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In This List

Key investors pull out from X2 Resources; Mixed bag Senate makes for unclear future for Australian miners; Fitch downgrades Samarco Mineração

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020

Report Outlooks of Lithium and Cobalt

Essential Metals & Mining Insights July 2020


Key investors pull out from X2 Resources; Mixed bag Senate makes for unclear future for Australian miners; Fitch downgrades Samarco Mineração

TOP NEWS

Mick Davis' X2Resources Ltd. is restructuring after two key investors of the US$5.6 billion privateequity fund, The Australian reported,citing "people familiar with the matter." The sources told thepublication that commodities trading house Noble Group Ltd. has reneged on its US$500 millioncommitment, and U.S. private equity firm TPG will not renew its US$500 millioncommitment when it expires in the first quarter of 2017.

Australian miners are likely to be in for an three years despitethe Liberal-National Coalition having returned to government as the recentSenate outcome gives the Coalition diminished political authority. A majorityof 39 is needed in the Senate to pass legislation, but the Coalition will onlyhave up to 29 seats, which means they will need to rely on the minority partiesto achieve a majority vote. One of the implications is that the Coalition maynot be able to deliver on its election commitments, which include proposedcorporate tax cuts.

Fitch Ratings downgraded Samarco Mineração SA's long-term foreign- andlocal-currency issuer default ratings as well as its senior unsecured debt ratingsto C from CCC, based on the assumption that it will not be able to restartoperations by the second half of 2017. The rating agency believes that Samarcowill be forced to request a standstill or restructure its debt within the nextfew months, as the company seeks to preserve cash for expenses related toobtaining operating permits.

DIVERSIFIED

* Credit Suisse affirmed it rating for and 's stocks at neutraland outperform, respectively. The firm also increased its target price for eachof the companies' shares, to 2,300 pence per RioTinto share from 2,100 pence and to 1,150 pence per BHPBilliton share from 1,050 pence.

BASE METALS

* Data from the International Nickel Study Group showed thatthe global nickel market deficit increasedto 11,200 tonnes in May as production fell to 164,700 tonnes in the month,while global consumption rose to 175,900 tonnes, Reuters wrote.

* The Philippine government issued a suspensionorder on unlisted firm BerongNickel Corp's nickel mine in Palawan because of a spill that affectedcorals, Reuters reported, citing a statement from Department of Environment andNatural Resources Secretary Gina Lopez. This is the third nickel mine to besuspended in less than two weeks.

* Lack of a long-term vision and the ongoing commodities priceslowdown have led Codelco to a financialcrisis, El Mercurio reported. TheChilean state miner has been scarcely capitalized since its nationalization 45years ago and has reinvested only an average of 6% of its surplus in the last25 years. In comparison, the private mining sector has reinvested about 50% ofits profits in the same period.

* Rising electricity costs and outages in South Australiaare becoming a significantconcern for the sustainability of BHP Billiton Group's Olympic Dam copper operations, The Australian Financial Review reported.

PRECIOUS METALS

* South African Mineral Resources Minister Mosebenzi Zwanepaid a visit to Sibanye GoldLtd., concerned about the number of fatalitiesrecorded from the company's operations this year, Independent Online wrote. Sofar this year, fatalities in South Africa's mining industry have reached 49, 10of which happened at Sibanye projects.

* Separately, Reuters reported that Zwane called on platinumproducers and South African trade unions to concludewage talks quickly to avoid protracted disputes.

* Harmony GoldMining Co. Ltd. will hedge about 20% of its output for the next two years atan average price of 682,000 rand per kilogram of gold in a bid to securemargins and reduce debt.

* Each of African Rainbow Minerals Ltd.‚ Anglo American SA‚AngloGold AshantiLtd.‚ Gold FieldsLtd.‚ Harmony Gold and Sibanye Gold filed petitionsto South Africa's Supreme Court of Appeal for leave to appeal against the classaction certification judgment that paved the way for thousands of former andcurrent mineworkers to sue the companies, Fin24 reported.

* Lundin GoldInc.'s Frutadel Norte gold project in Ecuador wouldrequire approximately 2,000 workers for its construction phase, withbetween 700 and 800 new positions open for skilled labor and the remainingnumber to be filled by administrative personnel, news agency Andes reported.

* Zijin MiningGroup Co. Ltd.'s net profit attributable to owners of the parentslumped 60.48% yearover year to 530 million Chinese yuan in the first six months of 2016,according to preliminary figures. The steep fall in the Chinese group's profitwas attributed to the impact of hedging as certain products did not benefitfrom rising commodity prices.

* GreatPanther Silver Ltd. said the processing plant at its silver mine inMexico has resumedfull operations.

BULK COMMODITIES

* SouthGobiResources Ltd. has finalized the terms of a deal to around US$26.9 millionworth of debt owed to China Investment Corp.

* China's plans to tackle excess capacity seems to havecut deeper in itscoal sector than in steel, as recent data from the National Bureau ofStatistics showed record highs in steel output but a 16.6% year-on-year declinein coal production in June.

* The Environmental Protection Authority willrecommend for approval the development of 's iron ore depositin Western Australia to Environment Minister Albert Jacob, The West Australian reported.

* WollongongCoal Ltd. awarded a mining services contract to Delta SBD Ltd. forits Wongawillicoal mine in New South Wales.

* TerraComLtd. reiterated that it has the financial capability tooperate the Blair Athol coal mine in Queensland, refuting claims that it was"financially distressed" and did not possess the experience torehabilitate large-scale open cut coal mines. TerraCom's unit is set toacquire BlairAthol from Rio Tinto.

* BHP Billiton has launched an integratedremote operations center in Brisbane, Queensland that will cover sevenmines under the BHP BillitonMitsubishi Alliance, Australian Mining reported.

* FortescueMetals Group Ltd. is likely to be theonly one of the big three iron ore players to top its production targetwhen June quarterly results are released this week, The Australian Financial Review reported. The company has alreadysurpassed its 165 million-tonne shipping guidance for the fiscal year endedJune 30, with shipments totaling 169.4 million tonnes.

* Sanjeev Gupta's Liberty House is settingits sights on struggling Ontario steel producer and U.S. SteelCanada, after his bid to take over Tata Steel Ltd.'s U.K. business appeared thwarted thismonth, the Financial Times reported,citing a source familiar with the matter.

* Meanwhile, new British Prime Minister Theresa May notedher commitmentto working with the Welsh government and Tata Steel Ltd. regarding thesteelmaker's embattled operations in the U.K., Reuters reported.

* Coal ofAfrica Ltd.'s extended takeover offer for was due to unfulfilledconditions, including the failure to finalize a coal sales contract with SouthAfrican power utility Eskom.

SPECIALTY

* Lynas Corp. Ltd. posted recordquarterly sales of A$55.9 million in the last quarter of its fiscal year asproduction rose by 30% in the three-month period. The company's full-year salesalso increased to A$196.1 million from A$148.6 million in the preceding fiscalyear.

* Underground mining operations at 's diamond mine were temporarilysuspended following a July 15 investigation by the South African Departmentof Minerals Resources into a fall of ground incident, which occurred whenexplosive misfires were being made safe and resulted in the injury of a miner'sassistant.

* TsodiloResources Ltd. has secured a 100% interest in Bosoto (Pty) Ltd. and itsBK16 kimberliteproject in Botswana after acquiring minority shareholders' 25% equity interestin Bosoto for a 2% gross proceeds royalty on diamond sales from BK16.

* MZIResources Ltd.'s off-take customer has to thecontracted sales volumes for its L70 and L88 leucoxene product from theKeysbrookmineral sands project in Western Australia, in the December half.

* ValenceIndustries Ltd., which suspended processing activities at itsUley graphitemine in South Australia in early December 2015 to reduce operating costs, wasplaced in voluntaryadministration with the appointment of Laurie Fitzgerald andMichael Humphris of William Buck as administrators.

* CNNCInternational Ltd. expects to narrow its loss in the first half of the yearcompared to the loss posted in the corresponding 2015 period. In the first halfof 2015, CNNC shared the loss of its associate Société des Mines d'Azelik SA,and had made full provision of about HK$119.9 million for its investment equityof and loan receivables from the latter. As the carrying amount of interest inSomina was nil by 2015-end, the group is no longer required to share anyfurther losses this year if any, until it becomes a positive net asset position.

INDUSTRY NEWS

* According to Mining Weekly, Australian Prime MinisterMalcolm Turnbull removedthe environment minister post, replacing it with an expanded environmentand energy portfolio, to be led by former Resources Minister Josh Frydenberg.Furthermore, Greg Hunt will transition from the environment portfolio to becomethe minister of industry, science and innovation, while Senator Matt Canavanwas named as resources minister.

* According to the Prospectors and Developers Association ofCanada, the 10 listed Canadian miners operating in the Philippines are notconcerned about the potential impact the government of President RodrigoDuterte might have on their operations, the VancouverSun wrote. Duterte previously said he prefers mining assets to be owned bylocals rather than foreign entities, and that miners need to "shape up."

The Daily Dose isupdated as of 7 a.m. New York time, and scans news sources published inChinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai andUkrainian. Some external links may require a subscription.