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BHP greenlights US$2.9B South Flank development, promises high-grade boost


BHP greenlights US$2.9B South Flank development, promises high-grade boost

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 the 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.

Vedanta mulls possible layoffs of iron ore workers after Goa mining halt

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 state 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.


* 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.

* The Democratic Republic of Congo state miner Gécamines SA said foreign joint venture partners should come to an agreement similar to a deal with Glencore PLC 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.

* Glencore reached a settlement with Ventora Development Sasu, a company linked to Israeli businessman Dan Gertler, over unpaid royalties by Mutanda Mining SARL and Kamoto Copper Co. SARL. Under the deal, both Mutanda and Kamoto will pay the relevant royalties in non-U.S. dollars, without involving U.S. persons, in order to fulfill the terms of their deal, in exchange for the withdrawal of litigation filed by Ventora.


* Nevsun Resources Ltd. plans to extend the life of the Bisha copper-zinc mine in Eritrea through 2022 with an open pit cut-back it had previously ruled out. The move adds about 470 million pounds of zinc and 52 million pounds of copper to production through the end of 2022, with additional capital costs pegged at US$39.7 million.

* The settlement deal between Glencore and Democratic Republic of the Congo state miner Gécamines for the resolution of the capital deficiency of Kamoto Copper Co. SARL became unconditional after the fulfillment of a preceding condition.

* 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.

* Agreements reached by mine workers in the private sector in Chile, including ongoing negotiations at BHP's Escondida copper mine, will serve as the "baseline" for future collective bargaining deals between unions and Codelco, El Mercurio reported, citing Rolando Milla, the Chuquicamata mine's Union No. 3 president. Negotiations between Union No. 3 and Codelco will be conducted from June to March 2019.

* 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.


* 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, 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.

* A diamond drilling program at the Doris North deposit of TMAC Resources Inc.'s Hope Bay gold project in Nunavut, Canada, returned assays of 2,710 g/t of gold over 0.66 meters and 1,255 g/t of gold over 1.5 meters, both capped at 100 g/t of gold.

* Monarques Gold Corp. completed an updated resource estimate for the McKenzie Break gold project in Quebec, outlining two scenarios. The first scenario comprises a combination of open pit and underground resources, while the second scenario covers only underground resources.

* Bonanza Goldfield Corp. finalized the acquisition of Mizpah Mines LLC, which holds an option to acquire the Mizpah Extension gold-silver mine in Nevada.


* 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 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 between US$2.05 and 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.

* Schmolz + Bickenbach AG launched a €150 million bond issue, just a few months after its chairman severed ties to Russian oligarch Viktor Vekselberg to help clear the way for the debt deal, Reuters reported. The Swiss steelmaker plans to use proceeds to repay outstanding debt used to pay for its acquisition of France's Asco Industries SAS, it said in a statement.

* Black Mountain Resources Ltd. and Namekara Mining Co. reached an agreement with North Atlantic Mining Associates Ltd. unit African Minerals Ventures Ltd., where African Minerals Ventures will earn up to a 51% interest in the Busumbu phosphate project in Uganda by spending US$3 million over three years.

* Labor representatives at ThyssenKrupp AG made progress in talks with management over the German group's proposed European steel joint venture with Tata Steel Ltd., Reuters reported, citing Markus Grolms, vice chairman of ThyssenKrupp's supervisory board.

* China's coal output in May hit 297 million tonnes, up 3.5% year over year, as producers picked up the pace to answer rising demand ahead of summer, Reuters reported, citing data from the National Bureau of Statistics.

* Oakland, Calif., officials formally appealed a federal court judgment overturning a ban on transporting or storing coal in the city that has halted the development of a proposed export facility.


* 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.

* Kazakhstan's state-owned National Atomic Co. Kazatomprom JSC signed a contract with Swedish company Vattenfall AB for the supply of natural uranium.


* 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.

* Canada and Argentina signed three memorandums of understanding covering mining policy, energy efficiency and nuclear energy cooperation, Mining Weekly reported.

* Illegal mining and dealing of metals and diamonds in South Africa is valued at about 7 billion South African rand per annum, Mining Weekly wrote, citing a PricewaterhouseCoopers report.

* Mining output in South Africa fell 4.3% on a yearly basis in April. Platinum group metals were the largest negative contributor with a 6.5% decrease, Mining Weekly reported, citing the country's national statistics agency.

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