeks since pubs have been allowed to serve customers inside the premises. Pubs that do not serve food will be allowed to reopen on July 20.
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Ireland's new prime minister, Micheal Martin, said his government's priority would be continuing the fight against the Covid-19 pandemic as he named his cabinet on Saturday. "The shaping of a fair and inclusive recovery will be our priority," he said, announcing a special cabinet committee to deal with the impact of the coronavirus pandemic on the country. He named his predecessor and Fine Gael leader, Leo Varadkar, as his deputy and the minister for enterprise, trade and employment. He said that the new government would take action on climate change and that this was a "challenge which must not just be overcome but which must be turned into a new opportunity." The leader of the Green Party Eamon Ryan was given a newly-created portfolio of climate action, energy and transport.
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Chancellor Angela Merkel hosts French President Emmanuel Macron for talks on Monday, days before Germany takes on the rotating presidency of the EU with the economy in the throes of the most severe storm since World War II. Berlin's chairing of the 26-member bloc will be its last with Merkel in charge, and could be the one that defines the legacy of the leader dubbed the "eternal chancellor". With the future of the bloc's relationship with Britain to be determined, a crucial shift to a lower carbon world in the balance and crises from Libya to Syria all jostling for attention, there is no shortage of burning issues to tackle. In an interview published Saturday, European Commission chief Ursula von der Leyen said it was "very fortunate that Germany is taking over the presidency at this time of a major crisis." Merkel's long experience and credibility "helps enormously," she told the Handelsblatt newspaper.
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BROKER RATING CHANGES
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JEFFERIES CUTS BALFOUR BEATTY TO 'HOLD' ('BUY') - TARGET 260 PENCE
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BERENBERG INITIATES DRAPER ESPRIT WITH 'BUY' - TARGET 680 PENCE
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COMPANIES - FTSE 250
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Oil and gas company Energean amended the terms for its acquisition of Italian utility Edison's exploration & production portfolio. Energean said the deal now will exclude Edison's Norwegian subsidiary. The latest change follows the exclusion of Edison's Algerian asset. The purchase is now valued at USD284 million, as opposed to the original sum of USD750 million. It still includes Edison's UK portfolio, with a stake in Glengorm, the largest gas condensate discovery in the Central North Sea. "We are pleased to have agreed revised terms for our acquisition of Edison E&P, which will now exclude the Algerian assets and Norwegian subsidiary, and for which we have agreed USD466 million of total reductions to the original consideration.," said Energean Chief Executive Mathios Rigas. In addition, Energean cut its 2020 pro forma capital expenditure guidance to a range of USD760 million to USD780 million, from USD840 million previously. Pro forma production guidance for the year is 44,500 to 51,500 barrels of oil equivalent per day.
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Genus said it has appointed Iain Ferguson as its chair-designate. Ferguson, currently the chair of housebuilder Crest Nicholson, will join the Genus board as a non-executive director on Wednesday. Ferguson will succeed Bob Lawson as chair at the company's annual general meeting in November.
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COMPANIES - MAIN MARKET AND AIM
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Indivior said it has promoted Chief Financial & Operations Officer Mark Crossley to chief executive officer to replace Shaun Thaxter, who is stepping down. Crossley has been CFOO of Indivior since February 2017 and joined Indivior in 2012. The drugmaker said Ryan Preblick, currently SVP of global financial planning & analysis commercial operations, has been appointed interim CFO. "It has been an honour and a privilege to lead the development of Indivior as it focused on empowering individuals to overcome their addiction. We have truly been pioneers in developing new treatments and helping to change patients' lives. Indivior has a highly talented management and workforce. I am confident in their ability to deliver against its vision as I prepare for my next business challenge," Thaxter said.
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COMPANIES - GLOBAL
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Toyota Motor said its vehicle sales fell by a third in May when compared to the prior year. The Japanese automotive manufacturer reported worldwide sales - including Daihatsu Motor and Hino Motors - of 609,460 units, down 34% on the prior year. Woldwide sales of only Toyota-branded cars fell by 32% to 576,508 vehicles in May when compared to the year before. Sales of all three brands outside of Japan fell by 33% to 501,223 units, while domestic sales dropped by 39% year-on-year to 108,237 units due to the impact of the stay-at-home requests, the company explained. Going forward, Toyota said it expects the sales volumes in Japan to recover in June. Turning to production, Toyota said it produced 57% fewer vehicles than a year ago, at 408,842. Of these, 365,909 were Toyota-branded vehicles, down 54% on the year before.
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Monday's Shareholder Meetings
Chesterfield Resources
Lookers
Volvere
John Wood Group
Centamin
Predator Oil & Gas
Hawkwing
Mereo Biopharma
Baron Oil
Bonhill Group
Synairgen
Victoria Oil & Gas
WANdisco
Harworth
Mears
Witan Pacific Investment Trust
IQE
BlackRock Latin American Investment Trust
Anglo-Eastern Plantations
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By Tom Waite; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
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