(Alliance News) - Hochschild Mining on Monday warned of a regulatory threat to its mines in Peru.
Shares in the FTSE 250 constituent dropped 45% at the open in London.
Hochschild said it has become aware that the Peruvian head of Cabinet is potentially looking to close some mining projects in southern Ayacucho, including Hochschild's Pallancata and Inmaculada mines, due to "alleged environmental complaints".
"The company has not received any formal communication from the government regarding this matter," the miner said.
It learnt through various media outlets of the minutes of the meeting, which say that a commission has been constituted to negotiate the closure of mines. The head of Cabinet subsequently indicated that approvals will no longer be granted for additional mining or exploration activities, Hochschild said.
"The company believes this conduct by the Peruvian head of Cabinet is not in accordance with Peruvian law and is wholly without merit," it said. "Accordingly, Hochschild will vigorously defend its position and take all action necessary to ensure that the rights of the company and its wholly-owned subsidiaries under Peruvian and international law are respected."
The miner said it "operates under the highest environmental standards and applies industry best practice".
"As such, Hochschild categorically rejects any inference with regard to environmental pollution. The company's sustainable operations are strictly regulated and supervised by several Peruvian regulatory bodies and our activities remain in compliance with their requirements," it added.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 7,254.36
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Hang Seng: down 0.4% at 24,951.34
Nikkei 225: closed up 0.1% at 29,774.11
S&P/ASX 200: closed down 0.6% at 7,353.10
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DJIA: closed down 268.97 points, or 0.8%, at 35,601.98
S&P 500: closed down 6.58 points, or 0.1%, at 4,697.96
Nasdaq Composite: closed up 63.73 points, or 0.4%, at 16,057.44
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EUR: sharply lower at USD1.1266 (USD1.1320)
GBP: down at USD1.3430 (USD1.3460)
USD: up at JPY114.20 (JPY113.86)
GOLD: down at USD1,843.30 per ounce (USD1,859.72)
OIL (Brent): soft at USD78.90 a barrel (USD79.05)
(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
1600 CET EU flash consumer confidence indicator
1100 GMT Ireland wholesale price index
1000 EST US existing home sales
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Ahead of the Christmas holidays, Austria shut its shops, restaurants and festive markets Monday, returning to lockdown in the most dramatic Covid-19 restriction seen in Western Europe for months. The decision has prompted a fierce backlash, with tens of thousands taking to the streets, some blaming the government for not doing more to avert the latest coronavirus wave crashing into Europe. As they wake up Monday morning, Austria's 8.9 million people will not be allowed to leave home except to go to work, shop for essentials and exercise. The Alpine nation is also imposing a sweeping vaccine mandate from February 1 – joining the Vatican as the only places in Europe with such a requirement. Battling a resurgent pandemic almost two years since Covid-19 first emerged, several countries on the continent have reintroduced curbs, often choosing to ban unvaccinated people from venues like restaurants and bars. But not since jabs became widely available has a EU country had to re-enter a nationwide lockdown.
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BROKER RATING CHANGES
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GOLDMAN SACHS RAISES SSE PRICE TARGET TO 1910 (1878) PENCE - 'BUY'
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COMPANIES - FTSE 100
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BHP finalised the merger of its oil and gas arm with Sydney-listed Woodside. The all-stock merger will see Woodside shareholders have 52% of the new company and BHP shareholders 48%. Completion of the deal is targeted in the second quarter of 2022. The combined entity will be the largest energy company listed on the ASX exchange in Sydney, Woodside said. In addition, the Scarborough liquefied natural gas project Pluto Train 2 developments were approved, Woodside said. In announcing a final investment decision, Woodside said USD12.0 billion will be spent on the projects.
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Royal Dutch Shell announced plans to purchase online energy retailer Powershop Australia for an undisclosed sum. Powershop Australia is an electricity and gas retailer serving more than 185,000 customers in the Australian residential and small business markets. The company will form Shell's residential power platform in Australia, it said. The purchase is subject to regulatory approvals and is expected to be completed in the first half of 2022.
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COMPANIES - FTSE 250
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Seal and cables maker Diploma recorded strong annual profit growth driven, it said, by organic growth initiatives and better demand. For the financial year that ended September 30, pretax profit jumped 45% to GBP96.6 million from GBP66.7 million the year before. Operating profit was up 49% to GBP104.3 million from GBP69.8 million. Revenue increased 46% to GBP787.4 million from GBP538.4 million. Chief Executive Johnny Thomson said: "We have delivered strong results, including underlying growth and margin well ahead of our financial model. We have made significant strategic progress, including a record year for acquisitions, as we continue to develop high-quality scalable businesses for organic growth." Diploma declared an annual dividend of 42.6 pence, up 42% from 30.0p the year before. "Despite market uncertainties, I remain confident in our ability to deliver attractive long-term growth at sustainably high margins," Thomson added.
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COMPANIES - MAIN MARKET AND AIM
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Polar Capital Holdings said assets under management saw strong growth in the first half of its financial year, hitting GBP23.4 billion at the end of September versus GBP20.9 billion on March 31. "Our diverse and differentiated range of sector, thematic and regional fund strategies and our performance led culture where 74%, 93% and 99% of our AuM is in the top two quartiles against peers over three years, five years and since inception respectively together with significant remaining capacity provides confidence that momentum will continue," Chief Executive Gavin Rochussen said. The asset manager recorded pretax profit of GBP31.7 million in the first half, up from GBP27.0 million a year earlier. Core operating profit surged to GBP36.3 million from GBP22.0 million. Net management fees increased to GBP92.9 million from GBP61.8 million. Polar Capital declared an interim dividend of 14.0p, up 56% from 9.0p a year before.
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Monday's Shareholder Meetings
Allergy Therapeutics PLC - AGM
Crystal Amber Fund Ltd - AGM
Mila Resources PLC - GM re placing, subscription and buy of Kathleen Valley stake
Mountview Estates PLC - GM re director re-appointments
Norish PLC - EGM re name change, share subdivision and change in articles of association
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By Tom Waite; thomaslwaite@alliancenews.com
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