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Adani receives key Carmichael approval; Teck secures US$2.5B for Quebrada Blanca

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Adani receives key Carmichael approval; Teck secures US$2.5B for Quebrada Blanca

TOP NEWS

Adani nabs key approval for Carmichael coal mine

Adani Enterprises Ltd.'s plan to protect the endangered black-throated finch at its Carmichael coal mine in Queensland, Australia, was approved by the state's Department of the Environment and Science. A decision on the mine's water management plan, the last permit the company needs to start construction at the project, is expected June 13.

Teck secures US$2.5B funding for Quebrada Blanca; ups share buyback to US$1B

Teck Resources Ltd. signed a 12-year, US$2.5 billion limited recourse project financing facility from a consortium of banks, which it will use to develop phase two of the Quebrada Blanca copper mine in Chile. The financing is expected to close before the end of the third quarter, with first borrowing under the facility not expected to be required until late this year. Separately, Teck said it would repurchase a further C$600 million of class B subordinate voting shares, bringing its total share buyback to C$1 billion since November 2018. The miner will also redeem all of its US$600 million in 8.5% notes due in June 2024.

Trade war propping up Chinese rare earth shares, commodity prices

Shares of Chinese rare earth companies have surged after the country signaled it may use its dominance in rare earths — a strategic mineral used in goods from phones to guided missiles — as leverage in the ongoing trade war with the U.S. Analysts are predicting that tensions will continue to prop up the prices of such stocks and the underlying commodity.

BASE METALS

* Codelco's pretax profit for the first quarter dropped 31% on a yearly basis to US$372 million, Reuters reported. The Chilean state-owned miner's copper production totaled 342,000 tonnes in the first quarter, down 18% year over year. Meanwhile, unions at its Chuquicamata operation said they are willing to initiate government-mediated talks May 31 to avert a strike.

* URU Metals Ltd. will write down its 50% interest in the Burgersfort nickel assets in South Africa and instead focus on its Zebediela nickel-platinum group metals project.

* SolGold PLC and Cornerstone Capital Resources Inc. expect Ecuador's Constitutional Court to reject a petition to hold a mining referendum that could impact their Cascabel copper-gold joint venture.

* Zambia's attempt to seize Vedanta Resources Ltd.'s Konkola Copper Mines PLC over alleged environmental breaches should serve as a warning for other mining companies to follow the law, Reuters reported, citing a statement by Mines Minister Richard Musukwa. Separately, Vedanta said its executives were not able to visit the Zambian operation and meet the local management, Reuters reported.

* An updated feasibility study for RNC Minerals' Dumont nickel-cobalt project in Quebec delivered a posttax net present value, discounted at 8%, of US$920 million, with a 15.4% internal rate of return over a 30-year mine life.

* Cobalt Blue Holdings Ltd. entered into an agreement with Mitsubishi Corp. to conduct market trials for the sale of elemental sulfur produced from the Thackaringa cobalt project in New South Wales, Australia, with a view to negotiate an off-take deal should the trial prove successful.

PRECIOUS METALS

* Goldplat PLC's Kilimapesa gold operations in Kenya were put on care and maintenance as the company looks for external funding required to develop the operations. A number of stakeholders have agreed to not demand payment in the next six months, the company noted.

* St Barbara Ltd.'s share price slid about 6% as the company slashed its consolidated gold production guidance for fiscal 2019 to about 355,000 ounces, from 365,000 to 375,000 ounces, due to lower production volumes at the Gwalia gold mine in Western Australia.

* Endeavour Silver Corp. slashed the workforce at its Mexican silver-gold operations by 18% as part of an effort to improve the company's financial performance for the rest of the year.

* Hunt Mining Corp. agreed to acquire the issued share capital of London-listed junior Patagonia Gold PLC in a deal where Patagonia shareholders will receive 10.76 shares of the merged company for each share held.

* Agnico Eagle Mines Ltd. achieved commercial production at its Meliadine gold mine in Nunavut, Canada, ahead of schedule and below budget.

* NV Gold Corp. signed a binding letter of intent to lease the Slumber gold property in Nevada. A preliminary exploration program will start shortly.

* Discovery Metals Corp. agreed to acquire Levon Resources Ltd. through a share exchange of 0.55 of a Discovery share for each Levon share to create a silver-focused exploration company in Mexico. Upon closing, former shareholders of Discovery and Levon will hold 50.4% and 49.6%, respectively, of the combined entity.

* Meteoric Resources NL closed its previously announced acquisition of the Juruena and Novo Astro gold projects from Crusader Resources Ltd.

* Pure Gold Mining Inc. launched an up to 12,000-meter diamond drilling program at the Madsen Red Lake gold mine in Ontario, which will focus on converting and growing the resource estimates at the Wedge, Fork and Russet South discoveries. The program is targeted for completion in December.

BULK COMMODITIES

* China Hongqiao Group Ltd. named Zhang Bo chairman of the world's biggest aluminum producer, Reuters wrote. He has been CEO since 2011 and will hold the role in addition to his new responsibilities. His father, Zhang Shiping, founded the company and was chairman until his death May 23.

* The Cooperative Research Centre for Greenhouse Gas Technologies, an Australian research organization backed by the country's black coal producers, sanctioned a A$45 million project in Victoria, Australia, to advance carbon capture and storage technologies.

* IndiOre Ltd. agreed to divest Indian subsidiary NSL India MRI to Benita Industries in exchange for the latter taking over all financial liabilities. Meanwhile, the company signed a binding deal with Gold Valley Iron to purchase the Frances Creek crushing and screening plant for A$2.5 million and to process iron ore on the Ridges iron project in Western Australia.

* PJSC Novolipetsk Steel's controlling shareholder, Vladimir Lisin, said Russia should look at imposing tariffs on some metal products from China due to quality and dumping concerns, Reuters reported May 31.

* Vale SA did not acknowledge several workers' concerns about the unstable dam structure at the Feijao mine in Brazil before it collapsed and killed nearly 300 people in January, The Wall Street Journal reported. The company denied ignoring warning signs.

* Vale CEO Eduardo Bartolomeo, who succeeded Fabio Schvartsman, will keep his post until 2021 following a vote by the board, Fastmarkets MB wrote.

* Coal India Ltd.'s attributable net profit in the fourth quarter of its fiscal 2019 jumped to 60.24 billion Indian rupees from 13.03 billion rupees a year ago. Production totaled 194.5 million tonnes of raw coal, up from 183.5 Mt produced in the fourth quarter of fiscal 2018.

* S&P Global Ratings revised the outlook for U.S. Steel Corp. to stable from positive due to its plans to increase capital expenditure and a US$300 million share buyback. The rating agency affirmed its rating on the steelmaker at B.

* The U.S. Commerce Department issued a preliminary antidumping duty on aluminum wire and cable imported from China.

* Russian steelmaker PJSC Novolipetsk Steel said its US$500 million placement of seven-year eurobonds was more than three times oversubscribed.

* A Eurasian Resources Group SARL unit signed a memorandum of intentions with China Communications Construction Co. Ltd. and China Railway Group Ltd. for the US$2.6 billion construction of the mine and related infrastructure for the Pedra de Ferro iron ore mine in Brazil's Bahia state, Valor International reported.

* Atlantic metallurgical coal and metallurgical coke markets are facing potentially lower spot activity from further weakening in European steel demand, according to S&P Global Platts.

* National Mineral Development Corp. Ltd. plans to acquire the 21.44% shareholding it does not already own in Legacy Iron Ore Ltd., The New Indian Express reported.

SPECIALTY

* Aiming to capitalize on the recent tensions between the U.S. and China over rare earths, Canada-based Hudson Resources Inc. said it is in discussions with several parties about a possible partnership to develop its Sarfartoq Carbonatite rare earths project in Greenland. Shares in Hudson rose as much as 9%.

* De Beers SA ended production at its Victor mine in Ontario, the first and only diamond mine in the Canadian province, Canadian Mining Journal wrote. The last economic ore was processed May 25, and the mineral processing plant will be permanently shut down by the end of June.

* MP Materials is seeking the U.S. government's help as it faces short-term refining challenges amid the country's plan to lessen its reliance on China over rare earths minerals, CNBC reported, citing MC Minerals co-Chairman James Litinsky, who also said the company's Mountain Pass mine in California should be self-sufficient by 2020.

* Australian Vanadium Ltd. outlined a JORC 2012-compliant inferred uranium and vanadium resource for the Nowthanna Hill project in Western Australia. At a cutoff grade of 250 parts per million vanadium pentoxide and 200 ppm uranium, the project hosts 3.60 million tonnes grading 337 ppm vanadium pentoxide and 4.73 Mt grading 404 ppm uranium.

INDUSTRY NEWS

* Zimbabwean Energy Minister Fortune Chasi said mining companies can secure supply of electricity by paying in foreign currency, Reuters reported, as the country's largest hydroelectric plant is expected to halt output in 14 weeks due to falling water levels.

* Defaults are on the rise in the metals and mining sector this year, and many of the companies are based in the U.S., according to S&P Global Ratings.

* Encounter Resources Ltd. Managing Director Will Robinson said junior miners are benefitting from the recent rush by majors into greenfield exploration to search for new discoveries to top up their depleting resource pipelines, The West Australian reported.

* Of the top 25 mining companies by market value as of May 24, 14 bested their S&P Global Market Intelligence consensus EPS estimates for the first quarter, three met estimates and seven underperformed.

* Western Australian Premier Mark McGowan warned that individual states may take their own steps on climate policies unless the national government comes up with workable plans to reduce greenhouse gas emissions, The West Australian reported.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.

S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.

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