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Fortescue CEO fears ore blending venture with Vale may fail

TOP NEWS

Fortescue CEO fears ore blending venture with Vale may fail

Fortescue Metals Group Ltd. CEO Nev Power said the company's alliance with Vale SA to create an ore blend for sale in China may fail, The Australian reported. "We're still in discussions with Vale, but I think it is looking less and less likely we are going to be able to do that transaction, which I think is a real shame," Power said.

Sale of US$1.5B SQM stake falls through on failure to attract suitable offers

The sale of an indirect stake in Chile's Sociedad Quimica y Minera de Chile SA fell through after it failed to attract suitable offers, Reuters reported. The stake, valued at about US$1.5 billion, has been up for sale since December 2015, when SQM controller Julio Ponce's company Sociedad de Inversiones Oro Blanco SA announced plans to sell a majority stake in Sociedad de Inversiones Pampa Calichera SA, which owns 23% of SQM.

Liberty House closer to taking over Australian steelmaker Arrium

Liberty House's executive chairman said the group has been short-listed among four bidders and is now in the second round for the takeover of troubled Australian steelmaker Arrium Ltd., Bloomberg News reported. Sanjeev Gupta noted that the group expects to complete the £330 million acquisition of Rio Tinto's aluminum and hydroelectric plants in Scotland on Dec. 16

DIVERSIFIED

* Amid Rio Tinto's ongoing Guinea payments scandal, Jeffery P Weiner Supplemental Trust has filed a class action lawsuit against the company, alleging that the scandal has resulted in losses for owners of its American securities, The Australian Financial Review reported. The lawsuit has named former CEOs Sam Walsh and Tom Albanese, as well as former CFO Guy Elliott and current CFO Chris Lynch, as defendants.

* Fortescue plans to pay a further US$1.0 billion of debt on Dec. 23 for its 2019 senior secured credit facility. The repayment will save Fortescue US$38 million in annual interest payments.

* Glencore Plc increased its maximum tender offer for the previously announced debt buyback to US$1.14 billion of its outstanding notes, up from the previous US$1 billion maximum offer. The miner also priced its debt buyback.

* Freeport-McMoRan Inc. completed the previously announced sale of its Deepwater Gulf of Mexico properties to Anadarko Petroleum Corp. for US$2.0 billion in cash. Freeport also settled a preferred stock obligation with its consolidated subsidiary, Plains Offshore Operations Inc., for US$582 million.

BASE METALS

* A state of emergency was imposed after a violent altercation at the Exploracobres copper mine in Ecuador between police and the indigenous Shuar people claimed the life of one policeman, Mining.com reported. The attack involved about 60 people, who claim that the mine's owner has encroached on their territory.

* Capstone Mining Corp. is mulling the integration of its Santo Domingo copper-iron project in Atacama region with other nearby copper mine projects to increase the viability of its investments and reactivate the project, daily Diario Financiero reported.

* Artemis Resources Ltd. secured a three-month exclusive option from Fox Resources Ltd. to buy the latter's fully permitted AGIP Radio Hill nickel-copper operations, processing plant and associated mining and exploration tenements in Western Australia for a total of A$3.5 million.

* About 80% of tin smelters in southern China's Guangdong province have suspended production for the ongoing environmental protection inspections by the state and local authorities in Guangdong since early last month, Shanghai Metals Market reported.

PRECIOUS METALS

* The gold price is nearing a 10-month low, with spot bullion trading at US$1,122.89 per ounce on Dec. 15 in Singapore, due to an improvement in the U.S. economy and investors' trust in the policies of President-elect Donald Trump, Live Mint wrote.

* The government of Ecuador expects to receive US$1.28 billion in taxes from Lundin Gold Inc.'s Fruta del Norte gold project during the mine's expected lifespan of 13 years, daily El Comercio reported.

* Fresnillo Plc decided to suspend investment in a pyrite plant at its Zacatecas leaching facility until market conditions improve. Detailed engineering works would continue, but construction and an order placed for major equipment were deferred, daily Opportimes reported.

* Minera Alamos Inc. engaged CSA Global Canada Geosciences Ltd. to undertake a preliminary economic assessment of its La Fortuna gold project located in the State of Durango, Mexico.

* POZ Minerals Ltd. entered an option agreement with privately held APP Gem Mining Pty. Ltd. to sell its Bulgera gold project in Western Australia.

* PNX Metals Ltd. completed the first stage of its farm-in agreement with a subsidiary of Kirkland Lake Gold Ltd., earning a 51% interest in 19 exploration licenses and 4 mineral leases in Australia's Northern Territory. The company has also elected to increase its interest to 90% under the second stage of the farm-in.

* Montan Mining Corp. signed a definitive agreement with Chazel Capital Inc. to acquire Cerro Dorado SAC, which holds an option and permits to operate the Rey Salomon gold mine in Peru. The transaction is expected to close in January 2017.

* ABC reported that Kingsgate Consolidated Ltd. will seek compensation from the Thailand government over its decision to shut down the Chatree gold mine, citing company Chairman Ross Smyth-Kirk.

BULK COMMODITIES

* A global investor rights law firm, Rosen Law Firm, filed a class action lawsuit on behalf of purchasers of BHP Billiton Group and Vale SA joint venture Samarco Mineração SA's 10-year notes due 2022, 2023, and 2024, from Oct. 31, 2012, through Nov. 30, 2015, alleging that Samarco failed to disclose the defects at the Fundão tailings dam and ignored warnings about the potential accident.

* Samarco Mineração unveiled a plan for a provisional tailings deposit, with a view to restarting pellet output in Brazil, Metal Bulletin reported. The operator of the Samarco iron ore project looks to use the Alegria Sul Cave in Minas Gerais to deposit up to 17 million cubic meters of tailings for a two-year period.

* Vale concluded the sale of its remaining 13.63% stake in Mineração Paragominas SA to Norsk Hydro ASA in a transaction valued at US$113 million.

* Afarak Group has increased its ferrochrome production capacity by switching one of the furnaces at its Mogale plant from producing silicomanganese to ferrochrome. The Mogale plant currently has two ferrochrome furnaces in operation and one silicomanganese furnace, with the transition made due to favorable market conditions for ferrochrome.

* Coal India Ltd. said its output in November rose by 5.3% year on year to 50 million tonnes. According to Mint, the increasing power requirement as winter sets in helped boost coal demand as well as coal off-take, which rebounded 6.2%, to 48.1 million tonnes in the same month.

* China's Hesteel Co. Ltd. plans to invest US$120 million to upgrade Serbian steel mill Zelezara Smederevo in 2017, Reuters reported. The company purchased the steel mill from the Serbian government earlier this year for €46 million. Hesteel also plans to raise production from the plant to 2.1 million tonnes in three or four years.

* Metinvest BV said its Avdiivka coke plant in Ukraine resumed operations on Dec. 12 after production was halted last week by a military attack, Metal Bulletin reported.

SPECIALTY

* Volt Resources Ltd.'s pre-feasibility study for its Namangale graphite project in southeastern Tanzania confirmed its "strong technical and financial viability" with an estimated pre-tax net present value of US$1.31 billion and an 87% internal rate of return. The study is based on 3.8 million tonnes of ore being processed annually at an average 4.7% total graphitic carbon to produce 170,000 tonnes of graphite per year over a 22-year mine life.

* Skyharbour Resources Ltd. entered an option to secure up to 70% of the Preston uranium project by spending up to C$8 million.

* Titanium junior Melior Resources Inc. warned that its shaky financial situation could force it into bankruptcy after a plan it was depending on for much-needed cash fell through.

* According to a report by BMI Research, on the back of increasing growth in the lithium-ion battery and electric vehicle markets, global lithium output and supply is set to take off over the next few years, Mining Weekly wrote. Australia is projected to remain the top lithium producer over the next four years, with output rising sharply from 188,000 tonnes this year to 851,000 tonnes by 2020, the report added.

INDUSTRY NEWS

* The Bolivian government will start to regularize 8,000 mining licenses in the country in 2017, according to mining minister César Navarro, daily El País Online reported.

* According to SNL Metals & Mining data, the credit default swap price of selected mining companies steadily dropped from Jan. 1 up until Dec. 1, which reflects a perceived improvement in the creditworthiness of the mining companies, as well as a decline in their default risk. Teck Resources Ltd. showed the highest CDS price change at 89% negative on Dec. 1, followed by Anglo American Plc and Barrick Gold Corp. with 77% and 55% drops in their respective five-year contracts on senior debt.

* The Philippine government canceled the environmental permits of three mines, two of which are nickel producers, as the new administration continues to review permits granted by previous governments, Reuters reported, citing Environment and Natural Resources Secretary Regina Lopez.

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.