US markets move higher, Nov. 7-11

Expectations by many that Donald Trump’s electoral victory would boost the U.S. economy sent the Dow Jones Industrial Average up 5.4%, or 959.38 points, to 18,847.66. The S&P 500 Index also gained, rising 3.8%, or 79.27 points, to 2,164.45. The Philadelphia Gold & Silver Index fell 11.07 points, or 12.4%, to 78.05.

Shares of Vale were the second most traded, and rose 15% to US$7.69. On Nov. 11, Vale announced that a court in Brazil’s Minas Gerais state had ruled that both Vale and BHP Billiton have 30 days to come up with US$354 million to fund initial clean up at their joint-ventured Samarco iron ore mining complex. The partners also must prove within 90 days that the tailings dam failure, which occurred in November 2015, has been fully contained, and within six months, present plans on how they will complete the clean up. The tailings dam failure sent 60 million cubic metres of mine waste and sludge into Brazil’s Rio Doce river system, killed 19 people, and destroyed 200 homes and several small communities.

Rio Tinto’s shares rose US$5.15 to US$39.08, despite news of a potential bribery probe involving its Simandou iron ore project in Guinea. The company announced on Nov. 11 that it had alerted authorities in the U.K. and the U.S., and was contacting authorities in Australia, about email correspondence from 2011 relating to US$10.5 million in contractual payments for consultant services. Rio Tinto said it became aware of the email correspondence on Aug. 29, and launched an investigation into the matter led by external counsel. Based on this investigation, it said, it is taking steps to notify authorities and suspend Alan Davies, the company’s chief executive of energy and minerals, who the company said had accountability for the Simandou project in 2011. Last month, Rio Tinto announced that it had signed a non-binding agreement to sell its entire stake in Simandou to Chinalco for payments of US$1.1 to $1.3 billion, based on the project’s development. Under the agreement, the initial payment for shares would start at the time of commercial production, on a per-tonne basis.


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