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Eramet sweetens takeover offer to acquire Mineral Deposits

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Essential Metals & Mining Insights - January 2021

Industry Top Trends 2021: Metals and Mining


Eramet sweetens takeover offer to acquire Mineral Deposits

TOP NEWS

Eramet sweetens takeover offer to acquire TiZir partner Mineral Deposits to A$344.7M

Eramet upped its proposed off-market takeover offer to acquire all the issued shares of Mineral Deposits Ltd. it does not already own to A$1.75 per share in an all-cash transaction that values the target at about A$344.7 million. The company previously offered A$1.46 per share, valuing Mineral Deposits at about A$291 million. Mineral Deposits shareholders said the improved offer is stingy and disappointing, according to The Australian Financial Review.

Australia releases treasure trove of exploration data to spur new discoveries

Australian Minister for Resources and Northern Australia Matt Canavan released data collected from the world's largest airborne electromagnetic survey from an area bigger than France and Germany combined, in what he called a "Christopher Columbus era" in the country's exploration sector. The data, undertaken as part of the Exploring for the Future program, was from the first phase of the airborne electromagnetic survey. A second survey is planned for later this year west across the Northern Territory and into Western Australia to increase the understanding of the region's resource potential.

Glencore settles DRC spat with Gecamines, agrees to US$5.6B debt restructuring

Glencore PLC unit Katanga Mining Ltd. ended a legal dispute with the Democratic Republic of the Congo state miner Gecamines SA covering their Kamoto Copper Co. SARL joint venture. The parties also agreed to resolve the capital deficiency at Kamoto by converting US$5.60 billion of its total debt of about US$9 billion into new shares, effective Jan. 1. Most of the debt is owed to Glencore. Katanga and Gecamines' interests in Kamoto will remain unchanged at 75% and 25%, respectively.

DIVERSIFIED

* Turquoise Hill Resources Ltd. 11.6% shareholder SailingStone Capital, the second-biggest after Rio Tinto, said the subsidiary's board was not doing enough to improve performance and governance issues, The Australian reported. The activist shareholder added that Turquoise Hill's Oyu Tolgoi copper-gold mine in Mongolia was still undervalued.

* Brazilian pension fund Funcef is still considering the possible sale of its stake in Vale SA but is in no hurry to do so, Reuters reported, citing Paulo Werneck, a director at Funcef. According to a separate Reuters report, pension fund Petros CEO Walter Mendes said the fund expects to sell part of its stake in the mining major this year but does not want to rush the process. Pension funds Previ and Funcef, which are controlling shareholders of the Brazilian miner, have been considering selling between 10% and 12.5% of their shareholding this year.

BASE METALS

* India's copper imports are set to increase to 170,000 tonnes in the year through March, from 40,000 tonnes in the year-ago period, following the closure of Vedanta Resources PLC's Tuticorin copper smelter in Tamil Nadu, Bloomberg News reported, citing a report from Care Ratings Ltd.

* Strategic Minerals PLC started the technical assessment of its Leigh Creek copper mine in South Australia and said the proposed work program is expected to lead to the start of copper production around mid-2019.

* Under-administration Weatherly International PLC's acquisition of a further 65% stake in China Africa Resources Namibia Ltd. was approved by the Namibian competition commission. The company now holds a 90% interest in China Africa, which wholly owns the Berg Aukas zinc-lead-vanadium project in Namibia.

* Glacier Lake Resources Inc. is acquiring the Colt Mesa copper-cobalt property in Garfield County, Utah, which covers a past-producing copper mine of the same name with associated cobalt-zinc-nickel-molybdenum mineralization.

* Titan Mining Corp. officially opened its Empire State zinc property in New York and expects to declare commercial production at the mine in the third quarter.

* Southern Copper Corp. now expects to start operations at its Michiquillay copper mine in Peru in 2022, three years earlier than the previous forecast of 2025, Reuters reported, citing CEO Oscar Gonzalez. The Grupo México SAB de CV unit plans to kick off the US$2.5 billion Michiquillay construction in 2019. However, the company will have to reach agreements with communities near the deposit to secure construction permit from the government.

* Generous wage concessions made by copper producers in Chile's private sector in a bid to avert strikes are putting Codelco in a tough spot as it prepares to settle 11 negotiations at its operations in the coming months, Bloomberg News reported, citing Codelco CEO Nelson Pizarro.

* Polish state miner KGHM Polska Miedz SA will implement 46 investment projects in its metallurgical branches up to 2023 to modernize its existing facilities, Puls Biznesu reported.

* OZ Minerals Ltd.'s unconditional takeover offer for Avanco Resources Ltd. received acceptances of 73.9%, with all of Avanco's major shareholders, including Appian Natural Resources, BlackRock Inc., Greenstone Resources and Glencore PLC, accepting the offer.

PRECIOUS METALS

* Ariana Resources PLC kicked off a revised economic study for its Kizilcukur gold-silver project to consider the viability of mining it as a satellite deposit and trucking the ore to the Kiziltepe plant, part of the Red Rabbit project in Turkey.

* AuStar Gold Ltd. purchased the remaining 51% stake in the Rose of Denmark gold mine in Victoria, Australia, from Shandong Tianye Real Estate Development Group Co. Ltd.

* Bluebird Merchant Ventures Ltd. executed a formal 50/50 joint venture agreement with Southern Gold Ltd. for the Kochang gold-silver mine in South Korea and started farm-in activities.

* Tharisa PLC acquired a 26.8% shareholding in Karo Mining Holdings Ltd. for US$4.5 million. Karo holds a 23,903-hectare property that is prospective for platinum group metals in Zimbabwe's Great Dyke area.

* Eurasia Mining PLC's permit application for the Monchetundra platinum group metals project in the Russian Arctic was approved by the Ministry of Defense and the Federal Securities Board. The company expects a final permit to be granted by late summer.

* The Tembagapura Immigration Office in Indonesia's Papua province said it found hundreds of Chinese workers working illegally in local gold mines, The Jakarta Post reported. The activity was reported by local residents who felt cheated for not being able to get work at the mines.

* Kinross Gold Corp. will proceed with the initial Gilmore expansion at its Fort Knox gold mine in Alaska after completing a feasibility study on the brownfields project. Based on a gold price of US$1,200/oz, the analysis defined an after-tax net present value of US$130 million, using a 5% discount rate from July 1, with a 17% internal rate of return.

* Toronto-based Kinross was the world's fourth-largest gold producer in 2017, with attributable production of almost 2.7 million ounces of gold equivalent, which is expected to slide to 2.5 Moz in 2018.

* Sibanye Gold Ltd. blamed the series of recent fatalities at its South African mines on the workers, Bloomberg News reported. "We think a lot of it is behavioral and due to people taking risks and not following safety procedures," said a company spokesperson.

* Dragon Mining Ltd.'s appeal of the rejection of its new environmental permit for the Orivesi gold mine in Finland was dismissed by the Vaasa administrative court.

BULK COMMODITIES

* Adani Enterprises Ltd. is looking for Australian federal approval to increase the size of a dam by 450% and construct a pipeline at its Carmichael coal mine in Queensland without completing an environmental impact statement, The Guardian reported. The Indian miner said in its application to the Environment and Energy Department that previous assessments completed for other parts of the project are sufficient.

* S&P Global Ratings lifted Usinas Siderúrgicas de Minas Gerais SA's global-scale corporate ratings to B from B- and its national-scale ratings to BBB from BB, with the issue level national scale rating on Brazil steelmaker's senior secured debentures to BBB from BB and the recovery rating to 3 from 4. The outlook remains positive. The upgrade reflects the steelmaker's improving financial metrics, which the rating agency expects to be backed by a gradual increase in local demand for flat steel, slightly higher steel prices, higher iron ore output from subsidiary Mineração Usiminas SA, and the company's focus on a higher margin product mix and lean operations to optimize cash generation.

* A court in Brazil's Para state rejected Norsk Hydro ASA's appeal to overturn the partial suspension of bauxite refining operations at the Alunorte smelter, Reuters reported. The state-level decision comes after a federal court also upheld the 50% output cut at the plant. The company said it was evaluating potential next steps in the courts.

* Black Mountain Resources Ltd. said that following completion of its restructuring, it is now mostly debt free and will focus on its Busumbu phosphate project in Uganda and the Crown lithium assets in the Democratic Republic of the Congo.

* Norway filed a request with the World Trade Organization for dispute settlement consultations with the U.S. over import tariffs on steel and aluminum, saying the additional tariffs are against the trade body's rules, Reuters reported.

SPECIALTY

* The first shipment of graphite from Battery Minerals Ltd.'s Montepuez project in Mozambique is likely to be delayed by at least three months from the June 2019 schedule after the company lost a US$30 million funding package. The company's shares crashed on the ASX following the news. Resource Capital Funds terminated the agreement, saying the graphite market no longer meets its investment criteria.

* Global Geoscience Ltd. is raising A$53 million in a fully underwritten institutional placement to accelerate the development of its Rhyolite Ridge lithium-boron project in Nevada.

* Hong Kong-listed Prosper One International Holdings Co. Ltd. entered into a memorandum of understanding for a joint venture agreement to earn a 55% interest in Lithium Chile Inc.'s Pintadas Norte project in Chile. Prosper One is required to spend C$3 million on exploration before Dec. 31, 2021, and make a C$1.0 million equity investment in Lithium Chile at C$1.00 per share.

* Jindalee Resources Ltd. staked 242 placer mineral claims covering about 4,840 acres managed by the U.S. Bureau of Land Management about 16 kilometers from the town of McDermitt on the Nevada-Oregon border.

* Pilbara Minerals Ltd. began commissioning the concentrator at its Pilgangoora lithium-tantalum project in Western Australia.

INDUSTRY NEWS

* Brazilian President Michel Temer issued two decrees overhauling the country's mining laws in a bid to attract investment in the sector and implementing rules about the collection of higher mining royalties, Reuters reported.

* Sweden's government is seeking to improve its permitting system, the country's minister for enterprise and innovation revealed at the Euro Mine Expo in Skellefteå, Sweden. A study is underway to assess options to streamline processes, shorten lead times and limit costs, said Mikael Damberg. In particular, the granting of environmental permits — a key requirement for projects in various industries, including but not limited to mining — is being revisited.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.