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X2 Resources forced to restructure after key investors exit; Mixed bag Senate makes for unclear future for Australian miners; Fitch downgrades Samarco on restart delays, depleting cash

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X2 Resources forced to restructure after key investors exit; Mixed bag Senate makes for unclear future for Australian miners; Fitch downgrades Samarco on restart delays, depleting cash

TOP NEWS

MickDavis' X2 ResourcesLtd. 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.

Australianminers are likely to be in for an uncertain three years despite the Liberal-NationalCoalition having returned to government as the recent Senate outcome gives theCoalition diminished political authority. A majority of 39 is needed in theSenate to pass legislation, but the Coalition will only have up to 29 seats,which means they will need to rely on the minority parties to achieve amajority vote. One of theimplications is that the Coalition may not be able to deliver on its electioncommitments, which include proposed corporate tax cuts.

FitchRatings downgradedSamarco MineraçãoSA's long-term foreign- and local-currency issuer default ratingsas well as its senior unsecured debt ratings to C from CCC, based on the assumptionthat it will not be able to restart operations by the second half of 2017. Therating agency believes that Samarco will be forced to request a standstill orrestructure its debt within the next few months, as the company seeks topreserve cash for expenses related to obtaining operating permits.

DIVERSIFIED

*UBS analysts suggest that RioTinto's new CEO Jean-Sebastien Jacques is expectedto speed up the mining giant's asset divestment program in the next threeyears, The Australian reported. Theinvestment bank anticipates the company will make noncore asset sales totalingabout US$4 billion in the next three years.

BASE METALS

*Metals X Ltd.advanced itsincreased off-market takeover for Aditya Birla Minerals Ltd., which owns the copper mine inWestern Australia, after Aditya major shareholder received thenecessary approvals from the Reserve Bank of India to accept the sale of its51% interest. In April, Metals X agreed to raise its bid to 1 Metals X sharefor every 4.5 Aditya Birla shares plus 8 Australian cents per share in cash,which values Aditya Birla shares at 32.9 cents each.

*The Philippine government issueda suspension order on unlisted firm Berong Nickel Corp.'s nickel mine in Palawan because of a spill thataffected corals, Reuters reported, citing a statement from Department ofEnvironment and Natural Resources Secretary Gina Lopez. This is the third nickelmine to be suspended in less than two weeks.

*Lack of a long-term vision and the ongoing commodities price slowdown have ledCodelco to afinancial crisis, El Mercurio reported.The Chilean state miner has been scarcely capitalized since its nationalization45 years ago and has reinvested only an average of 6% of its surplus in thelast 25 years. In comparison, the private mining sector has reinvested about50% of its profits in the same period.

*Rising electricity costs and outages in South Australia are becoming asignificant concern for the sustainability of 's copper operationsdespite the company having reduced energy consumption with minimal impact toproduction, The Australian FinancialReview reported.

PRECIOUS METALS

*Lundin Gold Inc.'sFruta del Nortegold project in Ecuador would requireapproximately 2,000 workers for its construction phase, with between 700 and800 new positions open for skilled labor and the remaining number to be filledby administrative personnel, news agency Andes reported.

*Zijin Mining Group Co.Ltd.'s net profit attributable to owners of the parent year over year to530 million Chinese yuan in the first six months of 2016, according topreliminary figures. The steep fall in the Chinese group's profit wasattributed to the impact of hedging as certain products did not benefit fromrising commodity prices.

*Great Panther SilverLtd. said the processing plant at its silver mine in Mexico hasresumed fulloperation.

BULK COMMODITIES

*The Environmental Protection Authority will recommendfor approval the development of Mount Gibson Iron Ltd.'s Iron Hill iron ore deposit in WesternAustralia to Environment Minister Albert Jacob, The West Australian reported.

*Wollongong Coal Ltd.awarded a miningservices contract to Delta SBD Ltd. for its Wongawilli coal mine in New South Wales. Thearrangement is for an interim period of about two years, covering the extractionof up to 1.45 million tonnes.

*BHP Billiton has launchedan integrated remote operations center in Brisbane, Queensland that will coverseven mines under the BHPBilliton Mitsubishi Alliance, AustralianMining reported.

*Fortescue Metals GroupLtd. is likely to be the onlyone of the big three iron ore players to top its production target whenJune quarterly results are released this week, The Australian Financial Review reported. The company has alreadysurpassed its 165million-tonne shipping guidance for the fiscal year ended June 30, withshipments totaling 169.4 million tonnes.

*Sanjeev Gupta's Liberty House is settingits sights on struggling Ontario steel producers 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.

*Coal of Africa Ltd.'sextended takeover offer for Universal Coal Plc was due to unfulfilledconditions, including the failure to finalize a coal sales contract with SouthAfrican power utility Eskom. The sales contract would have seen the companystart mining at the NewClydesdale project in South Africa, and generate cash flow toprovide the combined entity sufficient working capital for at least 12 months.

SPECIALTY

*Underground mining operations at DiamondCorp Plc's Lace 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.

*MZI Resources Ltd.'soff-take customer has requested asignificant increase to the contracted sales volumes for its L70and L88 leucoxene product from the Keysbrook mineral sands project in Western Australia, inthe December half. The higher volume substantially offsets the previouslyannounced volume reduction and will result in the sale of all L70 produced thisyear.

*Valence IndustriesLtd., which suspended processing activities at its graphite mine in SouthAustralia in early December 2015 to reduce operating costs, was in voluntaryadministration with the appointment of Laurie Fitzgerald and Michael Humphrisof William Buck as administrators.

*The Environmental Protection Authority is expectedto give its approvals for ToroEnergy Ltd.'s Wiluna and VimyResources Ltd.'s Mulga Rock uranium projects in Western Australia, Australian Mining reported.

*CNNC InternationalLtd. expects to narrow its loss in the first half of the year comparedto the loss posted in the corresponding 2015 period. In the first half of 2015,CNNC shared the loss of its associate Société des Mines d'Azelik SA, and had made fullprovision of about HK$119.9 million for its investment equity of and loanreceivables from the latter. As the carrying amount of interest in Somina wasnil by 2015-end, the group is no longer required to share any further lossesthis year if any, until it becomes a positive net asset position.

INDUSTRY NEWS

*According to the Prospectors and Developers Association of Canada, the 10listed Canadian miners operating in the Philippines are notconcerned about the potential impact the government of President RodrigoDuterte might have on their operations, the Vancouver Sun wrote. Dutertepreviously said he prefers mining assets to be owned by locals rather thanforeign entities, and that miners need to "shape up."

The Daily Dose is updated asof 7 a.m. London time, and scans news sources published in Chinese, English,Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Someexternal links may require a subscription.