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K+S suspending 2 German potash sites; Glencore plans US$1.1B investment in Zambia; Moody's retains Glencore rating

Industry Top Trends 2021: Metals and Mining

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020


K+S suspending 2 German potash sites; Glencore plans US$1.1B investment in Zambia; Moody's retains Glencore rating

TOP NEWS

K+S AGsaid potash production at its Hattorfand Unterbreizbachsites in Germany will be temporarilysuspended starting April 1 due to the limitations on the operations'wastewater disposal brought by the low level of precipitation over the pastweeks. The move will affect about 650 employees at the Hessen sites of Hattorfand the Hattorf-Wintershall mine and approximately 300 workers at theThuringian sites of Unterbreizbach and Merkers.

Localunit says Glencore plans US$1.1 billion investment in Zambia

Glencore Plc'sMopani Copper Mines unit said the mining giant is planningto invest over US$1.1 billion to sink three shafts in Zambia with newtechnology that will extend mine life by more than 25 years, Reuters wrote.

Moody's retainsGlencore rating

Moody's retained its Baa3 investment grade rating forGlencore, citing the mining giant's robust earnings and cash flows from itstrading operations, strong liquidity position and access to working capitalfunding from the banks, as well as expectations that it will deliver furtherdebt reduction in 2016. The rating agency expects Glencore's trading arm tocontribute about a third of the company's consolidated EBITDA in 2016-2017 andthat Glencore's leverage will improve this year as it accelerated plans toslash net debt by US$7.5 billion to US$8.5 billion.

DIVERSIFIED

* Moody's retained its Baa3 investment grade rating forGlencore Plc, citingthe mining giant's robust earnings and cash flows from its trading operations,strong liquidity position and access to working capital funding from the banks,as well as expectations that it will deliver further debt reduction in 2016.The rating agency expects Glencore's trading arm to contribute about a third ofthe company's consolidated EBITDA in 2016-2017 and that Glencore's leveragewill improve this year as it accelerated plans to slash net debt by US$7.5billion to US$8.5 billion.

* BHP BillitonGroup's BHP BillitonLtd. may be facing anotherlawsuit as Lundin Law PC investigates claims concerning the company'spossible violations of federal securities laws — namely on allegations thatcertain statements issued by BHP Billiton Ltd. were false and misleading, andthat the company failed to disclose material information regarding itsfinancial performance. Specifically, the investigation will focus on a Feb. 23report that Brazilian police are pursuing a court order to arrest certainSamarco Mineração SAexecutives.

BASE METALS

* Glencore's Mopani Copper Mines unit said the mining giantis planningto invest over US$1.1 billion to sink three shafts in Zambia with newtechnology that will extend mine life by more than 25 years, Reuters wrote.

* CST MiningGroup Ltd. expects to post a loss for its fiscal year ending March31, swingingfrom the profit recorded in the preceding financial year. The companyattributed the loss to significantly lower revenues derived from its coppermining business and impairment losses on the same segment, among others. Itwill review options for its copper mining business, including downscalingoperations, outsource some operational activities and suspending productiontemporarily in the next few months.

* Chilean copper commission Cochilco said leading globalcopper suppliers are struggling to determine how changes in China's unreportedstocks of copper will affect global supply and demand balances, The Sydney Morning Herald wrote.Cochilco research director Jorge Cantallopts said, "There is thisexpectation that demand in China will help to power the market ahead in thenext few years as some of the supply starts to be stripped away. But we are notso sure that will be the case. The inventories and collateral issue plays intothis cloudy picture."

* MetallurgicalCorp. of China Ltd.'s net profit attributable to shareholders ofthe company for 2015 rose 21.11%year over year to 4.80 billion Chinese yuan. The company also recognized animpairment charge of US$105 million, equivalent to about 656 million yuan, onits Ramunickel-cobalt project in Papua New Guinea, due to low prices for bothcommodities in the international market. The impairment wiped about 440 millionyuan from the company's 2015 net profit attributable to the parent.

* XinjiangXinxin Mining Industry Co. Ltd. expects a reductionof 100,000 tonnes per year in its copper smelting capacity following itsplanned disposal of its 66% stake in Xinjiang Wuxin Copper Industry Co. Ltd.

PRECIOUS METALS

* NewmontMining Corp. agreed to repurchaseUS$273.6 million worth of its 5.125% senior notes due 2019 and US$226.4 millionworth of its 6.25% senior notes due 2039 under its recently announced debttender offer. The gold miner launched the debt buyback at the end of Februaryfor up to US$500 million worth of its notes.

?* NewmarketGold Inc. said the holders of the some US$34.3 million of itsUS$34.5 million 8% convertible unsecured debentures due April 30, 2018, haveconverted them intocommon shares prior to the redemption date. The company will issue 10,287shares and pay cash for the accrued and unpaid interest up to the redemptiondate for the remaining unconverted debentures. President and CEO DouglasForster said the transaction will see the company becoming "essentiallydebt free with no additional future debenture interest payments."

* OceanaGoldCorp. posted a 49% increase in its measured and indicated resourcesto 11.6 million ounces of gold and an 80% jump in proven and probable reservesto 5.46 million ounces of gold, as at Dec. 31, 2015. The company also said itreceived a five-year extension to the exploration period of its Financial orTechnical Assistance Agreement in the Philippines, paving the way forconducting exploration activities in the broader region surrounding itsDidipio mine inthe country.

* Torex GoldResources Inc. said commercial production has been at its gold mine inMexico ahead of schedule and under budget, having operated for over 30 consecutivedays at an average of 9,470 tonnes per day. The company posted afull-year 2015 net loss of US$24.6 million, narrowing from US$26.3 million ayear ago.

* ComstockMining Inc. partneredwith American Mining and Tunneling LLC and American Drilling Corp. LLC,collectively known as the American Group, for US$5 million on underground minedevelopment, drilling and mining services in connection with its Lucerne andDayton projects.

* The Mines Ministry of Mali said the gold mine will now beclosed in 2019,instead of 2017, after its reserves were found to be larger than initiallyestimated, Reuters reported. Morila, owned by , and thelocal government, was initially projected to close in 2013, but the closingdate was later moved back to 2017.

* China's ZijinMining Group Co. Ltd. reinforced its eagerness to acquire foreignmining assets by allocating8 billion Chinese yuan to 10 billion yuan for overseas M&A deals this year,with President Wang Jianhua saying late last year that the company's next dealcould be "as big as US$5 billion."

* BMO Capital Markets analyst Andrew Kaip expects that theeconomic studies on Kinross GoldCorp.'s Tasiastgold mine in Mauritania, scheduled to be released today, will demonstrate a "constructivestep forward" for the mine, while "balancing the size and timingof future capital commitments," the FinancialPost reported.

* RenaissanceMinerals Ltd. executed a joint venture agreement with , allowingthe latter to earnup to a 51% interest in Renaissance's Cambodian gold projects.

* KootenaySilver Inc. signed an agreement with Coeur Capital Inc. toacquire its 2.5% netsmelter return royalty on future production from 's silver-gold-lead project in Mexico's Chihuahua state.

* Galane GoldLtd. and its GalaxyGold Mining Ltd. unit entered into a full and final withTraxys Europe SA, Mine2Market Sàrl and certain others with respect to variousoutstanding claims arising from the time period when the parties operatedGalaxy's mining operations.

* Wesdome GoldMines Ltd. said it expects to achieve the of its overall productionforecast for 2016. Production in 2016 at the company's operation inOntario was forecast to range between 54,000 ounces and 60,000 ounces of gold.

* SierraMetals Inc. said it expectsto produce 10.4 million to 12.8 million silver equivalent ounces in2016.

* Lago DouradoMinerals Ltd. signed an agreement to a 100% interest in 1,400contiguous claim units known as the East Block in the Sandy Lake district ofnorthwestern Ontario from GPMMetals Inc., for 40 million Lago shares.

* White CliffMinerals Ltd. said the Kyrgyz State Agency for Geology and MineralResources formally approvedthe company's 2016-2020 Aucugold project exploration programs after receiving statutory approvals from therelevant state authorities and the Jalal Abad regional government.

BULK COMMODITIES

* K+S AGsaid potash production at its Hattorfand Unterbreizbachsites in Germany will be temporarilysuspended starting April 1 due to the limitations on the operations'wastewater disposal brought by the low level of precipitation over the pastweeks. The move will affect about 650 employees at the Hessen sites of Hattorfand the Hattorf-Wintershall mine and approximately 300 workers at theThuringian sites of Unterbreizbach and Merkers.

* Accordingto The Associated Press, some workers at Peabody Energy Corp.'s North Antelope Rochelle coal mine in Wyomingwere told not to report for work later this week. A spokeswoman for the companydeclined to comment on the matter but the AP reported that a certain number ofminers were given notices March 29, instructing the workers to skip work andattend a meeting April 1 but the purpose of the meeting was not disclosed.

* In a bid to curb cheap supplies from imports, Indiaextended a safeguard duty on some steel imports up to 2018 though thelevies are only meant to be temporarily imposed to protect the local industryfrom a damaging surge in imports. According to Bloomberg News, the CentralBoard of Excise and Customs said a 20% levy will apply until mid-September thisyear and will drop in stages to 10% for the six months through mid-March 2018.

* Russian metals and mining firms such as andEvraz Plc are turningto local debt after the Russian currency fell and triggered a currencymismatch between companies' borrowings and revenues. According to BloombergNews, Metalloinvest is set to beat the 60 billion Russian rubles that it raisedon the domestic bond market in 2015 and Evraz recently closed the book on a 15billion ruble note, while UnitedCo. RUSAL Plc is also considering its first ruble bond sale in fiveyears.

* While other Chinese coal miners have been unable to paysalaries and the industry continues to grapple with increasing unemployment,China Shenhua Energy Co. Ltd.said it has no plansto lay off staff, even though total coal capacity could fall by as much as 16%this year. According to Vice Chairman Ling Wen, the company will need to cutthe number of employees in its coal division, but "will divert them toother subsidiaries of the company instead of making redundancies."

* Australian Deputy Prime Minister Barnaby Joyce addedto Shenhua Group Corp. Ltd.'swoes relating to its Watermarkcoal mine in New South Wales. Joyce, who also serves as the country's ministerfor agriculture, said he will use "any ally" he can to ensure thatmining will not be allowed on prime agricultural land, such as Watermark'scase, ABC reported.

* According to Reuters, Mechel OAO is set to hold a shareholdervote in absentia on its proposed debt restructuring May 26 after thecompany failed to get a majority shareholder vote on the matter in a previousshareholder meeting, during which the shareholders discussed a two-yearrestructuring process with Sberbank, Gazprombank, VTB and a consortium ofinternational lenders.

* Tata SteelLtd. is investigating the potentialsale of all its U.K. plants as part of a restructuring of thetroubled business. BBC News reported that the Indian steelmaker told itsEuropean parent to "explore all options for restructuring," includinga partial or full sale of the U.K. operations. According to Sky News, the U.K.business employs at least 15,000 workers that could find themselves out of ajob if a full sale goes ahead.

* MongolianMining Corp. is still tryingto secure a forbearance agreement with its lenders and has beenunable to make an interest payment on its US$600 million 8.875% senior notesdue 2017. The coal producer was due to pay accrued semiannual intereststotaling US$26.6 million a day earlier, but it has been unable to make thepayment or secure any waiver or forbearance from the noteholders.

* Yanzhou CoalMining Co. Ltd.'s net income attributable to shareholdersslipped to 164.5million Chinese yuan in 2015, from 766.2 million yuan a year earlier, mainlydue to the continued decline of coal prices and Chinese imports due to anoversupply. As a result of the lower profit, the company halved its dividendpayment to 1 fen per share for 2015, according to the March 29 report.

* AlphaNatural Resources Inc. is asking a judge for permission toreject agreementswith its union labor force to help it survive the "historic collapse ofthe domestic coal industry." In a motion filed with the U.S. BankruptcyCourt for the Eastern District of Virginia, Alpha said it has no choice but toend the agreements in order to keep certain assets operating as going concernsand help avoid the "otherwise piecemeal liquidation of their assets, allfor the benefit of all stakeholders."

* The Bench Marks Foundation accusedMineral Commodities Ltd.Chairman Mark Caruso of inciting violence in the Xolobeni area in South Africa'sWild Coast, an area where an anti-mining activist was killed in a manner "reminiscentof apartheid-style death squads," BusinessDay reported. Caruso denied that the company was linked to the murder.

* UBS analysts said FortescueMetals Group Ltd. has both the means and desire to continueto lower its debt burden, and hit its 40% internal gearing target by theend of 2019, citing the company's increased rate of debt repurchases amid aslump in iron ore prices, The AustralianFinancial Review wrote.

* In light of the November 2015 dam collapse at theSamarco ironore mine, the Brazilian Public Prosecutor's Office advisedthe National Department of Mineral Production to only approve iron ore projectsthat have an appropriate Plan for Economic Exploitation that addresses anenvironmentally sound disposal of mine waste, O Globo reported.

* IronMountain Mining Ltd. secured an option to 50% equity in private company AuCapital Mining Pty. Ltd. from the latter's shareholders. Au Capital agreed topartner with Iron Mountain to explore and potentially develop its two whollyowned prospecting licenses in the Solomon Islands, prospective for bauxite.

* Owing to opposition from villagers, the Expert AppraisalCommittee of India's Forest and Environment Ministry has deferredtaking any decision on the proposal for a 10 million-tonne-per-annum coalwashery project in the country's Odisha state submitted by unit , Mining Weekly reported, citing a seniorgovernment official.

* Separately, TheHindu quoted an industry official as saying that Coal India is poised toclose the fiscal year with a totalcoal output of some 540 million tonnes, compared to the target of 550million tonnes, representing a year-over-year rise of 9%.

* ArcelorMittalunit ArcelorMittal Kryviy Rih openedits own steel warehouse in Lviv, making it the company's sixth storage facilityin Ukraine, Delo.ua reported.

* AfricanPotash Ltd. Chairman Chris Cleverly that the company willreceive a delayed payment against the shipment of 20,000 tonnes of ureafertilizer stock to a Zambian buyer in full.

SPECIALTY

* GoviExUranium Inc. and DenisonMines Corp. executed a definitive share purchase agreement to mergetheir African uranium mineral interests and establish an Africa-focused uraniumdevelopment company. The deal will see GoviEx acquiring Denison's RockgateCapital Corp. unit, which holds all of Denison's uranium interests in Africa,for about 56.1 million GoviEx shares. The transaction is expected to close onor about May 17.

* SayonaMining Ltd. securedtwo lithium-prospective tenements in Western Australia, expanding the company'slithium tenements in the Pilgangoora district to five.

* Elcora Advanced Materials Corp., , ,Metals of Africa Ltd.,Coulometrics LLC and a private industry partner said they are a micronizingand spheronizing mill to produce spherical graphite.

* CaeneusMinerals Ltd. entered into a binding heads of agreement with NevadaMetals Pty. Ltd. to fully acquirethe Muddy Mountain and Lida Valley lithium projects in Nevada.

* Following a review of in-house data, four metallic andindustrial minerals permits covering two separate areas of interest near itsBuffalo Hillsdiamonds joint venture project in Alberta with and

INDUSTRY NEWS

* Barclays Plc said the price of commodities including oiland copper mayfall steeply as investors rush to liquidate due to the absence of any "concertedfundamental improvements," Bloomberg News reported.

* Large insurance companies in Brazil such as AIG andAllianz are choosing to excludetailings dams from coverage as a result of the tailings spill at theSamarco iron ore mine, Notícias deMineração reported, citing insurance broker and risk analysis firm Marsh.

* Fatal accidents in the mining sector in Peru totaledeight victims in the first quarter this year, down 27% compared with the sameperiod in 2015, Rumbo Minero reported, citing the Ministry of Energy and Mines.

The Daily Dose isupdated as of 7 a.m. New York time, and scans news sources published inChinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai andUkrainian. Some external links may require a subscription.