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BHP, Vale enter preliminary agreement with prosecutors over Samarco disaster

TOP NEWS

BHP, Vale enter preliminary agreement with federal prosecutors over Samarco disaster

BHP Billiton Group, Vale SA and their Brazilian iron ore joint venture Samarco Mineração SA entered a preliminary agreement with the Federal Prosecutors' Office in Brazil, under which the parties will provide a total security of 2.2 Brazilian reais to support the social and environmental remediation programs necessitated by the tailings dam disaster of November 2015. The parties have agreed to conclude negotiations over the 155 billion reais civil claim settlement by June 30.

Moody's upgrades Fortescue corporate family rating to Ba1

Moody's upgraded Fortescue Metals Group Ltd.'s corporate family rating to Ba1 from Ba2 on the basis of substantial debt reduction, cost improvements and limited near-term capital expenditures. The rating agency also upgraded the senior unsecured and senior secured ratings of Fortescue unit FMG Resources (August 2006) Pty. Ltd. to Ba2 and Baa3, from B1 and Ba1, respectively. The ratings outlook is stable.

South32 on track to meet FY'17 output guidance

Despite a challenging second quarter of fiscal 2017, BHP Billiton Group spinoff South32 Ltd. remains on track to achieve production guidance for the majority of its operations for the full financial year. The second fiscal quarter results showed declines in the production of energy coal, manganese alloy, silver and lead, compared to the same quarter a year earlier.

DIVERSIFIED

* Hawkeye Gold & Diamond Inc. signed a deal to purchase the 123.8-hectare Bonanza property, which encompasses the historical Bonanza Pit, a copper, gold, silver, zinc and magnetite skarn prospect, on British Columbia's Vancouver Island for C$5,000 and 250,000 shares.

BASE METALS

* Rio Tinto and Aluminum Corp. of China terminated the joint venture they established in 2011 to find copper deposits in China, Bloomberg News reported. Based on Rio Tinto's website and filings, the joint venture company had focused on the northern Xinjiang, Inner Mongolia and Heilongjiang provinces and employed about 30 full-time staff. The venture was also supposed to expand its search for deposits to coal and potash.

* Chilean President Michelle Bachelet enacted a law that redirects resources from the country's Copper Reserve Law to capitalize state miner Codelco for US$475 million per year in 2016 and 2017, daily La Tercera reported.

* The director of Mirabela Mineração, Milson Mundim, said the company intends to resume operations this year at its Santa Rita nickel mine in Itagibá, Bahía state, Brazil, which was suspended in June 2016 after the liquidation of the parent company, Mirabela Nickel Ltd., Notícias de Mineração reported.

* An independent peer review of the feasibility study for PanAust Ltd. and Highlands Pacific Ltd.'s Frieda River copper-gold joint venture in Papua New Guinea suggested several alternatives to improve the project economics, including establishing a smaller initial project.

* Celsius Resources Ltd. will purchase Opuwo Cobalt Pty. Ltd., which holds an option to acquire the Opuwo cobalt project in Namibia.

* Union workers at BHP Billiton's Escondida copper mine in Chile reaffirmed that they will not agree to any cut in benefits, Metal Bulletin wrote.

PRECIOUS METALS

* Investors appear to be taking a more cautious approach to Australian gold floats this year, with companies undertaking more realistic capital raisings and witnessing modest trade in their first days on the ASX. MineLife analyst Gavin Wendt told S&P Global Market Intelligence that there was a lot of hype around gold in late 2016, prior to Donald Trump's election as president of the U.S., and investors were getting into gold floats simply because other players in the sector had done well.

* Although base metals prices strengthened in 2016, gold remained the top-explored commodity during the year. Due to the overall decline in exploration budgets, gold's share of the global budget surpassed its 2012 share of 47% and accounted for 48% in 2016.

* Shanta Gold Ltd. expects to produce 80,000 ounces to 85,000 ounces of gold this year at all-in sustaining costs of US$800 to US$850 per ounce. The company achieved record gold production in 2016 of 87,713 ounces, beating the year's guidance of 82,000 ounces to 87,000 ounces.

* Sierra Metals Inc. posted the second highest level of annual and quarterly metal production in the company's history. The company produced 11.4 million silver equivalent ounces and 79.5 million copper equivalent pounds in 2016, both representing 4% year-over-year increases and achieving full-year guidance.

* The US$3.5 billion NuevaUnion gold-copper-molybdenum joint venture between Goldcorp Inc. and Teck Resources Ltd. will undergo an environmental impact review in the second half, a process that is expected to last a year, Goldcorp told investors this week, daily Pulso reported.

* Jaguar Mining Inc. exceeded its 2016 production guidance as full-year output reached 96,536 ounces of gold. For 2017, the company expects to produce 100,000 ounces to 110,000 ounces of gold at all-in sustaining costs of US$900 per ounce to US$1,000 per ounce of gold sold.

* Primero Mining Corp. produced 176,139 gold equivalent ounces in 2016 to meet its revised output guidance for the year. Primero anticipates that 2017 production levels will be in line with 2016 but at reduced unit costs.

* A rockfall at Impala Platinum Holdings Ltd.'s 20 shaft in Rustenburg, South Africa, killed one worker and injured another, Mining Weekly reported, citing Johan Theron, the company's spokesperson.

BULK COMMODITIES

* Rio Tinto plans to cut 45,000 tonnes of aluminum output, worth up to A$110 million, from its Boyne aluminum smelter in Queensland, Australia, and will let up to 30 workers go due to an increase in electricity prices in the state.

* Evraz Plc's crude steel output dropped 5.7% year over year to 13.5 million tonnes in full-year 2016, while iron ore pellet production remained at the same level with just a 0.2% increase year over year to 6.5 million tonnes. Coking coal concentrate production increased 4.9% on a yearly basis to 14.3 million tonnes, and output of vanadium in final products declined 12.4% to 12,861 kilograms of pure vanadium equivalent.

* Kommersant reported that United Co. RUSAL Plc will kick off its road show of eurobonds Jan. 20 in Europe, North America and Asia, in a bid to raise over US$500 million to refinance part of its debt of about US$8 billion.

* Davenport Resources Ltd. will start trading on the ASX on Jan. 20. Davenport has been trying to list since late last year and expected to first hit the boards of the ASX in October 2016.

* Anglo American Plc has shortlisted bidders for the sale of some of its South African coal assets, including New Vaal, Kriel and New Denmark, as the company plans to focus on mining diamonds, platinum and copper, Bloomberg News reported, citing two people familiar with the matter.

* Styx Coal Pty. Ltd., a subsidiary of Clive Palmer's Mineralogy Pty. Ltd., is seeking approval for a coal mining license on Queensland Nickel Inc.'s Mamelon cattle station, after administrators failed to sell the property last year. According to ABC, the move outraged former workers of Queensland Nickel, which still owes A$300 million.

* U.K. financier Edi Truell renewed an offer to take over Tata Steel Ltd.'s British Steel Pension Scheme to allow its members to keep their full benefits, Reuters reported. Tata is in discussions with shareholders to cut pension benefits for the 130,000 members of the scheme via a spinoff into a stand-alone entity.

* The U.S. Commerce Department finalized its finding of dumping of certain imports of carbon and alloy steel cut-to-length plate from China, Reuters reported. A final dumping margin of 68.27% was set for Jiangyin Xingcheng Special Steel Works Co. Ltd., the only respondent in the case, the department stated.

* An updated pre-feasibility study for Potash Ridge Corp.'s Blawn Mountain potash project in Utah estimated average after-tax life-of-mine cash flow of US$128 million per annum for a surface mining operation that will produce 232,000 tons of potassium sulfate per year.

* OJSC Magnitogorsk Iron & Steel Works kicked off shipments of flat steel products to Iran through Kazakhstan's port of Aktau, Metal Bulletin wrote, citing the company's spokesman.

SPECIALTY

* Marenica Energy Ltd. kicked off a revised scoping study at its 75%-owned Marenica uranium project in Namibia, which will take into account the reduction in mine development costs and the company's "U-pgrade" processing technology.

* Freeport-McMoRan Inc. subsidiaries, the United States and the Navajo Nation reached a settlement for the cleanup of 94 abandoned uranium mines in Navajo Nation territory, comprising parts of Utah, New Mexico and Arizona. The settlement is valued at over US$600 million, with the U.S. government to bear about half of the costs.

* Paladin Energy Ltd. generated US$40.1 million in sales during the quarter ended Dec. 31, 2016, a 166% jump from the preceding quarter, as sales volumes reached about 1.5 million pounds of U3O8 at an average selling price of US$26.26 per pound. The company expects its sales to fall to between 700,000 pounds and 800,000 pounds of U3O8 in the March quarter.

* Pilbara Minerals Ltd. awarded RCR Tomlinson Ltd. the engineering, procurement and construction contract for a 2 million-tonne-per-annum lithium-tantalum plant at its Pilgangoora project in Western Australia. The contract contains an incentivized target cost of A$138 million, with a guaranteed maximum price of A$148 million.

INDUSTRY NEWS

* According to a survey by Chilean mining association Sonami and PricewaterhouseCoopers, 20% of mining operators are not satisfied with their job, mining news page Minería Chilena reported, citing daily El Mercurio.

* The Philippine government canceled the environmental permits for four more mining projects, including the environmental compliance certificate for Intex Resources ASA's Mindoro nickel project, as the crackdown on erring mines and companies in the country continues, Reuters reported.

* Rescuers worked to free seven miners trapped for two days in a tunnel covered by a landslide in southern Peru, Reuters reported. The mine's owner was unconfirmed, according to the report.

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