The biggest deal of the period was the proposed sale by Rio Tinto and BP of their 50-50 Indonesian joint venture, PT Kaltim Prima Coal, to Jakarta-listed Bumi Resources for US$500 million in cash and assumed debt. The sale will likely be opposed by the regional government of East Kalimantan, where the mine is situated. Under new decentralization laws, the central government last year indicated that East Kalimantan would get a 31% stake in Kaltim, and a state-owned miner would get 20%. Rio Tinto ended the period off 41 at US$81.35 while BP rose $1.69 to $40.99.
Norilsk Nickel is poised to spend US$33 million boosting its interest in Stillwater Mining by 5% to 56%. Using the same terms as its takeover completed last month, Norilsk is offering to buy up to 4.35 million shares at US$7.50 each — a considerable premium given that Stillwater’s shares closed the period up 17 at US$5.03.
Freeport-McMoRan jumped US$1.02 to US$24.93 as it turned in a boffo second-quarter earnings report that saw profits rocket to US$66.9 million on revenues of US$609.5 million. This compares with the US$15 million earned on US$408 million in revenues during last year’s second quarter.
Up 51 to US$11.80, mid-tier gold producer Meridian Gold also produced a solid quarterly report that was highlighted by output from its flagship asset, the El Peon gold mine in Chile, which cranked out 78,000 oz. gold at a cash cost of US$48 per oz. Meridian profited US$9.7 million (10 per share) during the recent quarter and enjoyed an operating cash flow of US$15 million, which helped boost the company’s total cash balance to US$149 million.
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