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South32 OKs 4.3B rand Klipspruit extension, considers South African coal listing

TOP NEWS

South32 OKs 4.3B rand Klipspruit extension, considers South African coal listing

South32 Ltd. approved a 4.3 billion South African rand investment to extend the life of its Klipspruit coal project in South Africa by about 20 years. Development is expected to start in the current quarter, with first coal expected from the open-cut operation in fiscal 2019. Meanwhile, the company plans to start managing South Africa Energy Coal as a stand-alone business from April 2018 and may ultimately list it on the Johannesburg Stock Exchange.

Court battles at Gecamines could disrupt DRC cobalt output through 2020

Cobalt production is expected to remain suspended at the Lubumbashi cobalt operation in the Democratic Republic of the Congo until at least 2020 due to two international court proceedings against state miner Gecamines SA, Bloomberg News reported, citing two people familiar with the matter. Gecamines' joint venture partner, GTL, is suing the company in the commercial court in Brussels for damages arising from blocking access to the cobalt mine in March. After blocking GTL, Gecamines brought in Shamrock Global Inc., which petitioned the International Court of Arbitration to decree if Gecamines breached a July 2016 deal to grant Shamrock access to Lubumbashi after GTL's contract ended. The country's production accounts for roughly two-thirds of global cobalt supplies.

Venezuela settles US$1.2B dispute with Crystallex over Las Cristinas gold mine

The Ontario Superior Court ratified the settlement of a US$1.2 billion dispute between Crystallex International Corp. and Venezuela for an undisclosed amount, Bloomberg News reported. In 2016, the miner was awarded US$1.2 billion in damages and US$200 million in interest by the International Centre for Settlement of Investment Disputes related to the South American country's seizure of the Las Cristinas gold mine.

DIVERSIFIED

* A group of investors wrote to Rio Tinto's board, expressing concern after reports emerged that Mick Davis was a leading candidate for the chairman post at the mining giant, London's Financial Times reported. People familiar with the situation told the paper that the letter by the Investor Forum could damage Davis' chances of securing the job. Sources told Sky News that the mining giant will not consider Davis as Jan du Plessis' possible successor due to shareholder opposition.

* Rio Tinto and China Minmetals Corp. signed a technical collaboration agreement on mineral exploration.

BASE METALS

* Mining authorities from Argentina and Chile signed a new protocol concerning McEwen Mining Inc.'s Los Azules copper project in Argentina's San Juan province, located near the Chilean border. The governments established guidelines to facilitate prospecting and exploration works in areas surrounding the project, daily Diario de Cuyo reported.

* Production was suspended at Boliden AB's Garpenberg zinc mine in Sweden, after smoke was detected about 700 meters deep in the mine the morning of Nov. 24. All underground employees were evacuated safely, and an investigation was launched into the cause of the incident. The company said underground production was expected to resume in the evening on the same day.

* The Chilean copper commission raised the copper price forecast for 2018 to US$2.92 per pound, compared to a forecast of US$2.60 per pound for 2017, S&P Global Platts reported. Stronger demand is expected from China on the back of higher-than-expected GDP growth in the first half of the year.

* Mincor Resources NL's partner in the Tottenham copper project in New South Wales, Australia, Bacchus Resources Pty. Ltd., secured an initial 19.88% interest in the joint venture.

* The 24-hour strike at BHP Billiton Group's majority-owned Escondida copper mine in Chile concluded Nov. 24, but union official Carlos Allendes warned of further labor action Nov. 29 over the company's planned layoffs, Reuters reported.

PRECIOUS METALS

* Metallurgical testing at Vista Gold Corp.'s Mount Todd gold project in Australia's Northern Territory indicated the potential for finer grind size, higher gold recoveries and production, with lower processing costs and no material increase in project CapEx by automated sorting and a redesigned, second-stage grinding circuit. Results from the testing will be included in an updated preliminary feasibility study slated for completion in the first quarter of 2018

* Gold production was generally up in the September quarter. Across all reporting producers, mined output increased about 300,000 ounces quarter over quarter and more than 500,000 ounces when compared with the year-ago period. However, while many producers reported a significant increase in mined production, it was not universal and excluded the two largest gold producers, Newmont Mining Corp. and Barrick Gold Corp.

* KEFI Minerals Plc expects the bonds for the US$140 million infrastructure finance lease facility for the development of the Tulu Kapi gold project in Ethiopia to be placed in the first quarter of 2018, with drawdown expected soon after. Project construction is expected to take place over 2018 to 2019, with production commissioning at the end of 2019.

* Metminco Ltd. estimated a maiden ore reserve for its Miraflores gold project in Colombia of 4.3 million tonnes at 3.29 g/t of gold and 2.77 g/t of silver, for 457,000 ounces of gold and 385,000 ounces of silver.

* Burkina Faso's minister of mines decided to temporarily suspend access to Indigo Exploration Inc.'s Hantoukoura permit, part of the Kodyel gold project, until the border with Niger is physically demarcated. No exploration work will be allowed on the permit during the suspension period.

* Transition Metals Corp.'s 39.9%-owned Canadian Gold Miner Corp. concluded the acquisition of the DeSantis gold project and an option on the Catharine property, both in Ontario, from Osisko Mining Inc. for 2.5 million common Canadian Gold Miner shares valued at 20 Canadian cents apiece.

BULK COMMODITIES

* As Chinese pollution control measures prompt steel mills to cut production, Fortescue Metals Group Ltd. is being forced to sell its iron ore product with 58.3% content at a higher discount of 29% for December deliveries, compared to 25.5% in November and 8.5% in January, The Australian Financial Review reported, citing traders. However, the discount on the company's lowest-grade 56.7% ore was unchanged at 40% but increased from 16% at the start of the year.

* The Queensland Labour party is tipped to win the popular vote and form a majority government in the Australian state parliament, although it will be several days before the full election results are in, according to several media outlets. The party had said it would veto federal government funding assistance for Adani Enterprises Ltd.'s giant Carmichael coal mine in the state, whereas the rival Liberal National Party came out in favor of the A$900 million Northern Australia Infrastructure Facility, citing the project's economic benefits.

* Verde AgriTech PLC said a pre-feasibility study for the phased expansion at its Cerrado Verde potash project in Brazil estimated an after-tax net present value of US$1.98 billion, using an 8% discount rate, and internal rate of return of 290%. Total CapEx was pegged at US$369.5 million. The study considered the production of 25 million tonnes per year of its Super Greensand fertilizer product in the third phase of production.

* ThyssenKrupp AG started talks with unions protesting job cuts flagged for once it closes the merger of its European operations with Tata Steel Ltd.'s, Reuters reported. A representative of the IG Metall trade union said the parties had consented to an independent assessment of the agreement with Tata as well as the risks stemming from the Indian steelmaker's pension obligations to U.K. employees.

* Exxaro Resources Ltd. expects its total coal production to increase 8% to 46.4 million tonnes this year, compared to the output in 2016. Thermal coal production will increase 8% to 44.1 million tonnes and metallurgical coal output will jump 10% to 2.2 million tonnes, according to the forecast. Total coal sales are expected to improve by 2% to 44.8 million tonnes.

* Universal Coal Plc wholly acquired the Eloff project in South Africa. The project is adjacent to the company's Kangala colliery.

* Ironveld Plc now has enough working capital to meet its requirements until Dec. 31, 2018, after it raised £1.8 million through a placing of 88,250,000 common shares at 2 British pence apiece.

SPECIALTY

* De Beers SA placed its Voorspoed opencast diamond mine in South Africa up for sale. "After evaluating a range of options, the decision to place Voorspoed mine on the market has been taken to provide the opportunity for responsible lower-cost operators to employ a different operating model that could potentially extend the mine’s operating life beyond 2020," the company said. Standard Bank of South Africa Ltd. is advising De Beers on the sale process.

* Mountain Province Diamonds Inc. intends to offer US$325 million of senior secured second-lien notes due 2022. It will use the proceeds and cash on hand to fully repay and terminate the US$370 million project facility for the Gahcho Kue joint venture in Canada's Northwest Territories.

* Lincoln Minerals Ltd.'s feasibility study for the Kookaburra Gully graphite project in South Australia estimated a pretax net present value, discounted at 10%, of A$81 million over about a 10-year mine life, a 33% internal rate of return, and a payback period of three to four years. Maiden production from Kookaburra Gully is expected in 2019.

* Enirgi Group Corp. decided to terminate a previously announced letter of intent that would have seen it taking an 85% stake in Pele Mountain Resources Inc. in exchange for providing the company the exclusive rights to develop and market Enirgi's lithium processing technology.

* Image Resources NL updated the bankable feasibility study for its high-grade Boonanarring and Atlas mineral sands deposits, part of the North Perth Basin project in Western Australia, with an increase in net present value, discounted at 8%, to A$197 million, from A$135 million, an internal rate of return of 104%, from 64% previously, and a six-month reduction in the payback period, to 16 months.

* Quantum Resources Ltd. and Far Resources Ltd. agreed to work together to assess the synergies between their neighboring lithium projects in Manitoba, covering Quantum's Thompson Bros project and Far's Zoro project.

* Mineral Commodities Ltd. started detailed metallurgical testing and drilling needed for a pre-feasibility study at the Munglinup graphite project in Western Australia, with the study expected in January 2018. A scoping study on the project outlined A$47 million in total development CapEx costs for an open pit mine and processing plant capable of producing an average 56,000 tonnes of graphite concentrate per year over a nine-year mine life.

* Liontown Resources Ltd. sold a number of noncore tenements at its Kathleen Valley lithium project in Western Australia to Ramelius Resources Ltd. and Draig Resources Ltd., following a geological review of the broader project area.

* German automobile manufacturer BMW AG reported talks with suppliers of cobalt and other materials needed for producing batteries, ahead of a pickup in demand due to greater projected numbers of electric vehicles, Bloomberg reported.

* Separately, German industry association BDI warned that local automobile manufacturers may face shortages of materials needed for batteries in electric vehicles, flagging the "risk of running into bottlenecks in raw material supply," the Welt am Sonntag reported, citing Matthias Wachter, head of security and raw materials at the association. Reuters reported that demand for the materials is seen jumping as governments around the globe take measures to control pollution.

* Senator Minerals Inc. agreed to acquire Keefe Lake Projects Inc. in exchange for 6.1 million shares. The target company owns the advanced-stage Keefe Lake uranium project in Saskatchewan's Athabasca Basin.

INDUSTRY NEWS

* The High Court of Pretoria in South Africa postponed the hearing for a challenge by the country's Chamber of Mines to review the government's new mining charter. The hearing start was delayed to Feb. 19, 2018, from Dec. 13, 2017.

* S&P Global Ratings downgraded South Africa's long-term foreign currency debt rating to BB from BB+, with a stable outlook, due to a worsening outlook for the economy and its public finances. The rating agency lowered the country's long-term local currency debt rating to BB+ from BBB-. "In our view, economic decisions in recent years have largely focused on the distribution — rather than the growth of — national income," according to the rating agency. On the same day, Moody's placed the country's ratings on review for downgrade, Bloomberg reported.

* If companies continue to deleverage debt while maintaining CapEx at current levels, including growth CapEx, Sanford C. Bernstein analysts expect an average dividend yield of about 11% in 2020 for companies in its coverage space.

S&P Global Platts, S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

The Daily Dose is updated as of 7 a.m. ET and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.