5E Advanced Materials Gears Up For Production, Alcoa's Big Acquisition, Vale's Strategic Divestment, And More: Monday's Top Mining Stories

Top Stories for Feb. 26, 2024:

1. 5E Advanced Materials FEAM is moving closer to initial production at its 5E Boron Americas Complex.

Since the launch of the mining operations last month, the company has successfully run all four production wells to extract boric acid and lithium, with head grade and recovery rates in line with historical expectations.

Final electrical engineering work is nearly complete, the personnel to run the plant are in place and the plant is on track to be commercially operational starting CY Q2 2024.

Chief Executive Officer Susan Brennan said, “This is an exciting time for all stakeholders of the company as we finalize a number of initiatives that will see us commence initial production next quarter... Our operations team is working diligently to transition our facility to operational status, and we are concurrently ramping up our commercial and marketing activities in order to leverage the value of our boron and lithium with potential customers.”

2. Alcoa Corporation AA plans to acquire Alumina Limited AWCMF, with Alumina's board likely recommending the all-stock deal to its shareholders that would include 0.02854 Alcoa shares for each Alumina share, valuing Alumina at about $2.2 billion.

This move aims to strengthen Alcoa's position in the bauxite and alumina markets, offering Alumina shareholders a chance to benefit from a more diversified and financially robust company while creating long-term value for both sets of shareholders.

Alumina's largest shareholder, Allan Gray Australia, agrees to potentially sell up to 19.9% of Alumina's shares to Alcoa.

3. Vale Base Metals VALE announced that Vale Canada Limited and Sumitomo Metal Mining SMMYY have agreed to sell a 14% combined stake in PT Vale Indonesia to PT Mineral Industri Indonesia, making it PT Vale's largest shareholder with a 34% stake.

After the transaction, Vale Canada and Sumitomo Metal Mining will own 33.9% and 11.5% of PT Vale, respectively, with the remaining 20.6% publicly traded on the Indonesia Stock Exchange.

This divestment is part of PT Vale's obligation to transfer 51% ownership to Indonesian entities by December 2025 to extend its operating license, following a 2014 amendment to its original 1996 contract with the Indonesian government.

4. Alpha Metallurgical AMR announced fourth-quarter and full-year 2023 financial results.

The company reported a fourth-quarter net income of $176 million ($12.88 per diluted share) and an adjusted EBITDA of $266.3 million, compared to the third quarter's net income of $93.8 million ($6.65 per diluted share) and adjusted EBITDA of $153.9 million.

The company completed the year with more than a billion dollars in adjusted EBITDA and is continuing to progress its share buyback program, with roughly $1.1 billion returned to shareholders since inception.

Alpha also announced that its board members Michael J. Quillen and Albert E. Ferrara, Jr. will not stand for election per the company’s guidelines prohibiting candidates beyond the age of 75.

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