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Fortescue Metals to take back control of Solomon power station

TOP NEWS

Fortescue Metals to take back control of Solomon power station

Fortescue Metals Group Ltd. has decided to buy back the 125-MW gas-fired power station that supplies its Solomon Hub operations in Western Australia. The company plans to fully repay the US$348 million cost from available cash in November. Fortescue is also in talks with TransAlta over the performance of the 150-MW South Hedland power station, which supplies electricity to Fortescue's operations at Port Hedland.

Fresnillo H1 profit surges 87.2% YOY to US$310.1M

Fresnillo Plc's profit in the first half of the year surged 87.2% year over year to US$310.1 million, or 41.9 U.S. cents per share. The company announced a dividend of 10.6 cents per share for the six-month period, compared to 8.6 cents per share a year ago. First-half revenues increased 12.3% on a yearly basis to US$995.8 million on the back of higher metals prices and sales volumes.

Barrick, Tanzania kick off discussions to resolve Acacia tax dispute

Barrick Gold Corp. officially initiated talks with Tanzania to resolve an ongoing dispute between the government and the miner's 63.9%-owned Acacia Mining plc, Reuters reported. Tanzania repeatedly accused Acacia of tax evasion and under-declaring revenue by tens of billions of U.S. dollars over several years and recently served a claim of about US$190 billion in unpaid taxes plus interest and penalties to the company, further escalating tensions between the parties.

BASE METALS

* Turquoise Hill Resources Ltd. saw its second-quarter attributable net income slide US$6.0 million year over year to US$23.8 million, or 1 cent per share, on lower copper prices and gold sales. Second-quarter revenue from the Oyu Tolgoi copper-gold mine in Mongolia declined 38.2% to US$203.7 million compared to the same quarter of 2016, largely due to lower concentrate sales and copper prices.

* Repair works at PJSC Norilsk Nickel Co. facilities in Finland and Russia knocked nickel output down by 15% year over year in the first half to 102,905 tonnes from 121,574 tonnes. Nickel production receded quarter over quarter by 8% to 49,418 tonnes in the second quarter, from 53,487 tonnes in the first quarter.

* The number of contract workers at Codelco fell 19.6% to 21,352 individuals between December 2014 and June this year as a result of the company's intensive cost-cutting plan implemented by CEO Nelson Pizarro, daily El Mercurio reported.

* MMG Ltd. said Minera Las Bambas SA shareholders decided to use surplus cash to prepay about US$500 million outstanding under the US$5.99 billion project facility secured to finance the Las Bambas copper project in Peru.

* Capstone Mining Corp. bounced back in the black, posting an attributable net profit of US$12.9 million in the second quarter from a loss of US$13.2 million a year ago. Production of payable copper fell to 23,176 tonnes in the period from 27,200 tonnes last year, but revenue increased to US$115.2 million, from US$100.2 million a year ago, thanks to improved copper prices.

PRECIOUS METALS

* Centerra Gold Inc. is now expecting higher gold production for the full year after boosting output in the second quarter due to higher grades from its Kumtor mine in Kyrgyzstan. The Toronto-based producer lifted its full-year guidance to between 785,000 and 845,000 ounces, from between 715,000 and 795,000 ounces previously.

* Trek Mining Inc.'s feasibility study for its wholly owned Aurizona gold mine in northeastern Brazil pegged a posttax net present value, discounted at 5%, of US$197.1 million and a 34% internal rate of return at a gold price of US$1,250 per ounce. The study estimated life-of-mine gold production of about 886,000 ounces at an average gold recovery of 91%.

* Osisko Gold Royalties Ltd. completed the acquisition of a high-quality precious metals portfolio of assets from Orion Mine Finance Group in exchange for C$675 million cash and 30,906,594 shares. The company also completed a private placement totaling C$275 million.

* Ascot Resources Ltd. entered a definitive agreement with Boliden AB to acquire the Premier gold mine in British Columbia, including all related mineral rights, land, permits, licenses and other assets.

* Gran Colombia Gold Corp. said it is continuing to negotiate in good faith with the Mesa Minera mining collective of Segovia and Remedios toward formalizing activities of illegal mines operating within its mining title, despite certain illegal miners disrupting the company's operations.

* Renaissance Gold Inc. subsidiary Kinetic Gold (US) Inc. granted S2 Resources Ltd. an option to acquire a 70% interest in the company's South Roberts, Pluto and Ecru gold projects in Nevada.

* NSX Silver Inc. entered into a letter of intent with Village View Ltd. Partnership No.1 to acquire property located in New Brunswick, Canada, for C$4.9 million. The company will exit mining and become the owner of a multiunit residential real estate.

* Skeena Resources Ltd. exercised an option to fully acquire the past-producing Snip gold property in British Columbia from Barrick Gold Corp.

* Kin Mining NL secured an option to purchase a used 2.5-MW ball mill from Macca-Interquip for about A$900,000 for its wholly owned Leonora gold project in Western Australia.

* Gold output from China in the first half fell 9.85% year over year to 206.54 tons, China Daily reported.

* Victoria Gold Corp. executed a commitment letter with BNP Paribas for a US$220 million project finance facility for the construction of the Eagle gold mine, part of the Dublin Gulch property in Canada's Yukon Territory.

* Strategic Metals Ltd. agreed to sell six precious metals projects in the Tombstone Gold Belt of central Yukon Territory, Canada, to privately held Territory Metals Corp. The projects, comprising Mount Hinton, Plata, Lance/Lois, News, Naws and Nels, are collectively referred to as the Tombstone projects.

BULK COMMODITIES

* Outokumpu Oyj divested its pipe plant in Wildwood, Florida to Ta Chen Stainless Pipe Ltd. unit Ta Chen International Inc. for about €25 million. The company will now focus on its stainless steel production in the U.S. in Calvert, Ala. and Richburg, S.C.

* Vale SA's press office denied claims made on July 30 by daily O Globo columnist Lauro Jardim, stating that BHP Billiton Group will sell its joint venture stake in Samarco Mineração SA to the Brazilian steelmaker. According to Jardim, the sale would be made official in the next six months, daily Gazeta Online reported.

* Kommersant reported that Evraz Plc, owned by Roman Abramovich and his partners, may return to paying regular dividends for the first time since 2012 on the back of strong operating results, debt reduction and the sale of Evraz NMTP, according to analysts of BCS and Sberbank. The analysts expect that the amount of payments will be US$300 million to US$400 million.

* IRC Ltd.'s K&S iron ore mine in Russia crossed the 1.0 million-tonne mark for production of iron ore concentrate since its initial production. K&S is currently operating at around 60% of its capacity and is on track to increase production to near full-capacity by the end of this year.

* Hainan Mining Co. Ltd.'s board approved a plan to apply for a credit line of 300 million Chinese yuan to fund working capital.

* Glencore locked out about 190 miners at its Queensland-based Oaky North coal operation who had been supporting the industrial action at the site since May for a second week running, The Australian Financial Review reported. The mine is being operated by contractors as the company and the Construction, Forestry, Mining and Energy Union try to resolve the workplace dispute.

* PJSC Acron's net profit fell 61% year over year to 4.08 billion Russian rubles in the first half, while revenue rose 4% to 26.20 billion rubles.

* U.S. Steel Corp. plans to offer US$750 million aggregate principal amount of senior notes due 2025.

* Cliffs Natural Resources Inc. priced an offering of US$575 million of its 5.75% senior guaranteed notes due March 2025. The offering is expected to close Aug. 7.

* China's Shandong Xinfa Group removed a total of 530,500 tonnes per annum of aluminum capacity, Metal Bulletin reported, citing the local Chiping county government. The group had been ordered to close 500,000 tonnes per annum of aluminum capacity by mid-July as part of Shandong's illegal capacity clean-up work.

* Ukraine's Centrenergo signed an agreement with U.S.-based Xcoal Energy & Resources for the shipment of 700,000 tonnes of energy coal by the end of 2017, Vedomosti reported. According to Centrenergo CEO Oleg Kozenko, the first 85,000 tonnes should be delivered to the Odessa port of Yuzhny in early September.

* The Indonesian government is struggling to cap the country's coal production at 400 million tonnes in 2019 as envisaged in its medium-term plan, Bisnis Indonesia reported. In 2016, coal production reached 434 million tonnes, and this year, it is expected to rise to 477 million tonnes.

SPECIALTY

* Karelian Diamond Resources Plc's preliminary economic assessment at its 1.6-hectare Lahtojoki diamondiferous kimberlite pipe in southeastern Finland estimated that 2.11 million carats are recoverable, giving a gross value of US$211 million. The study pegged a net present value, discounted at 8%, of US$39.1 million, a 55% internal rate of return and a nine-year mine life.

* Alba Mineral Resources Plc was granted an exclusive mineral exploration license over a significant proportion of the coastline, prospective for heavy mineral sands, in the Thule black sand province in northwest Greenland.

* The Bolivian government will invest at least US$1.5 billion in strengthening the operations of state miners Colquiri, Huanuni, Vinto and Karachipampa, and in developing lithium deposits in the Uyuni salt flat in the Potosí region, mining minister César Navarro said. It will be the largest amount injected into the sector in the country's mining history, daily La Razón reported.

* Hastings Technology Metals Ltd. signed a memorandum of understanding to sell 2,500 tonnes of mixed rare earth carbonate per year to Baotou Sky Rock Rare Earth New Material Co. Ltd. produced from the former's Yangibana project in Western Australia.

* An independent preliminary economic assessment for the Arrow uranium deposit of NexGen Energy Ltd.'s Rook 1 project in Saskatchewan outlined an after-tax net present value of C$3.49 billion, an internal rate of return of 56.7% and a mine life of 14.4 years. The study pegged preproduction CapEx at C$1.19 billion with cash payback in 1.1 years.

INDUSTRY NEWS

* Philippine environment minister Roy Cimatu said the ban on open pit mining imposed by his predecessor Regina Lopez will remain in place as an interagency mining council reviews mining taxation in the country, Reuters reported. When asked if he would amend or get rid of the ban imposed by Lopez, he answered, "No need to rush. We have to review voluminous documents. I need to look at all the evidence that the companies gave us," according to the newswire.

* South Africa's Chamber of Commerce said deteriorating regulatory and operating conditions, including decreased productivity and inappropriate work stoppages, are threatening up to 100,000 direct jobs and 200,000 indirect jobs in the country's mining industry, Miningmx reported.

* Meanwhile, the National Union of Mineworkers is preparing for a fight against mining companies and the South African government and plans to oppose all future retrenchments, amid increasing job cuts and growing rifts between management and workers at the country's mines, fin24 reported.

The Daily Dose is updated as of 7 a.m. London time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.