US markets rise, Dec. 27-31

The Dow Jones Industrial Average rose 387.74 points or 1.08% to finish the trading week at 36,338.30 and the S&P 500 gained 40.39 points or 0.86% to 4,766.18. Spot gold climbed US$20.60 per oz. or 1.14% to US$1,829.80 per ounce.

Newmont rose US$2.49 to US$62.02 per share. The company announced on December 20 that it had received net proceeds of about US$992 million after deducting underwriting discounts (before expenses), after closing its registered public offering of US$1 billion of 2.60% sustainability linked senior notes due 2032. The coupon of the notes is linked to Newmont’s performance against key ESG commitments regarding 2030 emissions reduction targets and its target for the representation of women in senior leadership roles.

Vale was the most heavily traded stock, and rose US11¢ to US$14.02. The company confirmed on December 29 that it “has had preliminary discussions with Anglo American  on the possibility to develop, through partnership, the mineral resources of the Serpentina project, held by Vale, aiming to leverage from existing processing and logistics infrastructure at Minas-Rio and Vale’s operations.” Mining rights at Vale’s Serpentina project in Brazil’s Minas Gerais state are contiguous to Anglo American’s Minas-Rio operation.

Shares of Alcoa climbed US22¢ to US$59.58. The company announced on December 29 that it had reached an agreement with representatives of workers at its San Ciprian aluminum plant in Spain “aimed at resolving ongoing challenges that stem from exorbitant energy prices.” Under the agreement, Alcoa will curtail for two years the smelter’s 228,000 tonnes of annual capacity and will only resume operations in January 2024. During the two year period, the casthouse and the San Ciprian alumina refinery will continue to operate normally. “During the curtailment period, Alcoa will seek to secure as soon as possible long-term power purchase agreements, beginning from 2024” it stated in a news release. “Also, the company has committed US$68 million for capital investments and US$35 million for restart costs. As part of the agreement, workers will immediately cease a strike action that has affected both the aluminum smelter and the alumina refinery.” Under the agreement, Alcoa will provide full wages and benefits to its employees during the two-year period, extend the contracts of contractor companies through 2024 and provide a new collective bargaining agreement that includes pay increases extending to the end of 2025, the company said. Alcoa said it anticipates restructuring-related charges of about US$60 million or US32¢ per share in the fourth quarter of 2021. In addition, Alcoa said it expects the San Ciprian aluminium plant will record a net loss before taxes of about US$20-$25 million in 2022 based on current market prices, and forecasts the plant will record a net loss before taxes in 2021 of about US$65 million. It also noted that the average spot market power price in Spain for the month of December was US$276 per megawatt hour.