US markets rise, Jan. 31-Feb. 7: Arch Coal, Peabody Energy, Alcoa; Lithium Americas

The Dow Jones Industrial Average rose 3.0% to 29,102.51 and the S&P 500 advanced 3.17% to 3,327.71. Spot gold fell US$18.50 per oz. to finish the trading week at US$1,570.00 per oz.

Arch Coal rose US$4.16 to US$55.69 per share. The company reported a net loss of US$8.6 million or US57¢ per diluted share in the fourth quarter of 2019, compared with net income of US$86.1 million or $4.44 per diluted share in the prior-year period.  At year-end, the company had invested US$827.4 million since May 2017 to buy back 10.1 million shares while returning an additional US$85.9 million to shareholders through its quarterly dividend.

Peabody Energy’s shares climbed US$1.74 to US$8.50. Full-year 2019 revenues totalled US$4.62 billion, compared to US$5.58 billion in the prior year on an 11% decline in volumes and lower pricing, reflecting industry conditions.  Its loss from continuing operations, net of income taxes, totalled US$188.3 million, while adjusted earnings before interest, taxes, depreciation and amortization totalled US$837.1 million.

Alcoa advanced US$1.60 to US$15.55 per share. The company sold its Gum Springs waste treatment business for US$200 million in cash. As a result, the company expects to recognize a gain of about US$175 million in the first quarter of 2020 and an annual net income improvement of about US$10 million. The sale is part of the company’s plan to sell non-core assets generating between US$500 million and US$1 billion in cash. Gum Springs operates a 1,300-acre hazardous waste treatment business in Arkansas.

Shares of Lithium Americas rose 10.4% to US$4.14. The company announced that its joint-venture partner Ganfeng Lithium has increased its interest in the Cauchari-Olaroz project in Argentina’s Jujuy province to 51% from 50% for an investment of US$16 million. Lithium America’s share is now 49%. The revised structure of the partnership will improve Ganfeng’s financial flexibility and position regarding regulatory approvals in China, Lithium Americas said. Lithium Americas also will get US$40 million in cash from loans from Ganfeng. Cauchari-Olaroz remains on budget and schedule to start production in early 2021, and US$186 million of US$565 million in pre-production capex has been spent as of Dec. 31, 2019.