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Mitsubishi to raise stake in Anglo's Quellaveco mine to 40% in US$600M deal

TOP NEWS

Mitsubishi to raise stake in Anglo's Quellaveco copper mine to 40% in US$600M deal

Anglo American PLC signed a heads of agreement with Mitsubishi Corp., where the latter will increase its stake in the Quellaveco copper joint venture in Peru to 40%. Mitsubishi, which held an 18.1% stake in Quellaveco prior to the deal, will acquire a 21.9% interest in project-owner Anglo American Quellaveco SA for up to US$600 million. Mitsubishi will pay US$500 million upon the close of the transaction, expected in the third quarter.

Metalloinvest posts 6% YOY rise in profit in Q1 on improved pricing

Improved average prices for iron ore and steel products boosted OAO Metalloinvest's net profit by 6.4% year over year in the first quarter to US$416 million. Revenue increased 19.3% year over year to US$1.81 billion, and EBITDA grew to US$675 million from US$527 million. The company said a change in the product mix had been instrumental in driving up its financial results.

Atlas Iron's shares fall over 18% on loss of priority over Port Hedland berths

Atlas Iron Ltd. shares crashed over 18% in June 14 trade on the ASX after it received a notice from the Office of the Minister for Transport, Planning and Lands, which implied that its North West Infrastructure joint venture did not have priority to develop Stanley Point Berths three and four at Port Hedland in Western Australia.

BASE METALS

* Nevsun Resources Ltd., with its Eritrean partner Eritrean National Mining Corp., approved a self-funded extension to the Bisha zinc-copper mine in Eritrea. Operations will extend through 2022, resulting in additional payable production of 470 million pounds of zinc and 52 million pounds of copper.

* Chesser Resources Ltd. withdrew from the farm-in agreement with Mithril Resources Ltd. over the Kurnalpi nickel project in Western Australia.

* Talga Resources Ltd. could float its Swedish cobalt spinout in the next 12 months, COO Martin Phillips told S&P Global Market Intelligence on the sidelines of the Euro Mine Expo in Skellefteå, Sweden. In May, the ASX-listed miner announced it was seeking to off-load its cobalt projects in northern Sweden into a domestic subsidiary to focus on its graphite business. Talga Battery Metals AB will hold the Kiskama, Ahmavuoma, Aitik East and Lautakoski projects, while Talga Graphene AB is holding its graphite assets.

* Mongolian authorities released the former Finance Minister Bayartsogt Sangajav and the former CEO of state-owned investment company Erdenes Mongol, Byambasaikhan Bayanjargal, Reuters reported. They were arrested in April by the country's anti-corruption agency as part of an investigation related to the Oyu Tolgoi copper-gold project in Mongolia, owned by Rio Tinto unit Turquoise Hill Resources Ltd.

* Peru's Ministry of Energy and Mines plans to begin a tender offer process for its Jalaoca copper-gold-molybdenum project in the Apurimac region July 12. Meanwhile, the auction of the Colca copper-gold project in Apurimac is set for September, Proactivo reported, citing Peruvian investment agency ProInversión.

PRECIOUS METALS

* Gold miner Petropavlovsk PLC agreed to pay a bridge loan of US$29.75 million to iron ore producer IRC Ltd. to help the company meet its credit obligations with the Industrial and Commercial Bank of China. The deal with enable IRC to make a US$35.2 million payment due under the ICBC facility June 20. Petropavlovsk, which holds a 31.10% stake in IRC, said negotiations are underway to refinance IRC's US$340 million facility with ICBC with a major Russian bank, said the gold miner.

* Belvedere Resources Ltd. is considering a business switch and entered into a binding letter of intent to purchase 100% of BlockCoBuilders Inc., a blockchain-based software technologies developer.

* Shanta Gold Ltd. received undertakings from 76% noteholders of its outstanding unsecured subordinated convertible loan notes due April 2019 to vote in favor of a buyback of US$5 million, or about 33.33%, of the US$15 million notes held by third parties. The maturity of the remaining US$10 million of notes will be extended by a year to April 2020.

* The body was recovered of a fifth gold miner that was killed in an incident at Sibanye Gold Ltd.'s Ikamva mine, part of the Kloof gold operations in South Africa.

* Silver Mines Ltd.'s feasibility study for its wholly owned Bowdens silver project in New South Wales, Australia, pegged a posttax net present value, discounted at 5%, of A$70.6 million and a 17.9% internal rate of return.

* AlphaGlobal Capital submitted a claim to the High Court in the British Virgin Islands seeking 142.8 million South African rand from Eastern Platinum Ltd. and its subsidiary Eastplats International, Mining Weekly reported. The amount includes sums outstanding and payable by Eastplats under a 2007 promissory note.

BULK COMMODITIES

* In another move to curb pollution, authorities in China's Hebei province, which is responsible for about 25% of the country's total steel output, will exempt companies that are considered environmental "pace setters" from capacity constraints, Reuters reported.

* Meanwhile, China's steel output in May rose to a record 81.1 million tonnes of crude steel, an 8.9% jump year over year, Reuters reported, citing data from the National Bureau of Statistics. Output in the first five months of the year increased 5.4% year over year to 369.9 million tonnes of crude steel.

* Vancouver-based Arrowstar Resources Ltd. intends to acquire 100% of Recycle Fuel Technologies Inc., a company that plans to recycle used vehicle tires, technical rubber and plastics and convert them to energy and graphitic carbon black.

* ThyssenKrupp AG and Tata Steel Ltd. are said to be discussing changing the terms of their proposed joint venture in Europe in a way that could give the German steelmaker a bigger share of profits, Bloomberg News reported, citing people familiar with the matter. One of the options under consideration is to raise ThyssenKrupp's equity stake in the partnership and keep the voting rights at a 50-50 split, according to the report. ThyssenKrupp is seeking changes to the deal after profits plunged at Tata's European steel business.

* Thyssenkrupp Steel Europe CEO Andreas Goss said excess steel coming to Europe due to U.S. steel tariffs would have a more serious impact than the tariffs themselves, Reuters reported. The executive said tariffs would be "painful, but manageable."

* Mariana, Brazil, Mayor Duarte Junior said Vale SA, which owns Samarco Mineração SA in a joint venture with BHP Billiton Group, has not resumed activities in the municipality, citing its own commercial interests. Junior plans to denounce this apparent abandonment of Samarco next week before the Ministry of Mines and Energy. If Brazilian federal authorities confirm this situation, the federal government could transfer the operation license to another company, Valor Econômico reported.

* U.S. coal destined for Canada could end up in the crosshairs for potential retaliatory tariffs amid rising tensions between the two allies. About 5.3 million tonnes of U.S. coal was exported to Canada in 2017, according to U.S. Energy Information Administration data.

* A pre-feasibility study for Hill End Gold Ltd.'s Yendon high-purity alumina project in Victoria, Australia, outlined a net present value, discounted at 10%, of US$692 million, an internal rate of return of 34% and a 4.1-year payback period.

* Vimy Resources Ltd. said Australia's Macquarie Bank Ltd. sold down its substantial holding in the company from 8.74% in early May to below 0.1%.

SPECIALTY

* Savannah Resources PLC's scoping study at its 75%-owned Mina do Barroso lithium project in northern Portugal estimated a posttax net present value, discounted at 8%, of US$241 million, a 48.6% internal rate of return and a 2.1-year payback period. The project is expected to generate life-of-mine EBITDA of US$805 million.

* Kazakhstan's state-owned National Atomic Co. Kazatomprom JSC signed a contract with Swedish company Vattenfall AB for the supply of natural uranium.

* Piedmont Lithium Ltd. estimated a maiden indicated and inferred resource estimate for its namesake lithium project in North Carolina of 16.19 million tonnes grading 1.12% lithium oxide for 182,000 contained tonnes.

* Petra Diamonds Ltd. announced the voting results from its special general meeting the same day, with 99% of shareholder votes supporting the approximately US$170 million rights issue announced in late May.

* Mineral Deposits Ltd. recommended that shareholders reject Eramet's new takeover offer of A$1.75 per share, saying the offer is still below its independent expert's value range of between A$2.04 per share and A$2.52 per share and remains conditional.

* Canada-based Progressive Planet Solutions Inc. delivered its first sale of commercial-quantity zeolite to a municipality in British Columbia.

* This year, Euro Mine Expo in Skellefteå, Sweden, marked another important milestone in the mining-related history of the region. Skellefteå will soon host Europe's largest lithium-ion battery cell factory. Northvolt AB just kicked off the first phase of construction for the €4 billion gigafactory after receiving a crucial environmental permit.

* Prosper One International Holdings Co. Ltd., not well known as an exploration financier, is making a push to source the metal used in lithium-ion batteries through a potential exploration deal covering a Chilean property held by Lithium Chile Inc.

INDUSTRY NEWS

* Incitec Pivot Ltd.'s Dyno Nobel business was awarded the explosives products and services supply contract for Fortescue Metals Group Ltd. subsidiaries Chichester Metals Pty. Ltd. and FMG Solomon Pty. Ltd. from July 2018 until December 2023. The company said the contract will partially mitigate the expected hit on net profit due to the expiration of the Roy Hill explosives contract and the BHP ammonium nitrate prill contract.

* Separately, Former Fortescue Metals Group CEO Neville Power issued a "call to arms" to Australia's mining executives to stand up to their opponents who would sever the critical ties between industry and communities amid rising distrust in corporate Australia.

* Chinese investment is expected to continue in Australia's mining sector, which bucked the 2017 trend when the Asian giant's global overseas direct investment fell 29% amid broader concerns among Chinese executives of feeling increasingly "unwelcome" Down Under. KPMG International's latest "Demystifying Chinese Investment in Australia" report revealed that mining was the most significant sector for Chinese investment in 2017 with 35% of total overseas direct investment.

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