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ThyssenKrupp shareholders mull voting against Tata Steel joint venture

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Essential Metals & Mining Insights - September 2021


ThyssenKrupp shareholders mull voting against Tata Steel joint venture

TOP NEWS

ThyssenKrupp shareholders mull voting against Tata Steel joint venture

ThyssenKrupp AG's major shareholders, including Cevian Capital and Alfried Krupp von Bohlen und Halbach-Stiftung, are skeptical about the German steelmaker's proposed European steel joint venture with Tata Steel Ltd., and have discussed voting against the proposal at a board meeting anticipated as early as next week, Bloomberg News reported, citing people familiar with the matter. The shareholders are mounting pressure on ThyssenKrupp to improve the terms of the deal with Tata.

South32 to acquire remaining 83% in Arizona Mining for US$1.3B

South32 Ltd. agreed to acquire the remaining 83% interest in Arizona Mining Inc. for US$1.3 billion in cash. The offer price of C$6.20 per share of Arizona Mining represents a 50% premium to the closing price on June 15 and implies a total equity value of US$1.6 billion for the company.

Glencore to pay royalties to Dan Gertler companies to avoid asset seizure in DRC

To settle its dispute with Dan Gertler-affiliated Ventora Development Sasu and Africa Horizons Investment Ltd., Glencore PLC said its subsidiaries Mutanda Mining SARL and Kamoto Copper Co. SARL will pay the relevant royalties as they become due in non-U.S. dollars and without involving U.S. persons. The mining giant said this was the only viable option to avoid the material risk of seizure of its assets under court orders in the Democratic Republic of the Congo.

DIVERSIFIED

* Glencore was deemed the outstanding stock by J.P. Morgan Cazenove in a valuation analysis of the Europe, Middle East and Africa metals and mining sector, ahead of Rio Tinto and Anglo American PLC. Rio Tinto is tagged with a neutral rating by J.P. Morgan Cazenove, while Glencore and Anglo American have an overweight recommendation.

BASE METALS

* Gecamines SA said the recent settlement with Glencore to end the legal dispute over Kamoto Copper Co. SARL is estimated to contribute about US$3.5 billion in revenues to the Democratic Republic of the Congo government over the next decade, Bloomberg News reported.

* A minor leak was detected in the sulfuric acid storage plant at Vedanta Resources PLC's Tuticorin copper smelter in India's Tamil Nadu state, Reuters reported. The smelter was permanently shut down by the state government following deadly protests that killed 13 people. The leak was not believed to be problematic, but the authorities decided to evacuate the storage as a safety precaution, said Sandeep Nanduri, the administrative official of the district where the plant is located.

* Highland Copper Co. Inc. outlined results of a feasibility study on its Copperwood copper project in Michigan, estimating an after-tax internal rate of return at 18% and a net present value, discounted at 8%, at US$116.8 million.

PRECIOUS METALS

* Tanzania is planning a tax legislation amendment to grant amnesty on interest and penalties for the next six months in a move that may have a significant impact on gold miner Acacia Mining PLC, which owes the government about US$190 billion in unpaid taxes along with interest and penalties, Reuters reported. Acacia's share price was up more than 5% as of June 15 closing on the London Stock Exchange.

* South African Mineral Resources Minister Gwede Mantashe said that 20 out of 45 mining deaths since the start of this year have been reported at Sibanye Gold Ltd.'s mining operations, adding that the Mine Health and Safety Inspectorate is probing and preparing a report on the miner, with the idea of taking appropriate action, Mining.com reported.

* Truck drivers lifted the blockade on the access road to Goldcorp Inc.'s Penasquito gold mine in Mexico after agreeing to negotiate on their demands with the Canadian miner, Reuters reported. Meanwhile, a company official said the nearly two-week protests did not affect work at Penasquito.

* Four people were killed and five others were injured in a landslide at an artisanal gold mine in Honduras, Reuters reported, citing the fire department.

* Russia-focused gold miner Petropavlovsk PLC denounced the requisition of shareholding companies CABS Platform Ltd. and 9.11%-shareholder Slevin Ltd. to overhaul the company's board at the next annual general meeting, signaling a lack of transparency. The company said it had requested information from the companies to ascertain the identity of the ultimate owners, but neither company provided sufficient clarity on the issue. "There is no evidence of any experience or background in the gold mining industry to support the requisitioners' views and no indication of the source of funds which will have exceeded £20 million to acquire the 9.1% shareholding," the gold miner said in a statement.

* Gold Fields Ltd. extended the life of its St Ives gold mine to 2023 after getting the go-ahead for an over A$100 million development to tap the mine's Invincible South underground ore body, The West Australian reported.

* Orosur Mining Inc. unit Loryser SA applied to begin reorganization proceedings, citing operational challenges at the San Gregorio gold mine in Uruguay since late 2017.

BULK COMMODITIES

* BHP Billiton Group awarded a A$260 million mining infrastructure works contract for the South Flank iron ore project to CIMIC Group, after approving a US$2.9 billion development of the Western Australian project, Mining Weekly reported.

* Unfazed by its competitors' recent moves on Atlas Iron Ltd., BHP said the lift in average iron ore grade to 62% when its South Flank project starts production in 2021 will provide a huge boost for the miner, particularly given its "leaner" operations than Yandi, which its production will replace.

* Tyler Mitchelson, head of Anglo American's metallurgical coal business, plans to aggressively expand the miner's Australian operations, The Australian reported.

* An Australian railroad issue watched closely by international metallurgical coal buyers and sellers could soon be resolved, taking the air out of recent high prices, an analyst said. A dispute over regulated returns between Australian regulators and Aurizon Holdings Ltd. that threatened to curtail at least 20 million tonnes of coal from the export market per year may be close to a resolution, Seaport Global Securities analyst Mark Levin wrote. Supply uncertainty around the dispute was one of several major factors causing metallurgical coal prices to rise to over US$200/tonne on the spot market, Levin said.

* Australian coal miner Bounty Mining Ltd. was admitted on the ASX after raising A$18 million in an IPO. The company's shares will start trading on the exchange under the ticker MNG, effective June 19.

* The Queensland government in Australia will fund A$180,000 over the next three years for a collaborative research project between Rio Tinto and a researcher from the University of Queensland to develop an innovative mining process that could unlock massive, untapped, bauxite deposits in the state within the next five years, Mining Weekly reported.

* North Atlantic Mining Associates Ltd. unit African Minerals Ventures Ltd. secured a 51% earn-in right for the Busumbu phosphate project in Uganda from Black Mountain Resources Ltd. and Namekara Mining Co.

* The construction of stadiums in Russia for the 2018 FIFA World Cup required 200,000 tonnes of steel, of which around 25% was supplied by PJSC Novolipetsk Steel, Vedomosti reported.

* Italy's special long steelmaker Ori Martin purchased a majority stake in compatriot steelmaker Ferrosider, Metal Bulletin reported.

* Altech Chemicals Ltd. secured a US$60 million stream finance facility for its Johor Bahru high-purity alumina project in Malaysia, taking the total project finance to US$340 million.

* China's National Energy Administration approved a 3.25 billion Chinese yuan coal project, with an annual capacity of 2.4 million tonnes, in the country's southwestern Guizhou province, ifeng.com reported.

SPECIALTY

* Chilean antitrust regulator FNE will launch a probe into the market impact of Tianqi Lithium Corp.'s purchase of a 24% stake in Sociedad Quimica y Minera de Chile SA for US$4.1 billion, Reuters reported. "In our investigation, the FNE will seek to verify, or dismiss, whether anti-competitive risks in Chile ... are plausible, and of a magnitude that makes them relevant," the FNE said in a statement.

* Hawkstone Mining Ltd.'s shares dropped more than 22% on the ASX June 15 after it announced that the acquisition of USA Lithium Ltd. was terminated with the mutual consent of the parties.

* Atlas Iron Ltd. made the first shipment of direct shipping ore sourced from Pilbara Minerals Ltd.'s Pilgangoora lithium project in Western Australia to Sinosteel Australia Pty. Ltd.

* Lucapa Diamond Co. Ltd. fetched US$2.0 million from the sale of 1,782 carats of diamonds from its Lulo project in Angola, representing an average price per carat of US$1,150.

INDUSTRY NEWS

* The U.S. Treasury Department hit 14 companies with fresh sanctions due to ties to controversial mining-entrepreneur Dan Gertler and business in the Democratic Republic of the Congo. "Gertler has used his close friendship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state," the department said.

* U.S. President Donald Trump announced tariffs on US$50 billion worth of goods from China and said he would impose additional levies in the event of retaliation, which was immediately promised by Beijing. China's Commerce Ministry responded by saying it would 'immediately introduce taxation measures of the same scale and the same strength," DPA reported. The Chinese government announced 25% tariffs on 545 U.S. products, set to go into effect July 6.

* The Minerals Council South Africa said it does not support some elements in the latest draft of the mining industry charter, including a stipulation that 1% of core profit is paid to communities and employees. The latest draft by the South African government also outlines plans to lift black ownership at permit-holding mining companies to 30% from 26% within five years. However, the industry lobby group said the raised target was never agreed as a recommendation between the parties.

* Deloitte partner Steve Walsh and former Fortescue Metals Group Ltd. CEO Neville Power backed automation as beneficial for jobs and productivity, amid existing fears that have been exacerbated by recent revelations that competitor Rio Tinto cut hundreds of jobs as it seeks to automate mines and railways. Walsh told S&P Global Market Intelligence that things may not be as black and white as they seem when companies are planning future operations regarding jobs being lost, deployed or replaced by automation.

* The Queensland Resources Council said the resources sector's contribution to the state budget is expected to rise to more than A$20 billion by July 2023, Mining Weekly reported. In the 2018 fiscal year, total mineral royalties reached A$4.32 billion.

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