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BHP, Rio Tinto to hold talks with Western Australia over iron ore taxes

TOP NEWS

BHP, Rio Tinto to hold talks with Western Australia over iron ore taxes

BHP Billiton Group and Rio Tinto will seek clarification with the Western Australian government on proposed iron ore taxes, The Australian Financial Review reported. This comes after Western Australian Premier Mark McGowan said the state would request that both companies pay a lump sum in lieu of the current lease rental fee under the state's Regulation 28A. Association of Mining and Exploration Companies CEO Simon Bennison said McGowan's proposed plan increased sovereign risk and will limit future investment in the state.

South32 agrees to sell Davel coal operation in South Africa

South32 Ltd. agreed to sell its 400 million-tonne Davel coal mining right in South Africa's Mpumalanga province to Scinta South Africa for 187 million South African rand, Mining Weekly reported. As part of the deal, Scinta also agreed to acquire the Ermelo Mines' infrastructure, railway loop and discard dump.

Coal India's Q4, FY'17 profit slides YOY

Coal India Ltd. posted a consolidated net profit of 27.16 billion Indian rupees, or 4.38 rupees per share, in the fourth quarter of its fiscal 2017, compared with 43.98 billion rupees, or 6.96 rupees per share, a year ago. For the year that ended March 31, the state-run miner booked net income of 92.66 billion rupees, or 14.78 per share, compared with 142.67 billion rupees, or 22.59 rupees per share, a year earlier.

BASE METALS

* Poseidon Nickel Ltd. and GTI Resources Ltd. terminated the option and lease agreement covering three tailings dams at the former's Windarra nickel-gold property in Western Australia, as well as three gold mining exploration leases.

* Teck Resources Ltd. will decide by mid-2018 whether to invite a partner into its Quebrada Blanca Phase 2 expansion project, CEO Don Lindsay told analysts, daily Diario Financiero reported. The expansion project is advancing the environmental impact assessment report for regulatory approval.

* Codelco reduced its C1 cash cost to US$1.34 per pound of copper in the first quarter, down 16% compared with the same period in 2014. The figure is 6% below the Chilean mining industry average, excluding the state miner, daily Pulso reported.

* The Indonesian government expects to wrap up talks with Freeport-McMoRan Inc. over a contract dispute for the company's local operations by October, The Jakarta Globe reported.

* Concerns about nickel ore supply from the Philippines erupted following the implementation of martial law in the Mindanao region, but market observers said the impact on nickel prices is likely to be minimal for now, Metal Bulletin reported. Out of the country's 28 operating nickel mines, about 20 are based in Mindanao.

PRECIOUS METALS

* Barrick Gold Corp. began a formal dialogue process with the striking union at the Veladero gold mine in Argentina, ending the work stoppage that began May 28.

* Meanwhile, a union leader told Bloomberg News that if management fails to resolve a contractual feud by June 19, the union will resume the strike at Veladero.

* Sibanye Gold Ltd. CEO Neal Froneman said there is a "high degree of concern" for the economic viability of up to 300,000 ounces of the company's platinum group metals output, should the slump in the South African rand basket price of the metals continue, Miningmx reported. "If by year-end, this production is not profitable, closure may be the only option," Froneman added.

* Eco Oro Minerals Corp. resolved issues raised by dissident shareholders Harrington Global Opportunities Fund Ltd. and Courtenay Wolfe regarding the grant of 2,150,000 options to company directors and officers earlier in May. Harrington and Wolfe will withdraw a request that the British Columbia Securities Commission set aside the option grant, and the company will rescind 400,000 of the options, with the remainder not able to be exercised until after the company's next shareholder meeting.

* Minera Frisco SAB de CV is denying access to employees of transport contractor companies to its San Francisco del Oro gold mine in Mexico after abruptly announcing the end of contract negotiations May 26, daily El Sol de Parral reported.

* Santacruz Silver Mining Ltd.'s Impulsora Minera Santacruz SA de CV unit secured a five-year exclusive right to explore, develop and mine the Membrillo silver-zinc-lead-gold vein structure in Mexico from Grupo México SAB de CV.

* A preliminary economic assessment for the Kemess East gold-copper deposit within AuRico Metals Inc.'s Kemess property in British Columbia generated an after-tax net present value of C$375 million at a 5% discount rate and an internal rate of return of 16.7%, while total project CapEx is pegged at C$783 million.

* Sumatra Copper & Gold Plc reduced the full-year guidance for the Tembang gold-silver project in Indonesia to between 40,000 and 50,000 ounces of gold equivalent, from between 45,000 and 55,000 ounces of gold equivalent, due to delays in open pit ore production at the Berenai deposit.

* A preliminary economic assessment on an expansion at Richmont Mines Inc.'s Island gold mine in Ontario confirmed that an increase in underground mine and mill productivity to 1,100 tonnes per day will support production growth of 22% at low cash costs and a robust cash flow stream over the eight-year, phase-one period, requiring incremental capital of C$28.2 million.

BULK COMMODITIES

* Queensland Treasurer Curtis Pitt said the Queensland government will not block the Australian government's A$1 billion loan to India's Adani Enterprises Ltd. to help fund the Carmichael coal mine, rail and port project in the state, The Australian Financial Review reported.

* Edenville Energy Plc received a formal request from the Tanzania's ministry of energy and minerals to proceed with the development of its Rukwa coal-to-power project in the country.

* Carpentaria Exploration Ltd. signed a nonbinding letter of intent with United Steel Industrial Co., or Kuwait Steel, for the sale of 1 million tonnes per annum of supergrade pellet feed from the Hawsons iron ore joint venture in New South Wales, Australia.

* European steelmakers urged European Union leaders not to burden the industry with extra carbon emissions costs, which they believe would make metal producers noncompetitive against foreign rivals and raise the risk of layoffs and plant shutdowns, Reuters reported.

* Formosa Plastics Group restarted its US$11 billion Formosa Ha Tinh Steel plant in Vietnam after the site's operations were suspended for causing one of the country's worst environmental disasters in April 2016, Reuters wrote. The company paid US$500 million in compensation.

* The Philippines is eliminating a most-favored nations tariff of 3% on imported steel billet from June 17 onward, Metal Bulletin reported, citing market participants. The move will provide better opportunities for major billet suppliers from countries such as Russia, Ukraine and Turkey, which were at a disadvantage against Chinese sellers.

SPECIALTY

* Savannah Resources Plc's scoping study over the Mutamba mineral sands project, which is being developed in partnership with Rio Tinto, estimated an initial mine life of 30 years and preproduction CapEx of US$152 million, plus US$74 million for contingency. The study estimated first production in 2020 with average annual production of 456,000 tonnes of ilmenite and 118,000 tonnes of nonmagnetic concentrate.

* Image Resources NL's feasibility study over its wholly owned Boonanarring and Atlas mineral sands projects in the North Perth Basin in Western Australia pegged a pretax net present value, discounted at 8%, of A$135 million, a 64% pretax internal rate of return, and a 22-month payback period. Capital costs are estimated at A$52 million. The company has secured an off-take agreement for 100% of the heavy mineral concentrate to be produced for the life of the project.

* Sheffield Resources Ltd. signed a nonbinding memorandum of understanding for the future sale of high-quality, low-temperature roast ilmenite produced from the Thunderbird mineral sands project in Western Australia.

* European Union antitrust regulators approved French utility EDF's planned takeover of Areva SA's nuclear reactors business, Reuters reported. EDF intends to take a 51% to 75% stake in AREVA NP.

* The National Union of Mineworkers at Petra Diamonds Ltd. and Ekapa Mining Pty. Ltd.'s Kimberley diamond joint venture in South Africa said it was "very concerned and disturbed" by the alleged racist treatment of mine workers by management, African News Agency reported.

* According to a Research and Markets report, the global graphite market is projected to reach US$29.05 billion by 2022, with aerospace and defense, wind energy and automotive industries driving the growth.

INDUSTRY NEWS

* Australian explorers questioned the federal government's recent decision to scrap the Exploration Development Incentive, saying it demonstrates a lack of understanding of the exploration sector. The past two years have been the worst on record for greenfields exploration in Australia, with at least 30% of all equity raised in the country still being funneled into overseas exploration, according to Simon Bennison, CEO of the Association of Mining and Exploration Companies.

* Simon Bennison will retire as the CEO of the Association of Mining and Exploration Companies in August.

* Bolivian mining geology service Sergeomin plans to invest between 5 million Bolivianos and 10 million Bolivianos in prospecting and exploration projects in the Tarija, Potosí, Beni, Oruro and Pando departments, daily La Razón reported.

* At least eight mining projects will begin operations in Mexico this year, led by Pan American Silver Corp.'s US$112 million Dolores silver-gold mine in Chihuahua and the expansion of its La Colorada silver mine in Zacatecas, daily Outlet Minero 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.