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Indonesia closes US$3.85B Grasberg deal; Anglo restarting Minas Rio


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Indonesia closes US$3.85B Grasberg deal; Anglo restarting Minas Rio


Indonesia closes US$3.85B Grasberg operator deal

Ending prolonged negotiations, PT Indonesia Asahan Aluminium (Persero) closed a US$3.85 billion deal securing a 51.23% stake in Freeport-McMoRan Inc.'s local unit, PT Freeport Indonesia, which operates the giant Grasberg copper-gold mine in the country. Indonesian President Joko Widodo hailed the event as a "historical moment," according to Reuters. An official from the energy ministry said Freeport Indonesia secured a special mining permit that is valid until 2031 and extendable to 2041, Reuters wrote separately. Freeport Indonesia head Tony Wenas said copper ore production from Grasberg is expected to fall in 2019 following the end of open pit mining in 2018, before rising again in 2020.

Anglo resumes Minas Rio operation

Anglo American PLC resumed operations at its Minas Rio iron ore mine in Brazil, which were suspended for repairs to the pipeline that carries the iron ore in slurry form from the mine to the port. The operation is expected to ramp up to 1.2 million wet tonnes per month and produce about 16 million to 19 million wet tonnes of iron ore in 2019 and is expected to report negative underlying EBITDA of US$320 million for 2018.

First Quantum taking the ax to Zambia; 2,500 layoffs planned

Making good on earlier warnings, First Quantum Minerals Ltd. announced plans to slash 2,500 jobs in Zambia in the first quarter of 2019 amid government plans to hike mining taxes, Reuters wrote. 1,250 layoffs are planned at the Kansanshi copper-gold mine; the same number is slated for the Sentinel mine at Kalumbila. Zambian Labor Minister Joyce Simukoko recently said the company notified the government of plans to cut more than 1,000 jobs at Kalumbila and said, "We think these are arm-twisting tactics."


* Teck Resources Ltd. acquired a 13.8% stake in Sun Metals Corp. at 28 Canadian cents per share for a total of C$3.5 million.


* Symbol Mining Ltd. booked its first profit from the Macy zinc mine in Nigeria after executing a sales contract for the first shipment of direct shipping ore from the site. The deal will provide the company with its first cash flow about 12 months from listing on the ASX.

* TNT Mines Ltd. entered into an exclusive four-month binding deal to acquire the Pelley Ridge zinc project in Montana via the purchase of 100% of Metals of Americas LLC.

* Nexa Resources SA was granted the installation license for its Aripuana zinc project in Brazil and will immediately begin construction.

* PolyMet Mining Corp. unit Poly Met Mining Inc. secured the final state approvals to build and operate the NorthMet copper-nickel-precious metals project in Minnesota. The company now awaits the U.S. Army Corps of Engineers' decision on a wetlands permit, the only remaining federal permit yet to be obtained.

* Over 58% of copper producers in Zambia are expected to lose money if the government proceeds with its plan to increase mining taxes in 2019, Reuters reported, citing Zambia Chamber of Mines President Goodwell Mateyo.

* Hillgrove Resources Ltd. temporarily suspended operations at its Kanmantoo copper mine in South Australia after a rockfall in the site's Giant open pit. No one was injured in the incident, and mining has recommenced.


* Fitch Ratings upgraded Russian gold producer PJSC Polyus' long-term debt rating to BB with a stable outlook from BB-, citing its operational performance, lower debt burden and stronger cash generation.

* Osisko Gold Royalties Ltd. extended the maturity on two C$10 million loans with Falco Resources Ltd. until Feb. 28, 2019, as Falco seeks to clinch a C$180 million silver stream transaction with Osisko that is subject to a third-party right of first refusal.

* Rogue Resources Inc. canceled its acquisition of the Golden Arrow gold mine in Ontario as it was not able to secure an adequate toll mill agreement. The company is in cash-preservation mode.

* Aldridge Minerals Inc. closed its plan of arrangement, under which it agreed in mid-September to be acquired by Virtus Mining Ltd. Metallurgium Investment Ltd. and Trafigura Ventures V BV are shareholders of Virtus.

* Thundelarra Ltd. completed the acquisition of the Abbotts gold project in Western Australia from Doray Minerals Ltd., which expands the scope of the former's Garden Gully project.

* Centerra Gold Inc. secured an option to acquire up to a 70% interest in Mammoth Resources Corp.'s Tenoriba gold property in Mexico. Centerra is required to spend US$9 million on the project over seven years.


* Total U.S. coal production in the week ended Dec. 15 rose 0.9% on a yearly basis to 15.5 million tons, government data indicated. For the 52 weeks ended Dec. 15, production was 752.1 million tons, representing a year-over-year decrease of 4.6%, while year-to-date coal output slipped 2.8% year over year to 724.3 million tons, according to U.S. Energy Information Administration data, which is derived from rail carload estimates.

* Twenty Chinese aluminum producers plan to slash annual capacity by 800,000 tonnes in coming months amid low prices, Reuters wrote, citing an official of the China Nonferrous Metals Industry Association. Paul Adkins, managing director of aluminum consultancy AZ China, said the companies making the cuts hoped to generate replacement permits, allowing smelters to replace old facilities with more modern plants, implying the move would be a "net zero reduction," Reuters added. The industry association meeting had representatives from major industry players, including China Hongqiao Group Ltd., Aluminum Corp. of China Ltd., Xinfa Group Co. Ltd., Hangzhou Jinjiang Group and East Hope.

* PJSC Magnitogorsk Iron & Steel Works, or MMK, plans to invest about US$682 million in modernizing its coking and byproduct output and improving efficiency, Interfax reported. MMK contracted out the project to China’s Sinosteel Equipment & Engineering Co. Ltd.; the companies signed a memorandum of understanding in October.

* A rail link connecting mines to the Richards Bay export terminal in South Africa was blocked after 51 railcars of a 200-car coal train derailed, Reuters reported, citing operator Transnet. Transnet's freight rail unit said the closure will impact exports of all commodities transported through the rail line, including coal and chrome. Engineers and maintenance crew will re-rail the cars and start repair work; however, it is unknown at this point when operations are expected to resume.

* BCI Minerals Ltd. completed the sale of the Kumina iron ore project to Mineral Resources and received the first cash payment of A$27 million. Another two payments of A$4 million each are due upon first export of iron ore from Kumina and 12 months after first export.

* China's state-owned Assets Supervision and Administration Commission approved the transfer of Yunnan Province's 51% equity interest in Yunnan Metallurgical Group Co. Ltd. to Aluminum Corp. of China subsidiary China Copper Co. Ltd.

* En+ Group PLC will form a new majority independent board at United Co. Rusal PLC under the terms of an agreement to lift sanctions on companies controlled by Kremlin-associated Oleg Deripaska, according to a statement by the U.S. Department of the Treasury's Office of Foreign Assets Control.

* Citing sources, Bloomberg News reported that Russian oligarch Oleg Deripaska will transfer a small portion of his En+ stake to Volnoe Delo, a charity he founded. Glencore PLC and VTB Bank PJSC are also said to own a significant interest in En+. Meanwhile, En+ shareholders approved the company's planned transfer from Jersey to Russia.

* ArcelorMittal signed a new US$5.5 billion revolving credit facility that will mature in five years.

* Coal India Ltd. unit Northern Coalfields Ltd. plans to invest an additional US$612 million over the next three months to meet its annual production target of 100 million tonnes, Mining Weekly reported.

* Responding to backlash from top insurance companies, Adani Mining Pty. Ltd. said it is "continuing to get on with creating jobs and the economic benefits" associated with the Carmichael coal mine and rail project in Queensland, Australia. Separately, the first heavy earth-breaking equipment reached the site, The Australian reported.

* Adani Mining CEO Lucas Dow called on the Queensland, Australia, government to clarify the process and timeline for securing the remaining environmental approvals that would allow construction to start at Carmichael, Reuters wrote. The Queensland environment department said the company needs two more approvals: one for management plans concerning an endangered bird species and another to identify the source aquifer of groundwater in the area. "We have worked tirelessly over the last 18 months to accommodate the state government's requirements and feedback within the pending management plans only to be told at the eleventh hour that [it] is not ready to endorse these plans," Dow was quoted as saying.

* Yancoal Australia Ltd. raised over HK$13.2 million from the retail component of its 0.05387-for-1 rights offer.

* One miner died and 10 are missing after a methane explosion at New World Resources PLC's CSM hard coal mine in the Czech Republic. The blast injured 10 others and caused damage to some of the underground work areas.

* Incitec Pivot Ltd. may be forced to close its Gibson Island fertilizer plant in Queensland if it fails to find an affordable gas source, The Australian reported.

* CIMIC Group Ltd. companies Sedgman Ltd. and CPB Contractors Pty. Ltd. won a A$184 million contract to design, procure, construct and commission the coal handling and preparation plant at Pembroke Resources Pty. Ltd.'s Olive Downs coking coal project in Queensland, Australia.


* Neometals Ltd. agreed to sell its 13.8% stake in the Mount Marion lithium mine in Western Australia to project partners Ganfeng Lithium Co. Ltd. and Mineral Resources Ltd. for A$103.8 million in cash. Neometals also secured a binding life-of-mine off-take option for 57,000 tonnes per annum of the project's 6% spodumene concentrate production at market-linked prices starting in February 2020. With the deal expected to close at the start of February 2019, Neometals plans to set up a lithium chemical refinery but did not give a timeline. The divestment is intended to support its move to higher-value downstream operations.

* In 2018, 292 companies allocated a total of US$424.5 million to exploring for cobalt, lithium, graphite, manganese and vanadium, up 57% from the US$270 million budgeted by 230 companies in 2017, according to the Metals & Mining Research team at S&P Global Market Intelligence. Many exploration companies launched programs focusing on finding new projects and expanding known deposits of battery minerals, particularly commodities previously not considered core to the exploration sector. Exploration budgets for nickel surged 22% year over year to US$297.8 million.

* Lincoln Minerals Ltd. agreed to acquire four graphite- and base metals-prospective exploration licenses from Centrex Metals Ltd., South Australian Iron Ore Group Pty. Ltd., Wugang Australian Resources Investment Pty. Ltd. and WISCO Resource Group Corp. Ltd. The licenses in South Australia's Eyre Peninsula will increase the company's holding covering all mineral rights to 1,876 square kilometers.

* Laramide Resources Ltd. estimated a maiden inferred resource at its Crownpoint project in New Mexico of 2.5 million tonnes at 0.102% U3O8 equivalent containing 5.1 million pounds of uranium. The company plans to conduct a preliminary economic assessment of the combined Church Rock and Crownpoint deposits.

* Orocobre Ltd. shares slumped Dec. 20 after CEO Richard Seville said lithium prices are unlikely to recover in early 2019 following a sharp price drop in the fourth quarter, Reuters reported.

* Global Atomic Corp. secured a two-year extension for all of its exploration permits in the Tim Mersoi basin in Niger.


* Mexico's undersecretary for mining, Francisco Quiroga, said the new government does not plan to enforce major changes to the mining sector, and only new permits will be required to secure approval from indigenous communities, Reuters reported. Quiroga said the government will not look for anomalies in the about 26,000 concessions already granted. Mexican Senator Angelica Garcia proposed a bill in November that would require mining companies to seek approval from indigenous communities before concessions are granted.

* ASX-listed gold explorer Soon Mining Ltd. said Ghana lifted a 23-month ban on small-scale mining, allowing compliant companies to resume operations with a focus on environmental sustainability.

* South Africa's Department of Mineral Resources published detailed guidelines that mineral rights holders must follow under the country's new mining charter, Business Day reported.

* Newly elected Brazilian President Jair Bolsonaro's choice for environment minister, Ricardo Salles, has been convicted for "administrative impropriety" that occurred during his tenure as head of the San Paolo state environmental regulator in 2016, Reuters wrote. The court ruled Salles was guilty of violations including changing maps in an environmental protection plan to the benefit of mining companies. Salles said he would appeal the ruling.

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