US markets post gains, Dec. 23-27: Vale, Hecla

The S&P 500 Index rose 0.58% to 3,240.02, making 2019 the best year for stocks on the S&P 500 since 1997. The Dow Jones Industrial Average gained 0.67% to 28,645.26 and spot gold hit US$1,510.80 per oz., a 2.19% weekly gain.

Vale was the most traded stock and fell US5¢ to US$13.22. The company announced a deal to sell its 25% stake in the Chinese company Henan Longyu Energy Resources to the Yongmei Group for US$152 million. Longyu operates two coal mines in China’s Henan province, producing 3.4 million tonnes per year of metallurgical and thermal coal. Yongmei controls Henan Longyu Energy Resources. The sale is expected to close in the first quarter of 2020. Vale also released a long-awaited report in mid-December from a panel of experts on the technical causes of the Feijao Dam 1 failure at its Corrego do Feijao mine in Brumadinho, Minas Gerais state. The tailings dam failure on Jan. 25 killed 257 people and left 13 others missing for an assumed death toll of 270. The report found that the failure was “unique in that it occurred with no apparent signs of distress prior to failure.” The report also stated that “analyses of the stress state within the dam showed that parts of the dam were under very high loading due to the steepness of the dam, the heavy weight of the tailings, and the high internal water level. The combination of a steep upstream-constructed dam, high water level, weak fine tailings within the dam, and the brittle nature of the tailings created the conditions for failure.”

Shares of Hecla Mining were up 31¢ to US$3.31. In mid-December, the company announced that union workers had voted not to ratify a tentative agreement reached by the United Steelworkers and Hecla’s negotiating committee, and said it planned to “accelerate hiring and utilizing contractors with the goal of reaching full production by year-end 2020” at its Lucky Friday mine. “For much of 2019 we have employed a number of hourly workers, who, combined with our salaried workforce, have operated the Lucky Friday mine on a limited basis,” stated Phillips S. Baker Jr., Hecla’s president and CEO. “While we would have preferred ratification of the agreement reached by the two negotiating committees, after three years of negotiating, we believe the best interests of the company and community is [to have] Lucky Friday in full operation.”