Canada’s Barrick Gold on Sunday said it has agreed a deal with authorities in Pakistan that will see work at the Reko Diq copper and gold mine resume, though London-listed peer Antofagasta will eventually step aside as a stakeholder.
Antofagasta will exit the project and be replaced by state-owned enterprises in Pakistan.
Work at the asset was suspended back in 2011 due to a dispute about the legality of the licensing process.
Antofagasta’s exit process will see the project reconstituted under Tethyan Copper Co Pty Ltd, a joint-venture controlled by Antofagasta and Barrick.
A consortium of state-owned firms in Pakistan will then acquire shares in the TCC unit that owns the project, in a $900 million deal.
‘Proceeds will be distributed to Antofagasta in return for its exit from the TCC holding structure,’ Antofagasta said.
‘If the conditions to closing are satisfied during 2022, the company would expect to receive those proceeds during 2023,’ it said.
‘The company notes that, although this agreement in principle is an important step towards its exit from the Reko Diq project and the resolution of the International Centre for the Settlement of Investment Disputes litigation announced in July 2019, there can be no certainty that definitive agreements will be finalised or approved, or that the conditions to closing will be satisfied.’
The Chilean miner said the project does not fit into its strategy, which is focused on copper by-products in the Americas.
A roughly $11 billion penalty imposed on Pakistan by the International Centre for the Settlement of Investment Disputes, part of the World Bank, will be waived, Pakistan Prime Minister Imran Khan tweeted.
Antofagasta shares were up 2.9% early Monday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 7,423.46
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Hang Seng: down 1.0% at 21,199.50
Nikkei 225: Tokyo market closed for holiday.
S&P/ASX 200: closed down 0.2% at 7,278.50
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DJIA: closed up 274.17 points, 0.8%, at 34,754.93
S&P 500: closed up 1.2% at 4,463.12
Nasdaq Composite: closed up 2.1% at 13,893.84
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EUR: soft at $1.1050 ($1.1061)
GBP: down at $1.3160 ($1.3178)
USD: flat at JP¥119.20 (JP¥119.15)
GOLD: down at $1,924.35 per ounce ($1,938.46)
OIL (Brent): up at $111.72 a barrel ($107.51)
(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
Japan Vernal Equinox Day. Financial markets closed.
0830 EDT US CFNAI Chicago Fed national activity index
1000 EDT US quarterly financial report - retail trade
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UK Chancellor Rishi Sunak is reportedly gearing up to slash fuel duty in his spring statement as UK Prime Minister Boris Johnson pursues long-term measures to guard against future energy bill pressures. Sunak appeared on Sunday to hint at help for motorists in his so-called ’mini-budget’, with measures to prevent filling up cars from being ‘prohibitively expensive’ expected to be unveiled on Wednesday. There are suggestions the chancellor could temporarily cut fuel duty by as much as 5p per litre to support families and businesses through the cost of living crisis, PA reported. Forecourt prices have risen sharply since Russia’s invasion of Ukraine, with average prices at a record 165.9p per litre for petrol and 177.3p per litre for diesel. With pressure mounting on Sunak to act, he told the BBC on Sunday that ‘of course’ he was prepared to step-in to help those on tightly-squeezed budgets. However, the No 11 incumbent added that he ‘can’t solve every problem’ as he conceded Britons faced a ‘difficult’ time amid ballooning inflation.
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UK house prices registered their largest March increase for nearly 20 years, figures by property portal Rightmove showed. UK house prices hit a record high of £354,564 in March, up 1.7% monthly. It was the largest monthly increase in March since 2004. On an annual basis, prices surged 10%, the chunkiest annual increase since June 2014. ‘This unprecedented price level is being stoked by the greatest imbalance between buyer demand and the number of properties available for sale that we have ever measured at this time of year. This is the strongest spring sellers’ market that we have ever seen in several metrics,’ Rightmove said.
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BROKER RATING CHANGES
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Exane BNP cuts Segro to ’neutral’ (’outperform’) - target 1,140 (1,530) pence
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Jefferies starts St James’s Place with ’buy’ - price target 1,740 pence
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Jefferies cuts Hargreaves Lansdown to ’underperform’ (hold) - price target 820 (1,100) pence
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COMPANIES - FTSE 250
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Trading platform Plus500 is venturing into the Japanese retail trading market through the acquisition of EZ Invest Securities for an undisclosed sum. EZ Invest is licenced as a type 1 Financial Instruments Business Operator, regulated by Japan’s Financial Services Agency and a member of the Japan Securities Dealers Association and the Financial Futures Association of Japan. EZ Invest’s offering includes contract-for-difference and over-the-counter foreign exchange. Plus500 said the acquisition represents a major growth opportunity for the company and further strengthens its strategic position as a multi-asset fintech group. Further, the purchase diversifies its geographic footprint through an immediate presence in the retail trading market in Japan, the company noted.
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PZ Cussons has acquired UK-based baby and child personal care products maker Childs Farm. The company said Joanna Jensen, founder of Childs Farm, subsequently made an investment into the PZ Cussons subsidiary that made the acquisition. This means that PZ Cussons now holds a 92% interest in Childs Farm for a total of £36.8 million, with an agreed path to full ownership by the end of May 2025. PZ Cussons said the deal is fully funded by cash from existing facilities, reflecting its ‘strong financial position’. Chief Executive Officer Jonathan Myers said: ‘Childs Farm is a clear leader in sustainability, demonstrating that we share a strong ethos, as PZ Cussons journeys towards our own ’B Corp’ ambition. We look forward to welcoming Childs Farm to the PZ Cussons family as a ’Must Win Brand’, and to driving the next stage of its growth both in the UK, and beyond.’
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COMPANIES - MAIN MARKET AND AIM
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Photo-Me International said it delivered a strong performance in 2021 with a progressive recovery in demand for vending services seen across most of its key markets. For the year that ended October 31, Photo-Me posted a pretax profit of £28.6 million, swung from a £27.8 million loss in financial 2020, on revenue of £214.4 million, up from £186.3 million. The company explained that it benefited from completion of its restructuring programme to remove unprofitable machines from its estate - mainly photobooths and children’s rides - which was completed in April 2021. As such, total revenue and pretax profit were at the upper end of the company’s own expectations. Photo-Me declared a 2.89 pence annual dividend, having paid out nothing in financial 2020. Photo-Me made no comment on the failed offer for all of the company by CEO & Deputy Chair Serge Crasnianski, which lapsed earlier this month. Crasnianski owns about 37% of Photo-Me via investment vehicle Tibergest.
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COMPANIES - GLOBAL
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Troubled Chinese property developer giant China Evergrande and all its units suspended trading in Hong Kong Monday morning, according to a notice to the stock exchange. China’s property firms have struggled in the wake of Beijing’s drive to curb excessive debt in the real estate sector, as well as rampant consumer speculation. Among those embroiled in the crisis is Evergrande, one of the country’s largest developers, which has been involved in restructuring negotiations after racking up $300 billion in liabilities. On Monday, the company announced that trading will be ‘halted’ without giving a reason. Shares of Evergrande Property Services Group and China Evergrande New Energy Vehicle Group were suspended. The suspension – the second this year – comes ahead of an expected $2 billion repayment obligation on Wednesday, and another next month of $1.4 billion.
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Monday’s shareholder meetings
Aferian PLC - AGM
Altona Rare Earths PLC - AGM
Helical PLC - GM re becoming REIT & buyback
Inland Homes PLC - AGM
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