TOP NEWS
BHP expects 10% lower costs, US$1.6B in productivity gains in Australia over next 2 years
BHP Billiton Group expects to cut costs at its Australian mining operations by a further 10% and forecasts that the division will deliver US$1.6 billion in productivity gains over the next two years, The Sydney Morning Herald reported, citing Mike Henry, president of BHP Minerals Australia. Henry added that the company would continue to find savings by bringing in expertise from other industries and by better leveraging technology.
South32 OKs 4.3B rand Klipspruit extension, considers South African coal listing
South32 Ltd. approved a 4.3 billion South African rand extension project for the Klipspruit colliery, managed by its 92%-owned subsidiary South Africa Energy Coal, extending the project life by about 20 years. Development activity is slated to start this quarter, with first coal expected from the open cut operation in fiscal 2019. Meanwhile, the company plans to start managing South Africa Energy Coal as a stand-alone business from April 2018 and may ultimately list it on the Johannesburg Stock Exchange.
Court battles at Gecamines could disrupt DRC cobalt output through 2020
Cobalt production is expected to remain suspended at the Lubumbashi operation in the Democratic Republic of the Congo until at least 2020 due to two international court proceedings against state miner Gecamines SA, Bloomberg News reported, citing two anonymous sources.
BASE METALS
* Glencore Plc subsidiary Noranda Income Fund said that unionized employees at its CEZ zinc refinery in Quebec voted in favor of a new collective agreement, effective Dec. 1, 2017, to Nov. 30, 2023, terminating the strike that was initiated in February.
* RNC Minerals expects production from its Beta Hunt nickel mine in Western Australia to double year over year to approximately 4 million pounds of contained nickel in 2018.
* Vedanta Resources Plc's Vedanta Zinc International plans to invest around US$4 million over the next three years to digitalize the greenfield Gamsberg zinc project in South Africa, which will see a "Smart Ore Movement" system built into the company's flagship project, Mining Weekly reported.
* Revelo Resources Corp. entered two deals to off-load its Araya Breccia and Los Azules copper projects in northern Chile to MASGLAS Ltd.
* Mincor Resources NL's partner in the Tottenham copper project in New South Wales, Australia, Bacchus Resources Pty. Ltd., secured an initial 19.88% interest in the joint venture.
* China's refined zinc imports soared 145% year over year to 61,355 tonnes in October, amid supply tightness in the domestic market, but declined 20.5% from the previous month on the closed arbitrage window, Metal Bulletin reported, citing customs data.
PRECIOUS METALS
* Egyptian billionaire Naguib Sawiris is set to launch a new investment vehicle to acquire gold-mining assets across the world, the Financial Times wrote. The new firm will be led by outgoing Acacia Mining plc CFO Andrew Wray, who is expected to join the company in January 2018, according to sources.
* Barrick Gold Corp. agreed to acquire an approximate 15% interest in Reunion Gold Corp. for C$9.1 million.
* New Pacific Metals Corp. closed a nonbrokered private placement of units with Pan American Silver Corp. and Silvercorp Metals Inc. for a combined total of approximately C$27 million. As a result of the financing, Pan American holds 12.1% of New Pacific Metals' outstanding common shares and is entitled to appoint one director to the board, while Silvercorp Metals' interest in the company was reduced to 29.9%.
* Metminco Ltd. announced a new initial reserves estimate for its Miraflores gold project in Colombia, outlining 457,000 ounces of gold and 385,000 ounces of silver contained within 4.3 million tonnes of ore grading 3.29 g/t of gold and 2.77 g/t of silver. The estimate uses a cutoff grade of 1.53 g/t of gold and a gold price of US$1,200/oz.
* Metallurgical testing at Vista Gold Corp.'s Mount Todd gold project in Australia's Northern Territory indicated the potential for finer grind size, higher gold recoveries and production, with lower processing costs and no material increase in project CapEx by automated sorting and a redesigned, second-stage grinding circuit. Results from the testing will be included in an updated preliminary feasibility study slated for completion in the first quarter of 2018.
* Gold production was generally up in the September quarter, according to Metals and Mining Research at S&P Global Market Intelligence. Across all reporting producers, mined output increased about 300,000 ounces quarter over quarter and more than 500,000 ounces when compared with the year-ago period. However, while many producers reported a significant increase in mined production, it was not universal and excluded the two largest gold producers, Newmont Mining and Barrick Gold.
* KEFI Minerals Plc expects the bonds for the US$140 million infrastructure finance lease facility for the development of the Tulu Kapi gold project in Ethiopia to be placed in the first quarter of 2018, with drawdown expected soon after. Project construction is expected to take place over 2018 to 2019, with production commissioning at the end of 2019.
BULK COMMODITIES
* Peabody Energy Corp. completed the sale of the majority of four mining tenements and related infrastructure at the Burton mine in Queensland, Australia, to New Hope Corp. Ltd.'s 90%-owned Lenton joint venture for roughly US$11 million.
* Chinese explosives maker Anhui Leimingkehua Co Ltd plans to acquire state-run coal miner Huaikuang Co. Ltd for 20.3 billion Chinese yuan, or around US$3.08 billion, in a cash and share deal as part of the government's push to boost efficiency at state-owned enterprises, Reuters reported.
* A committee on domestically manufactured iron and steel products for government projects said Indian players are capable of meeting the needs of the country's railways and local rail market, and the recently floated global tender by Indian Railways for 717,000 tonnes of rails goes against India's policy to prefer local steel in state projects, according to a document seen by Reuters.
* Verde AgriTech PLC said a prefeasibility study for the phased expansion at its Cerrado Verde potash project in Brazil estimated an after-tax net present value of US$1.98 billion, using an 8% discount rate, an internal rate of return of 290% and a mine life of 36 years.
* As Chinese pollution control measures prompt steel mills to cut production, Fortescue Metals Group Ltd. is being forced to sell its iron ore product with 58.3% content at a higher discount of 29% for December deliveries, compared to 25.5% in November and 8.5% in January, The Australian Financial Review reported, citing traders. However, the discount on the company's lowest-grade 56.7% ore was unchanged at 40% but increased from 16% at the start of the year.
* Meanwhile, Fortescue confirmed it is selling up to 40% of its volumes on delayed contract settlement, which leaves the iron ore producer accepting market risk for up to three months, The Australian Financial Review wrote.
* Czech-owned miner Silesia plans to invest 200 million Polish zloty in the coming years, increasing coal production by 10% to 15%, Puls Biznesu reported, citing Michal Herzman, president of the company.
* Universal Coal Plc wholly acquired the Eloff project in South Africa. The project is adjacent to the company's Kangala colliery.
* Ironveld Plc now has enough working capital to meet its requirements until Dec. 31, 2018, after it raised £1.8 million through a placing of 88,250,000 common shares at 2 British pence apiece.
SPECIALTY
* Anglo American Plc unit De Beers SA is seeking expressions of interest from potential buyers for its Voorspoed open pit diamond mine in South Africa. Standard Bank of South Africa Ltd. is advising De Beers on the sale process.
* Petra Diamonds Ltd. does not regard a possible breach of its banking covenants as a big risk to its business, as the miner expects its finances to improve following the end of a labor dispute in South Africa and the lifting of an export ban in Tanzania, Reuters reported, citing CEO Johan Dippenaar.
* A feasibility study for Lincoln Minerals Ltd.'s Kookaburra Gully graphite project in South Australia estimated a net present value of A$81 million, using a 10% discount rate, and a 33% internal rate of return, both on a pretax basis.
* Kairos Capital Corp. increased its lithium landholdings in Chile by 150% in terms of land size to 15 properties covering 134,200 hectares, from 12 properties totaling 53,600 hectares.
* Quantum Resources Ltd. signed a memorandum of understanding with Far Resources Ltd. to jointly assess synergies between the companies' neighboring lithium projects in Manitoba. Quantum's 80%-owned Thompson Bros project is located near Far Resources' early stage Zoro project.
* Image Resources NL updated the bankable feasibility study results for its Boonanarring and Atlas mineral sands deposits, part of the North Perth Basin in Western Australia, to include significantly higher mineral sands commodities price forecasts. The pretax net present value, discounted at 8%, increased to A$197 million, from A$135 million estimated in May, and the internal rate of return increased to 104% from 64%.
* Mountain Province Diamonds Inc. intends to offer US$325 million of senior secured second-lien notes due 2022. It will use the proceeds and cash on hand to fully repay and terminate the US$370 million project facility for the Gahcho Kue joint venture in Canada's Northwest Territories.
INDUSTRY NEWS
* The mining industry is showing clear signs of increasing health. This was particularly evident during the September quarter in the exploration sector, as measured by S&P Global Market Intelligence's Pipeline Activity Index, which is a measure of exploration and development activity. After what had been a poor start to 2017, the index has returned to the level of the final quarter of 2016. The improvement is driven mostly by an increase in drilling activity, with the number of distinct projects reporting drill results rising nearly 9% from 456 in the June quarter, itself up 45% from the previous period, to 496 projects.
S&P Global Market Intelligence and S&P Global Platts are both owned by S&P Global Inc.
The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.
