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

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

TOP NEWS

SQM stake sale 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 firm 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

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

Fortescue signals early repayment of US$1 billion of debt

Fortescue Metals Group Ltd. 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.

DIVERSIFIED

* 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, before closing adjustments.

BASE METALS

* Independence Group NL said it has no plans to split, as the company likes being a diversified miner because it cuts exposure to a single commodity, MiningNews.net reported. "It provides a natural hedge," Managing Director Peter Bradford said.

* Indonesian miner PT Bumi Resources Minerals Tbk will not allocate CapEx for 2017 and will depend on revenue from its trading firm in Japan, Bumi Resources Japan Company Ltd., according to head of investor relations Herwin Hidayat, Kontan reported. The miner is also waiting for licenses for three subsidiaries — PT Citra Palu Minerals, PT Gorontalo Minerals and PT Dairi Prima Mineral — which are expected to start operations in 2019.

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

PRECIOUS METALS

* AngloGold Ashanti Ltd. and Independence Group are forecasting an improved production outlook for their Tropicana gold mine in Western Australia of between 450,000 ounces and 490,000 ounces per annum from the second half of 2017, and over a 75% increase in the net present value of the mine. The mine life could also potentially be extended by three years to 2030.

* Kingsgate Consolidated Ltd. Chairman Ross Smyth-Kirk told Fairfax Media that the Thailand government's decision to close the company's Chatree gold mine sent a "horrendous" message to potential foreign investors in the country, and it would take an "ironclad guarantee" that Kingsgate would be allowed to operate without interruption before the company invests in Thailand again.

* In addition, ABC reported that Kingsgate will seek compensation from the Thailand government over its decision to shut down Chatree, citing Smyth-Kirk.

* Troy Resources Ltd. further revised down its gold production guidance for 2016 to between 63,000 ounces and 65,000 ounces. The company said it expects higher unit costs due to decreased production and an increase in unstable ground conditions around the southern wall of the Smarts pit at its Karouni gold mine in Guyana.

* Production at Hochschild Mining Plc's Pallancata silver-gold mine in Peru has temporarily stopped due to a road blockade by members of a local community demanding the renegotiation of existing agreements for land easements. The company said its production and cost guidance for 2016 will not be affected.

* Petropavlovsk PLC cut its gold production forecast for 2016 to between 415,000 ounces and 430,000 ounces at a preliminary total cash cost of about US$700 per ounce, mainly as a result of disruptions at the Andreevskaya deposit of its Pioneer mine in Russia. The flooding had led the company to forecast production at the lower end of its original guidance of about 460,000 ounces to 500,000 ounces.

* Kin Mining NL released the results of a pre-feasibility study that estimates the Leonora gold project in Western Australia will have a net present value of A$71 million before tax. The project is expected to have an initial mine life of 6.5 years, producing 309,000 ounces of gold during that time.

* Gladiator Resources Ltd. is selling all of its interest in its Uruguayan subsidiaries to Metamila Ltd. for about A$1.6 million.

* Panoramic Resources Ltd.'s gold spinoff, Horizon Gold Ltd., did not hit the boards of the ASX on Dec. 14 as planned.

* Lundin Gold Inc. signed an exploitation agreement for its flagship Fruta del Norte gold property in Ecuador, giving it the right to develop and produce gold from the site for 25 years.

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

BULK COMMODITIES

* BHP Billiton Group and Vale SA joint venture Samarco Mineração SA unveiled a plan for a provisional tailings deposit, with a view to restart 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 S.A. to Norsk Hydro ASA in a transaction valued at US$113 million.

* Coal India Ltd. said 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.

* Brazil's Votorantim Siderurgia SA is considering restarting billet production at its mill in Barra Mansa, Rio de Janeiro in January 2017, on the back of improved market conditions, Metal Bulletin reported.

* Metinvest B.V. 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.

* L&M Coal Holdings Ltd. filed a US$40 million claim against Bathurst Resources Ltd. related to a 2010 sale and purchase agreement. Bathurst said it will defend any legal action brought by L&M Coal.

SPECIALTY

* Orocobre Ltd. plans to increase lithium carbonate equivalent production capacity at its Olaroz lithium facility in Argentina to 35,000 tonnes per annum, from 17,500 tpa currently, as part of a phase-two expansion.

* Bass Metals Ltd. negotiated a reduction in the purchase price of the Graphmada graphite mine in Madagascar from StratMin Global Resources Plc to A$5.4 million, from the previous price of up to A$15.3 million.

* The Western Australian Minister for Environment amended certain conditions in the state's Environmental Protection Authority's recommendation for the expansion of Toro Energy Ltd.'s Wiluna uranium mine in Western Australia.

* 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

* 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.

* According to politicians, Indonesia will need to revise its mining law to ease a ban on mineral ore exports, which requires miners to build smelters to process ore locally and halt mineral exports from January, Reuters reported. The government, however, is unlikely to meet a deadline of Jan. 12 for the change, the report added.

* Nathan Chishimba, president of Zambia's Chamber of Mines, said the country needs a more competitive tax scheme to lure investments into its mining industry, Mining Weekly reported.

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.