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Glencore, Apollo among shortlisted bidders for A$2B Rio Tinto coal assets

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Essential Metals & Mining Insights - September 2021


Glencore, Apollo among shortlisted bidders for A$2B Rio Tinto coal assets

TOP NEWS

Glencore, Apollo among shortlisted bidders for A$2B Rio Tinto coal assets

The sale process for Rio Tinto's last remaining coal mines, including the Valeria and Winchester South coal mines in Queensland, Australia, is set to enter its second round, with Glencore Plc and a group led by Apollo Global Management LLC set to be included in the shortlisted bidders, Bloomberg News reported, citing sources. The asset package is estimated to be worth over A$2 billion and the sources also confirmed that Whitehaven Coal Ltd. and South32 Ltd. made indicative offers for Rio Tinto's Hail Creek and Kestrel coal mines in Queensland by the deadline this month.

South African miners expect to settle silicosis lawsuit in early 2018

A working group comprising six miners operating in South Africa in early 2018 expects to settle a massive class action brought by mine workers suffering from silicosis and occupational tuberculosis, having earmarked a total of 5 billion South African rand for the settlement, Business Day reported. The group comprises African Rainbow Minerals Ltd., Anglo American Plc, AngloGold Ashanti Ltd., Gold Fields Ltd., Sibanye Gold Ltd. and Harmony Gold Mining Co. Ltd. and is headed by former Harmony Gold CEO Graham Briggs, who said talks with the class-action attorneys are "well advanced."

BlueScope Steel raises H1'18 underlying earnings outlook

BlueScope Steel Ltd. expects its underlying earnings for the six months ended Dec. 31 to be around A$460 million, compared to previous guidance of A$420 million, driven by higher steel prices and domestic volumes, higher contribution from export coke and the recognition of previously impaired taxes at its Indian joint venture.

DIVERSIFIED

* Another round of negotiations between Chad and Glencore to restructure an over US$1 billion oil-backed loan ended this week without any agreement, Reuters reported, citing a source. Glencore lent the West African country's state oil firm SHT about US$1.45 billion in 2014 to be repaid with crude oil, which was subsequently syndicated with several banks. The loan was restructured in 2015 after global oil prices collapsed, but Chad is struggling to repay the debt.

* Panthera Resources, which holds a gold project in India, and Erris Resources Ltd., which holds gold and zinc assets in Sweden and Ireland, respectively, will list their shares on London's AIM on Dec. 21, bringing the number of mining listings this year to 11, Reuters reported.

BASE METALS

* KAZ Minerals PLC approved a proposed US$1.2 billion expansion to its processing facilities at the Aktogay copper mine in Kazakhstan. The expansion, which involves the construction of a second concentrator, will double the current sulfide ore processing capacity from 25 million tonnes per annum to 50 million tonnes per annum.

* OZ Minerals Ltd. entered into an earn-in agreement with Red Metal Ltd. to acquire up to a 70% interest in the latter's Punt Hill copper project, near the former's Carrapateena copper-gold-silver project in South Australia.

* An auction for the US$2 billion Michiquillay copper mine project in Peru, which was scheduled for Dec. 20, will now take place Feb. 20, 2018, Reuters reported, citing state investment agency ProInversion. The auction was pushed back due to the political turmoil in the country.

* Antofagasta Plc struck an early wage deal with its three workers' unions at the Centinela copper mine in Chile, leaving the Los Pelambres copper mine to enter an agreement in 2018, Metal Bulletin reported. The new Centinela contract includes payment of an end-of-negotiations bonus to the workers, as well as a pay increase and other benefits. Meanwhile, Reuters, citing a company statement, reported that the three-year contract indicated a 2% raise in wages and a 14 million Chilean peso bonus per worker.

PRECIOUS METALS

* Wells Fargo & Co. is seeking the Office of the Comptroller of the Currency's permission to buy platinum and then lease it to clients, Reuters reported, citing people familiar with the matter. Earlier this year, the regulator introduced a rule limiting banks' exposure to commodity markets.

* Trek Mining Inc. unit Aurizona Goldfields Corp. entered into a definitive agreement with Sprott Private Resource Lending LP for an US$85 million secured project credit facility that will be used for the development, construction and working capital requirements of the company's Aurizona gold mine in Brazil.

* Kopy Goldfields AB's scoping study at its Krasny gold project in Russia estimated production of 1.1 million ounces during a 17-year life of mine in an open pit gold production scenario. Initial capital cost is estimated at US$182 million, and life of mine production costs are estimated at US$601 per ounce.

* Sandstorm Gold Ltd. amended its revolving credit agreement, upsizing it from US$110 million to US$150 million, enabling the company to use the funds for general corporate purposes, including to pay dividends.

* Blackham Resources Ltd.'s proposed A$60 million funding package with Pacific Road Capital will not proceed as agreed, casting doubt on the gold miner's ability to repay a A$14.8 million debt due by the end of the year, The West Australian reported.

* Stratex International Plc is seeking joint venture financing for the Dalafin gold project in Senegal to advance exploration work, as the company is not prepared to commit further funding after the completion of a review on the property.

* Great Panther Silver Ltd. updated resources for its past-producing polymetallic Coricancha property in Peru, after acquiring the project in early July. Coricancha hosts measured and indicated resources totaling 752,759 tonnes grading 5.8 g/t of gold, 200 g/t of silver, 2.06% lead, 3.26% zinc and 0.53% copper, with inferred resources estimated at 943,160 tonnes grading 5.0 g/t of gold, 209 g/t of silver, 1.45% lead, 3.25% zinc and 0.64% copper.

* Red 5 Ltd. expects total production of 85,000 ounces to 95,000 ounces in 2018 from the Darlot gold mine and the King of the Hills gold project. The company provided the forecast after estimating a a maiden JORC 2012-compliant mineral resource of 895,000 ounces at Darlot.

* Canarc Resource Corp. said it will retain its 33.33% carried interest in the claims adjacent to the past-producing Eskay Creek gold property in British Columbia, through a recently announced deal between Barrick Gold Corp. and Skeena Resources Ltd. under which Skeena can acquire Barrick's Eskay Creek property. Barrick's 66.67% interest in the adjacent claims will shift to Skeena on meeting certain obligations under the agreement.

* Pitchblack Resources Ltd. closed the previously announced acquisition of the Troilus gold project via a reverse takeover of Sulliden Mining Capital Inc. In connection with the transaction, Pitchblack has changed its name to Troilus Gold Corp.

BULK COMMODITIES

* Noble Group Ltd. secured a third extension for the repayment of an unsecured revolving credit facility to May 18, 2018, Reuters reported, citing a company statement. The company, which has bank debt of about US$1.2 billion and bonds aggregating about US$2.3 billion, did not specify the size of the credit being extended, but gained additional time to negotiate a debt restructuring.

* ArcelorMittal's Kazakh unit, ArcelorMittal Temirtau, is set to miss its 2017 steel production target of 4.2 million tonnes after losing output due to a strike staged by workers earlier this month, Reuters reported, citing the unit. The Kazakh company did not disclose figures for the production loss or its expected output for the year.

* An ArcelorMittal subsidiary agreed to pay US$1.5 million to settle a lawsuit that alleged that the company's western Pennsylvania coke plant showered the area with soot and other pollutants, The Associated Press reported, citing a proposed agreement filed in Pittsburgh's federal court.

* ThyssenKrupp AG investors have grown impatient of the company's restructuring efforts and is calling on CEO Heinrich Hiesinger to enact measures to improve its subpar business units that will result in gains for the group's share prices, Reuters reported.

* The Western Australian government decided not to allow Mineral Resources Ltd. to mine at the Jackson 5 and Bungalbin East iron ore deposits at its Yilgarn mine. Meanwhile, the directors of oil and gas producer AWE Ltd. unanimously recommended shareholders to vote in favor of the takeover offer from Mineral Resources.

* The stalled Gina Rinehart-backed Alpha coal mine project in the Galilee Basin could be progressing, after a GVK Hancock lobbyist met with key opposition politicians during the Queensland election campaign, fueling speculations about an impending fire sale, ABC reported.

* AustSino Resources Group Ltd. intends to raise up to A$4.5 million through a public offering of up to 450 million shares at 1 Australian cent per share to re-enable its shares to start trading on the ASX. The offer is scheduled to close Jan. 17, 2018.

* JSW Steel Ltd. is set to commission a 4.50 million-tonne-per annum slab production facility at Dolvi in India's Maharashtra state in mid-2019, Metal Bulletin reported.

* Mechel PAO signed a memorandum for a long-term coal supply deal with China's Jidong Cement, covering up to 3 million tonnes of steam coal produced from its Elga and Neryungrinsky mines in Russia, making the Chinese company the chief foreign consumer of Elga's steam coal.

* A rockfall incident at the Evraz Plc-operated Yesaulskaya coal mine in the Siberian region of Kemerevo trapped three miners, Reuters reported, citing the local administration. Initially, 102 miners were trapped, of which 99 have been rescued.

* Ukraine's coal mines reduced production 13.6% year over year to about 31.96 million tonnes from January to November, Interfax reported, citing the Ministry of Energy and Coal Industry. Coking coal output declined by 20.1% to 6.2 million tonnes during the period.

* Latin America's crude steel output rose 7% year over year to 5.5 million tonnes in November, Metal Bulletin reported, citing preliminary figures from regional steel association Alacero. Finished steel production also rose by 7% to 4.6 million tonnes in the same period.

* Crude steel output in November increased 3.7% year-over-year, from 131.5 million tonnes to 136.3 million tonnes, but is expected to decrease in the coming months as a result of China's crackdown on heavily polluting steel mills, Reuters reported, citing the World Steel Association.

SPECIALTY

* With Sociedad Quimica y Minera de Chile SA and Chilean development agency Corfo in mediation talks, the Chilean miner is targeting total production of 126,000 tonnes of lithium by 2022, which would place the country as the top producer of the commodity in the world with a 30% global market share, Pulso reported, citing sources.

* Bushveld Minerals Ltd. completed the acquisition of a 55% stake in Bushveld Vametco Ltd. from Yellow Dragon Holdings Ltd. in a cash and share deal, to increase the company's indirect interest in Vametco Holdings from 26.6% to 59.1% and enabling it to fully consolidate Strategic Minerals Corp. NL in its financial statements.

* Tronox Ltd. confirmed that the European Commission initiated a phase-two review of the company's planned acquisition of Cristal's titanium dioxide business. The commission would have up to 90 working days, a period that may be extended or shortened, to make a final decision on whether the proposed transaction would significantly impede effective competition in the European Economic Area.

INDUSTRY NEWS

* Chilean President-elect Sebastián Piñera's mining program for the next four years will include a new legal framework that promotes regulatory and tax stability in order to attract and protect mining investments in the country, El Mercurio de Antofagasta 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.