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Codelco postpones US$2.25B investment amid copper price downturn

TOP NEWS

Codelco postpones US$2.25B investment amid copper price downturn

Driven by weak copper prices worldwide, Chilean copper miner Codelco said it would delay about US$2.25 billion worth of investment, reducing its planned spending for the five years to 2020 to US$18 billion. Codelco also postponed phase two of its Radomiro Tomic project to 2024, and expects to complete the construction of a new level at its El Teniente mine in 2023 from an earlier target of 2020.

Doe Run Peru's smelter, mine to fetch at least US$100M in Q1'17 auction

Doe Run Peru SRL's La Oroya polymetallic smelter and the Cobriza copper mine in Peru are expected to be auctioned in the first quarter of 2017, Reuters reported. The two assets may go for at least US$100 million, but upgrade costs for the smelter are expected to cost US$700 million.

Brazil court annuls Usiminas CEO appointment

A Brazilian regional court accepted Nippon Steel & Sumitomo Metal Corp.'s request to invalidate the May 25 board decision to appoint Sergio Leite as CEO of Usinas Siderúrgicas de Minas Gerais SA. Nippon Steel, a significant shareholder of Usiminas, said that the board did not consult the Japanese firm when it appointed Leite.

DIVERSIFIED

* An African-American employee at BHP Billiton Group's previously owned Pinto Mining Group alleged that he was harassed on the basis of his race and was greeted with Ku Klux Klan symbols and nooses while working at the operations since 2012. He is claiming general damages and punitive damages for the treatment, The Sydney Morning Herald reported. BHP Billiton sold Pinto Mining to Capstone Mining Corp. in October 2013.

* Vale's shift toward new deposits in north Brazil, away from CEO Murilo Ferreira's home state of Minas Gerais, has been commended by investors amid the prospect of higher earnings and lower costs. The move, however, was opposed by a group of local politicians conspiring to oust Ferreira when his term expires in the second quarter of 2017, Bloomberg News reported.

* The Industrial Development Corp. has approved a funding package of 244 million South African rand for Ironveld Plc's high purity iron, vanadium and titanium project, located in the Limpopo Province's Bushveld Complex, South Africa. The company has also finalized an offtake agreement with Oreport (Pty) Ltd. for 100% of high purity iron powder production, totaling 42,000 tonnes per annum, for a period of five years from first production.

BASE METALS

* The Australian government's takeovers panel declined to conduct proceedings on an application by Jervois Mining Ltd., which said that Scandium Development International Pty. Ltd., which holds 0.03% of Jervois, had formed an association with other shareholders and acquired relevant interests in voting shares in the company in breach of section 606. The panel considered that it did not receive enough material to justify making further inquiries.

* According to unnamed sources quoted by FastMarkets and Metal Bulletin, the director of nickel marketing at Vale International SA, Nick Williams, left the company after it announced plans to restructure its base metals division to reduce costs. Williams also stepped down from the nickel committee of the London Metal Exchange, the report added.

* Kosovo's government intends to make a renewed offer to assume control of a huge mining complex, RMHK Trepca Mines, despite strong objections from Serbia, which claims it owns the business, Reuters reported. Kosovo's Parliament is expected to pass a law, giving the government 80% control of the complex on Oct. 7, with the remaining 20% going to the miners.

* South Australia's power supplier, Electranet, said repairs to the transmission lines damaged in a storm last week could be completed by early next week, Reuters reported. The restoration of power will bring BHP Billiton's Olympic Dam copper mine back to normal operations. The mining giant is losing an average of 567 tonnes of copper production at a cost of A$2.7 million per day, Reuters estimated.

PRECIOUS METALS

* St Barbara Ltd. witnessed a slight quarter-over-quarter increase in gold ounces produced during the first quarter of the 2017 financial year to 92,547 ounces, compared to 92,033 ounces in the final quarter of the last financial year.

* The signing of the contract between Lundin Gold Inc. and the government of Ecuador over the Fruta del Norte gold property is scheduled for the last week of October. The occasion would mark the release of the first US$25 million of the US$65 million in royalties the company pledged to pay in advance as part of the agreement reached in January, mining minister Javier Córdova said, news agency Andes reported.

* Lindian Resources Ltd. has executed a binding share sale agreement to acquire the Uyowa and Kahama gold projects in Tanzania, which include two approved prospecting licences and seven primary mining licences that are still in application.

* Central Rand Gold Ltd. has entered into an agreement to acquire mine waste dump material located close to its metallurgical plant in South Africa after confirming the presence of 2.3 million tonnes of gold-bearing material, with an average in-situ grade of 0.7 g/t of gold.

* Normal operations resumed at Sibanye Gold Ltd.'s Cooke gold mine in Gauteng, South Africa, a day after being suspended following clashes between rival unions. The company is investigating assaults on four of its employees, which left two of them critically injured, by unknown assailants during the early hours of Oct. 4.

* Meanwhile, Sibanye CEO Neal Froneman blamed the apartheid-era past for present government regulations and labor problems confronting South Africa's mining sector, Bloomberg News reported. "We need to critically and honestly acknowledge the role of our industry where it acted against the interests of the vast majority of South Africans if we wish to secure full reconciliation with our broader society," Froneman was quoted as saying.

* A Mexican government mediator said that police have cleared three entrances to Goldcorp Inc.'s suspended Penasquito gold mine, while discussions are underway to resolve a blockade. An agreement with land owners and truckers is expected to be reached today, Reuters wrote.

* K92 Mining Inc. said gold production is underway from the Irumafimpa deposit at its Kainantu gold mine in Papua New Guinea, with concentrate shipment deliveries expected to start in November.

* El Capitan Precious Metals Inc. executed an agreement with AuraSource Inc. to sell 600,000 tonnes of head ore over the next 12 months from the namesake El Capitan polymetallic project in New Mexico.

* The recent fall in gold price, which seems to have been driven by speculation of a scaling back in the ECB's asset purchase program as well as an expected U.S. rate hike, is expected to increase demand for the metal from consumers, long-term investors and central banks, according to a report from the World Gold Council.

BULK COMMODITIES

* U.S. District Judge Katherine Forrest dismissed a private antitrust lawsuit brought by aluminum buyers against Glencore, Goldman Sachs Group Inc. and JPMorgan Chase & Co., which accused the defendants of artificially driving up the price of the metal, Reuters reported. Forrest noted in the judgment that "profit by defendants or losses by plaintiffs subsequently experienced in physical aluminum is irrelevant to antitrust standing."

* The Australian Competition and Consumer Commission has extended the timeline for the sale of Glencore Plc's coal haulage operations, GRail, in Hunter Valley, New South Wales, to Dec. 15. The regulator said a third competitor, in addition to Aurizon and Pacific National, is needed to enter the market to break the status quo, The Australian reported.

* The Brazilian Labor Court rejected a claim filed by the Public Prosecutor's Office of Minas Gerais state and the Ministry of Labor against Samarco Mineração SA and its parent companies, Vale SA and BHP Billiton Group, for the reemployment of workers who were laid off following the Fundão dams collapse in November last year, Notícias de Mineração reported.

* Eduardo Parente formally assumed the presidency of Companhia Siderúrgica do Pecém, a joint venture between Vale, Dongkuk Steel Mill, and POSCO, to replace Sergio Leite, Notícias de Mineração reported.

* Kommersant reported that Alexey Mordashov, the 79.2% owner and the head of the board of directors of PAO Severstal, asked the government of Russia to "take measures" to make sure that domestic consumers purchase fittings and other metal products at "the old, higher prices" in letters to Deputy Prime Minister Arkady Dvorkovich, Minister of Industry and Trade Denis Manturov and Head of the Federal Antimonopoly Service Igor Artemyev.

* Kommersant also reported that stocks of coal enterprises of the Kemerovo region exceeded the norm 1.8-fold, reaching 16 million tonnes. Coal producers propose to slow the write-off of old railway carriages to avoid any deficiency. Russian Railways vows to accept all applications but notes that an increase in production is the reason for coal oversupply in warehouses, despite a promise not to do it.

* After Brazilian steelmaker Companhia Siderúrgica Nacional refuted media reports about a potential minority stake sale in its iron ore unit Congonhas Minerios SA, Reuters cited an anonymous source as saying that the steel producer is seeking a minority stake sale based on a valuation of between US$30 billion to US$35 billion.

* Sources said the sale of Vale's fertilizer assets to Mosaic Co. remains on track despite a request from the Brazilian state development bank, or BNDES, to study the deal more carefully. BNDES pushed back the vote on the fertilizer deal at the company's recent board meeting.

* ThyssenKrupp AG has assured about 8,000 Germany-based workers that current collective wage contracts and job guarantees would be upheld during its restructuring, Reuters reported, citing the head of the works council, Guenter Back. The company's works council and representatives from the IG Metall trade union will continue negotiations about potential restructuring measures at the division.

* Vedanta Ltd. intends to raise up to 12.50 billion Indian rupees by issuing non-convertible debentures, Press Trust of India reported.

* Brazilian copper processor Termomecanica has invested 27 million Brazilian reais to adapt part of its existing facilities to produce an initial 200 to 250 tonnes of aluminum products per month, which will target the domestic market and the Mercosul area, Metal Bulletin reported.

* Turkey informed the World Trade Organization that it has launched dispute proceedings against Morocco over anti-dumping duties imposed by the North African country on imports of Turkish hot rolled coil, Metal Bulletin reported.

* Meanwhile, Vietnam's Ministry of Industry & Trade launched an anti-dumping probe into Chinese imports of steel H-beam, Metal Bulletin wrote.

* Dakota Minerals Ltd. entered a binding agreement to sell its Lynas Find lithium project in Western Australia to Pilbara Minerals Ltd. for up to A$8.0 million. Earlier in the week, Dakota estimated a maiden resource at Lynas Find of 7.3 million tonnes at 1.25% lithium oxide, 85 parts per million tantalum pentoxide, and 0.99% iron(III) oxide in the indicated and inferred category.

* Vedomosti reported that PJSC ALROSA asked to simplify the export of diamonds as individuals cannot take them abroad if their value is more than US$25,000.

INDUSTRY NEWS

* In a bid to avoid court hearings following a deadlock, South Africa's President Jacob Zuma asked the Mines Ministry to negotiate an out-of-court settlement with mining companies over the 26% black equity ownership quotas proposed under a new law, Mineweb.com reported, citing Deputy Mines Minister Godfrey Oliphant. Separately, Oliphant was quoted as saying by Bloomberg News that the government wants to finalize the country's mining charter by the end of this month.

* The International Monetary Fund expects metal prices to decline by 2% in 2017, and by 8% in 2016, according to its latest World Economic Outlook. In April, the fund projected a 1% drop in 2017 and a 14% fall in 2016.

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.