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Glencore, Yancoal in talks for Rio Tinto's Australian coal assets

TOP NEWS

Glencore, Yancoal in discussions for Rio Tinto coal mines in Australia

Mining majors Yancoal Australia Ltd., a Yanzhou Coal Mining Co. Ltd. subsidiary, and Glencore Plc are said to be in advanced discussions to acquire Rio Tinto's coal mining assets in Australia, The Australian reported. According to the report, no single party is conducting exclusive due diligence, but "bilateral talks" are underway with both the hopefuls.

Samarco Mineração misses interest payment on US$500M bond

According to the Bank of New York Mellon Corp., Vale SA and BHP Billiton Group-owned Brazilian iron ore miner Samarco Mineração SA failed to make an interest payment on a US$500 million bond that was due Sept. 26, Reuters reported. Under the terms of the 5.375% security due in Sept. 2024, Samarco Mineração will have a 30-day period to make the payment, or else investors holding at least 25% of the bond could declare the principal due immediately. The payment is said to be worth about US$13.5 million, the report cited two bondholders as saying.

Rio Tinto to redeem up to US$3B in debt

Taking advantage of its strong liquidity position, Rio Tinto has launched another buyback of its outstanding notes, this time aiming to reduce its debt bill by up to US$3 billion. Under the plan, the global mining giant will redeem about US$1.5 billion of its 2017 and 2018 U.S. dollar-denominated notes, and started a cash tender offer to buy back up to approximately US$1.5 billion of its 2019, 2020, 2021 and 2022 notes.

BASE METALS

* A Canadian court will decide in the next few months whether a lawsuit filed by a group of Eritrean former mine workers who claimed they were forced to work in Nevsun Resources Ltd.'s Bisha mine can proceed, Reuters reported. The claim alleges the Eritreans worked for the Bisha mine between 2008 and 2012 while serving as conscripts for the Eritrean government. The workers were paid roughly US$1 per day and were forced to work in harsh conditions. The company has denied the allegations, adding that it will vigorously defend itself in court.

* Teck Resources Ltd. has submitted the Social and Environmental Impact Assessment for the second phase of its Quebrada Blanca copper-molybdenum mine in Chile. Phase-two operations at the site are expected to have the annual capacity to produce more than 250,000 tonnes of copper and 8,000 tonnes of molybdenum in concentrate for the first 10 years of the mine's life.

* Newcrest Mining Ltd. has decided to match the proposal tabled by Maxit Capital LP for stock in SolGold Plc, agreeing to pay the 16 U.S. cents per share of Maxit's offer, which SolGold had declared superior to the Newcrest's initial proposal priced of 8 cents. The investment will result in a cash balance of US$48 million, which will be used for the Cascabel copper-gold project in Ecuador.

* African Copper Plc's Mowana copper mine in Botswana has found a buyer, a year after the mine was liquidated over a debt of 47 million Botswana pula, African News Agency reported. The mine received six offers from potential buyers and the winning bid is anticipated to be disclosed Oct. 7.

PRECIOUS METALS

* Highland Gold Mining Ltd.'s first-half earnings attributable to shareholders totaled US$36.8 million, a 159% increase on a yearly basis, reflecting higher gold output, higher prices and lower costs due to a cheaper Russian ruble.

* Goldplat Plc bounced back into the black in the year ended June 30, posting an attributable profit of £946,000 from a £1.1 million loss attributable to shareholders in the preceding year. The company also booked a 21% increase in revenues, to £20.2 million, as both gold production and sales rose during the period.

* Moody's said that Nord Gold SE's recent launch of the US$140 million Bouly gold mine in Burkina Faso, near its largest existing mine, Bissa, was credit positive as it will increase the company’s scale and support its leverage and interest coverage metrics.

* As part of its portfolio management strategy, Kinross Gold Corp. sold 5.5 million common shares of Lundin Gold Inc. to GMP Securities LP for C$30.8 million.

* Windward Resources Ltd. has requested an extension to its share suspension until Oct. 3, pending the review of a material transaction proposal from an unnamed third party, The West Australian reported. The rival proposal came a week after Windward entered into an agreement with Eastern Goldfields Ltd. pursuant to which the latter agreed to make a A$2.2 million investment for a 14.3% stake in Windward.

* Silver Range Resources Ltd. finalized an option agreement with Rover Metals Corp. over the former's Up Town gold project in Canada's Northwest Territories, consistent with the previously agreed terms under the letter of intent signed in August.

* Auryn Resources Inc. acquired an option from local Peruvian company Exploandes S.A.C to earn a 100% interest in the Banos del Indio gold project, covering 7,534 hectares in southern Peru.

* Tasca Resources Ltd. secured an option to earn up to a 100% interest in the Princeton gold property, which comprises 13 claim units covering 4,013 hectares in British Columbia.

* Goldcorp Inc. has entered into a partnership agreement with Sandvik Mining and Rock Technology in a bid to transform the company's Borden Lake gold project in Ontario into one of the world's first all-electric mines, Australian Mining reported.

* Probe Metals Inc. inked a memorandum of understanding with Mattagami and Flying Post First Nations, envisaging cooperation between the parties, in regard to the company's early stage West Porcupine gold project in Ontario.

* An employee of Argonaut Gold Inc.'s Mexican unit Minexson SA de CV was fatally injured in an accident at the El Castillo gold-silver mine in Durango, Mexico, on Sept 25.

BULK COMMODITIES

* Companhia Siderúrgica Nacional is mulling over the partial sale of its stake in Brazilian iron ore producer Congonhas Minérios SA to China Brazil Xinnenghuan International Investment Co., Reuters reported, citing two people familiar with the transaction. According to the report, Chinese mill CBSteel is interested in the direct acquisition of an approximately 25% stake in Congonhas. The deal hinges on CSN being able to secure long-term supplying contracts from CBSteel, as well as valuing Congonhas at about US$20 billion.

* James Rickards, Yancoal Australia's general manager of investor relations and corporate affairs, urged the New South Wales government to introduce reforms in the planning system and called on ministers to stop outsourcing mine approvals to committees and panels, The Australian Financial Review reported.

* Fishermen filed lawsuits in a Vietnamese provincial court against Formosa Ha Tinh Steel, a subsidiary of Taiwan's Formosa Plastics, seeking compensation for a discharge of toxic waste into the sea that killed tens of millions of fish in April, Reuters reported.

* According to Citigroup Inc., leading iron ore exporters Brazil and Australia will each add about 100 million tonnes of supply by 2020, worsening the global glut and hurting prices in a slump that will force marginal miners to slash output, Bloomberg News reported.

* Gensource Potash Corp. finalized the terms on a pay-or-take off-take agreement with Yancoal Canada Resources Co. Ltd., pursuant to which the latter will buy 100%, or 250,000 tonnes per year of the planned production capacity, from Gensource's potash facilities for an initial five-year term.

* Chongqing Iron & Steel Co. Ltd. posted a first-half loss of about 1.8 million Chinese yuan, narrowing from a loss of approximately 2.2 million yuan recorded for the corresponding period last year. Revenue declined 38% year over year to about 2.8 million yuan.

* Dongbei Special Steel Group Co. Ltd. missed another one-year bond payment, its ninth default this year, Reuters reported. The company failed to pay 744 million Chinese yuan of principle and interest on the bond.

* According to sources, the British Steel Pension Scheme stands as a hurdle in Tata Steel Ltd.'s negotiations for a merger of its European operations with another steelmaker, Metal Bulletin reported.

* Semirara Mining & Power Corp. received a notice validating the company's report that its coal mining operations adhere to the Philippine government's environment standards, meaning its Semirara coal mine is safe from closure, BusinessWorld reported. Still, the company warned that shutting its coal mine could have been "disastrous" to the country.

* RBC Capital Markets said Alcoa Inc.'s 345-million-tonne-per-annum Portland aluminum smelter in Victoria, Australia, is likely to close after a A$115 million per year electricity subsidy expires in November, which could accelerate the closure of the Hazelwood brown coal generator, The Australian Financial Review reported.

* Bloomberg News, citing the Colombian Mining Association, reported that the country's coal production is expected to reach 85 million tonnes, missing a government target of 90 million tonnes because data collected earlier this year was inflated.

* Data from China's National Development and Reform Commission showed that from January to August, the country's aggregate coal output fell 10.2% year over year to 2.18 billion tonnes.

SPECIALTY

* Gemfields Plc intends to increase annual production at its Kagem Mining Ltd. operations to 30 to 35 million carats of emerald and beryl, driven by an investment of about US$10 million. Meanwhile, the company also plans to earmark about US$25 million to boost annual output targets at Montepuez Ruby Mining Ltda. to 10 to 12 million carats of ruby and corundum.

* Iluka Resources Ltd.'s newly appointed CEO and managing director Tom O'Leary said that his immediate priority would be to develop plans to address the first-half loss booked by the company, The West Australian reported.

* Margaret Lake Diamonds Inc. completed the acquisition of the remaining 40% interest in the Margaret Lake diamond property in Canada's Northwest Territories.

* A definitive feasibility study on Altura Mining Ltd.'s Pilgangoora lithium project indicated a pretax net present value of A$411 million over an initial 13-year mine life, based on the current ore reserve estimate of 20.33 million tonnes.

* Lucapa Diamond Co. Ltd. recovered an exceptional 172.67-carat diamond at its Lulo project in Angola.

INDUSTRY NEWS

* Citing a local newspaper, Reuters said China has launched a 350-billion-yuan restructuring fund to bolster the government's "supply-side" reforms, which include mergers of inefficient state enterprises and job cuts in struggling sectors such as coal and steel.

* Liu Xiangmin, vice president of Aluminum Corp. of China Ltd., or Chalco, told delegates at the China Mining Congress and Expo 2016 that China is seeking to speed up its urbanization and industrialization initiatives over the next few years, which will support demand growth for the mining sector. However, Liu said the downturn in mining was unlikely to end soon and called for domestic producers to exercise supply discipline.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.