TOP NEWS
Glencore is facing US$1.14B claim over DRC cobalt mine dispute
Congolese-American businessman Charles Brown is demanding US$1.14 billion from Glencore PLC, claiming that he was coerced to sell his 19% interest in cobalt miner Mutanda Mining Sarl to Glencore in two transactions in 2007 and 2012, Bloomberg News reported. In January, a commercial court in the province of Lualaba in the Democratic Republic of the Congo, where the Mutanda mine is located, sanctioned Brown's request to seize US$843 million of assets from Glencore and Mutanda Mining.
Several hundred jobs at risk as Rio Tinto accelerates automation project
Rio Tinto will cut several hundred jobs in the coming years as it accelerates the long-planned automation of its iron ore mines and railways in Western Australia, The Australian reported, citing an internal company briefing. According to the document, about 600 full-time jobs would be affected as the company increases its driverless truck fleet from 77 to 325 over four years from 2017. A Rio Tinto spokesperson, however, clarified that the briefing numbers were indicative at the time and had changed with the company's knowledge of automation.
DRC to sign new mining code into law without concessions to miners
Democratic Republic of the Congo Prime Minister Bruno Tshibala on June 8 will sign into law regulations to immediately implement a new mining code, a move that could spark a legal battle between the government and major miners operating in the country, Reuters reported. The new code scraps protections for existing projects against changes to the fiscal regime, increases royalties and imposes a windfalls profit tax.
BASE METALS
* Chile's copper export revenues rose 22% year on year in May, hitting the highest level in four years, Reuters reported, citing data from the country's central bank. Meanwhile, the Financial Times wrote that copper prices exceeded US$7,300 per tonne on June 7, reaching a 4.5-year high, amid a weaker U.S. dollar and growing supply concerns arising from the closure of a large smelter in India and the potential of a strike at BHP Billiton Group's Escondida copper mine in Chile.
* The main union at BHP Billiton's Escondida copper mine in Chile presented its demands to the company, which now has until the weekend to deliver its counteroffer, Bloomberg News reported. The parties are scheduled to hold talks next week as the current contract is set to expire July 31.
* Resource Capital Fund VI LP raised its stakes in Los Andes Copper Ltd. to about 9.87% after the miner's recently closed private placement, through which RCF acquired 26.8 million Los Andes units.
* Confirming previous reports, Sandfire Resources NL agreed to acquire Talisman Mining Ltd.'s 30% interest in the Springfield copper-gold joint venture in Western Australia by purchasing Talisman A Pty. Ltd. for A$72.3 million cash.
* BlueBird Battery Metals Inc.'s stock jumped more than 32% in midday trading June 7 after it signed a letter of intent to acquire Australian explorer Oberon Gold Pty. Ltd. from Providence Gold & Minerals Pty. Ltd. and two other sellers for cash and shares. Oberon holds the Sandy Point cobalt property and the polymetallic Reedy Creek property in New South Wales.
* China Nonferrous Metal Industry's Foreign Engineering and Construction Co. Ltd. agreed to invest US$70 million in KAZ Minerals PLC's under-development Koksay project in Kazakhstan. The Chinese company will secure a 19.4% stake in the open pit copper mine with the investment.
* OZ Minerals Ltd. CEO Andrew Cole said he is not worried about the company becoming a takeover target and would instead see any advances from suitors as a compliment, The Australian reported. "It would need to be for the right price, of course, because we've got plans to expand Prominent Hill and Carrapateena — plans that are not yet valued in the marketplace," Cole said.
* Private equity firm Cupric Canyon Capital LLC will start construction of its Khoemacau copper project in Botswana in October, Reuters reported, citing Johannes Tsimako, Khoemacau's manager.
PRECIOUS METALS
* Restoration work at Barrick Gold Corp. and Zijin Mining Group Co. Ltd.'s Porgera gold mine in Papua New Guinea continues to make progress, with power generation at a nearby facility hitting 50% of capacity relative to levels before the earthquake in late February. It will take an estimated six to eight more weeks for the power station to reach full capacity. The mine is in the process of claiming compensation under an insurance plan for such contingencies and has already received an interim payout of US$25 million.
* Petropavlovsk PLC is not satisfied with the list of five beneficiaries of Patia Trading Ltd., provided by CABS Platform Ltd. The board said it does not believe that these individuals are the ultimate owners of CABS, and the disclosure is "yet another veil of secrecy." CABS is behind a proposal to replace all members of the current board at the company's next annual general meeting.
* Patagonia Gold PLC produced 10,662 gold equivalent ounces in the first quarter from its Cap Oeste project in Argentina at an average cash cost of US$693 per ounce. The company said it is reviewing the production guidance for the year.
* Eastern Platinum Ltd. is seeking damages from certain former executives and directors related to payments to Serina Services AG and Ingwenya Inc. totaling US$13.7 million.
* Claiming greater shareholder support in a battle for board control, the former CEO of Alexandria Minerals Corp. called some of his former colleagues "nasty folk" and denied allegations that he acted improperly in raising funds or in managing the company's exploration. "They're ignorant complaints," said Eric Owens, who was fired by Alexandria earlier this year and is now trying to reshape the junior explorer's board of directors.
* Sovereign Mines of Africa PLC, which has been an AIM cash shell since early 2017, announced an agreement to acquire U.K. gastropub chain Turf to Table and complete its exit from mining.
BULK COMMODITIES
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* Mineral Deposits Ltd.'s second-largest investor rejected Eramet's A$288 million takeover offer, Reuters wrote. Allan Gray Australia is the company's second-largest shareholder with a 13.4% stake and said it would consider all bids. Mineral Deposits' board has also asked shareholders to reject the bid.
* According to the Financial Times, United Co. Rusal PLC will have difficulties maintaining its stakes in PJSC Norilsk Nickel Co. as U.S. sanctions threaten Rusal's debt deal with Sberbank, for which it used a 25% Norilsk Nickel stake as collateral. Rusal holds about a 27.8% shareholding in Norilsk Nickel.
* S&P Global Ratings lowered Atlas Iron Ltd.'s long-term issuer credit rating to CCC from B- and placed the ratings on CreditWatch with developing implications, from CreditWatch with positive implications. S&P said Atlas' merger with Mineral Resources Ltd. would be positive for its credit quality, but the recent challenge from new 19.9% shareholder Fortescue Metals Group Ltd. may result in the company going into default within the next 12 months if a transaction fails to materialize. The issue-level rating on the company's term loan B was also lowered to CCC, and the recovery rating was retained at 3.
* Meanwhile, Mineral Resources waived certain clauses under its takeover bid for Atlas Iron until June 22, allowing the latter to explore potential deals with other interested buyers, Reuters wrote.
* ThyssenKrupp AG is considering divesting part of or all of its naval vessels business and is considering exiting its submarine business, Reuters wrote, citing a report from German newspaper Handelsblatt.
* China's aluminum exports increased to 485,000 tonnes in May, the highest in more than three years and the second-highest on record, despite U.S. tariffs, Reuters wrote, citing customs data. Chinese steel products, meanwhile, fell 1.4% year on year in May to 6.88 million tonnes.
* Fueled by strong export and domestic demand for metallurgical coal, Bluestone Coal Corp. is reopening an underground mine in West Virginia in July and hiring 250 employees for all of its metallurgical coal operations in the state, CEO Jay Justice told S&P Global Platts.
* Kazakhstan Potash Corp. Ltd. plans to acquire a 51% interest in the Kikata North and Mifumbi copper-cobalt projects in the Democratic Republic of the Congo.
* Western Resources Corp. unit Milestone Potash Corp., which owns the Milestone potash project in Saskatchewan, entered into an agreement with SNC-Lavalin Inc. to complete the detailed engineering for the project.
* TerraCom Ltd. secured sales for 520,000 tonnes at an average forecast price of US$92 per tonne from its Blair Athol thermal coal mine in central Queensland, Australia. The company said it is looking to lock in another 130,000 tonnes of sales in the coming weeks.
* Uncertainty lingers in the metallurgical coal market as China considers plans to increase U.S. coal imports in order to reduce the significant trade deficits between the two economies, sources said.
* European steel industry association Eurofer said an 8% increase in steel imports this year is a direct result of the import tariffs on the metal imposed by the U.S., which caused trade flows to be deflected to Europe, Reuters reported.
SPECIALTY
* De Beers SA's De Beers Consolidated Mines Ltd. unit selected six black economic empowerment partners for its eight-year transport project at the Venetia diamond mine in South Africa. According to Mining Weekly, the transport initiative is valued at 600 million South African rand to 700 million rand.
* PJSC Alrosa announced upcoming auctions for large diamonds, each weighing more than 10.8 carats, in Hong Kong and Vladivostok, Mining Weekly reported. The auction in Hong Kong will run from June 13 to June 27, while the one in Vladivostok will be held from June 18 to June 29.
* Dissident shareholder group Greyling Investments Inc. dropped its bid to shake up the board of Global Atomic Corp.
* AVZ Minerals Ltd. shares closed more than 20% down on the ASX on June 7 after Chairman Klaus Eckhof sold more than half of his stake in the company, The Australian reported.
* Botswana Diamonds PLC Managing Director James Campbell said the company is interested in acquiring liquidated BCL Mine's stake in the Maibwe Diamonds joint venture project, Reuters reported. BCL is selling its 51% interest in Maibwe Diamonds for an undisclosed amount.
* Battery cell-maker Northvolt AB secured an environmental permit for what will be Europe's largest lithium-ion battery cell factory, Metal Bulletin reported. The initial phase of construction will begin June 8.
INDUSTRY NEWS
* In the latest edition of S&P Global Market Intelligence's World Exploration Trends report, the company forecast a full year exploration budget increase of 15% to 20%. Based on an increase in the number of meters of drilling started or announced in the March quarter, it appears that the industry's exploration activity is moving in line with projections.
* Global oil majors' moves in recent years point to an "agnostic" future of energy production that could conceivably include owning or investing in battery minerals extraction companies, which would be "small CapEx" compared to their usual spend and well within their capabilities, Deloitte's global LNG leader told S&P Global Market Intelligence.
* Sources told Reuters that two more staff members resigned from the metals business of Canada's Bank of Nova Scotia amid a restructuring that aims to halve the bank's ScotiaMocatta unit. According to Reuters, ScotiaMocatta is the largest financial backer of the global precious metals sector.
* South African Minister of Mineral Resources Gwede Mantashe said the country has an eight-year backlog in the issuance of mining rights as the proper processing of applications for mining licenses stalled over the years, Mining Weekly wrote. Addressing the recent mining-related deaths in the country, Mantashe added that the department's Council for Geoscience and other stakeholders were paying special attention to seismicity.
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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. The original S&P Global Ratings documents referred to in this news brief can be found in the sources section.
