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In This List

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

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020

Report Outlooks of Lithium and Cobalt

Essential Metals & Mining Insights July 2020


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

TOP NEWS

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.

BHP greenlights US$2.9B South Flank development

BHP Billiton Group's board approved the US$2.9 billion development of its South Flank iron ore project, part of the Area C property in Western Australia. South Flank will fully replace production from the 80 million-tonne-per-year Yandi iron ore mine, which is reaching the end of its economic life. First production from South Flank is targeted in 2021, and the project is expected to produce ore for over 25 years. BHP Minerals Australia Operations President Mike Henry said the lift in average iron ore grade to 62% once South Flank starts production will provide a huge boost for the miner, particularly given its "leaner" operations than Yandi.

Vale, BHP joint venture near settlement with Brazil for Samarco restart

Vale SA and BHP are said to be inching closer to signing a definitive settlement with Brazilian prosecutors, clearing the way for restart preparations for their Samarco Mineração SA joint venture and for debt talks to begin, Bloomberg News reported, citing sources. The companies secured multiple court extensions to negotiate the settlement of a multibillion-dollar claim stemming from the fatal Samarco tailings dam collapse in 2015. The parties are expected to meet the June 25 deadline to negotiate a deal.

DIVERSIFIED

* The Democratic Republic of Congo state miner Gecamines SA said foreign joint venture partners should come to an agreement similar to a deal with Glencore to ensure the earlier payment of dividends, the Financial Times reported. Gecamines Chairman Albert Yuma warned that foreign miners are expected to share their revenue more fairly or face legal action.

* Separately, the settlement deal between Glencore and Gecamines for the resolution of the capital deficiency of Kamoto became unconditional after the fulfillment of a preceding condition.

* Vale launched a cash tender offer to purchase all of its 5.625% notes due 2042, with an outstanding principal amount of US$1.50 billion. The offer is set to expire June 21.

BASE METALS

* Japan's Panasonic Corp. expects to more than triple its cobalt consumption in five years, Reuters reported, citing sources. The battery maker has been looking to secure cobalt supply deals, with industry sources saying it expects to use 10,000 tonnes of the metal in 2019 and 2020, with consumption increasing to 25,000 tonnes per year by the early 2020s.

* Highland Copper Co. Inc.'s feasibility study for its Copperwood project in Michigan estimated a net present value, discounted at 8%, of US$116.8 million, an 18% internal rate of return and a 3.2-year payback period. Annual output from the project is expected at 61.7 million pounds of copper and 100,570 ounces of silver during the 10.7-year mine life.

* Jubilee Metals Group PLC notified BMR Group PLC that discussions with Zambian authorities, in the company's capacity as operator of the proposed Kabwe lead-zinc-vanadium joint venture, are not expected to conclude until later this month. Jubilee will not be able to finalize its initial design, work program and budget for the construction phase of Kabwe until after the talks conclude or decide whether to proceed with plant development.

* Canada-based EMX Royalty Corp.'s 42%-owned IG Copper LLC agreed to sell the Malmyzh copper-gold project in Russia's Far East to Russian Copper Co. for an estimated US$68 million.

* Fortune Minerals Ltd. may defer its planned US$200 million metals processing plant in Saskatchewan and could decide to directly sell concentrates to third parties from the flagship Nico cobalt mine in Canada's Northwest Territories.

PRECIOUS METALS

* Tanzania is looking to grant a six-month, 100% amnesty on interest and penalties starting July 1 in an amendment of the tax bill, Reuters reported. The move may have a significant impact on Acacia Mining PLC. The government claims the gold miner owes the country tax, penalties and interest of US$190 billion for 2000 through 2017.

* 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.

* Ahead of a shareholder meeting scheduled for July 24, Alexandria Minerals Corp. "strongly" recommended shareholders vote against a dissident proposal to shake-up its board of directors, led by its recently fired CEO. "The value of your investment in Alexandria is at risk," Alexandria Minerals said. "An unwarranted proxy fight has been initiated by disgruntled, terminated Chief Executive Officer, Eric Owens, as a retaliation mechanism."

* Stellar AfricaGold Inc. recovered first gold from the gravity mill at its Balandougou operation in Guinea. The company recovered 49 grams of gold, representing a recovery rate of 2.28 g/t of gold.

* German technology group Heraeus Holding GmbH is planning to open a precious metals refinery in China's Jiangsu province in September with a US$100 million investment, Reuters reported. The facility will produce and supply precious metal-based products to industries including auto, glass and fertilizer.

* 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.

* Americas Silver Corp.'s Galena Complex in Idaho will fail to meet its production target for the June quarter after mining was interrupted twice in the past few months.

* 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

* 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.

* 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.

* Vedanta Resources PLC is considering options, including layoffs, for some of the 2,000 workers of its iron ore business in southwest India that was ordered closed by a court, Reuters reported, citing sources. In February, the Supreme Court canceled all iron ore extraction permits in Goa and ordered mining to cease from March 16 on environmental and other concerns. According to sources cited by the newswire, mining in Goa is unlikely to resume within at least the next three years as the state will have to conduct a new survey of its iron ore reserves before auctioning mines and seeking environmental clearances to operate them.

* Members of the EU gave unanimous backing to a plan to enforce import duties on €2.8 billion worth of products from the U.S. as countermeasures against tariffs on steel and aluminum, Reuters reported June 14, citing EU sources. The duties, which will be discussed at the June 20 meeting of the European Commission, include a 25% levy on orange juice, bourbon, jeans, motorcycles and other goods from the U.S.

* Miners including BHP, Rio Tinto, Glencore and Anglo American PLC rejected a compromise plan put forward by Aurizon Holdings Ltd. regarding a dispute with the Queensland, Australia, competition regulator over access charges to its coal railway network. They said it was in the rail company's commercial interests to prolong the dispute as it would receive over A$500 million in additional revenues from interim tariffs, The Australian Financial Review reported.

* Yancoal Australia Ltd. disputed a report by IFR Asia that it was planning a dual primary listing in Hong Kong, which could raise between US$600 million and US$800 million. The company said its board has not made a decision to pursue such a transaction at this time, and there is no certainty such an initiative may proceed.

* Nucor Corp. expects its second-quarter earnings to "increase significantly" over the first quarter on the back of higher prices and profitability. The company guided for earnings of US$2.05 to US$2.10 per diluted share, as compared to US$1.10 per diluted share in the first quarter and US$1.00 per diluted share in the second quarter of 2017.

SPECIALTY

* Albemarle Corp.'s Talison Lithium Ltd. joint venture secured conditional approval from the Environmental Protection Authority to build a lithium hydroxide processing plant at Kemerton near Bunbury, Western Australia, The West Australian reported.

INDUSTRY NEWS

* Sweden's ambition to become one of the world's first fossil fuel-free developed nations represents significant opportunities for the metals and mining sector, according to participants at the Euro Mine Expo in Skellefteå, Sweden, which ended June 14. Companies including Boliden AB, Talga Resources Ltd. and Leading Edge Materials Corp. said the country's aim for a green, sustainable society created opportunities for miners, in particular, those producing metals needed for batteries and environmentally friendly infrastructure.

* Miners have warned policymakers to think ahead on expanding the Port Hedland port infrastructure that will require "significant" investment down the track after Western Australian Mines Minister Bill Johnston called for a federal government partnership ahead of future capacity constraints. "Not one cent of Commonwealth money has ever been used to support that essential piece of economic infrastructure," Johnston told delegates at the AMEC convention in Perth. "Imagine how we could improve the opportunities here in Western Australia if we could gain that additional partnership to support our economic infrastructure development in Western Australia, not just for the benefit of industry or even West Australians, but for the whole country."

* Deloitte partner Steve Walsh and former Fortescue Metals Group Ltd. CEO Neville Power have 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.

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