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In This List

China seeks compensation from US for lost trade due to metals tariffs

COVID19 Mining Impacts Mining Projects With At Risk Production

Mining Insights Newsletter June 2020

A Decade of Underperformance for Gold Discoveries

State of the Market: Mining Q1-2020


China seeks compensation from US for lost trade due to metals tariffs

TOP NEWS

China seeking compensation from US for lost trade due to metals tariffs

China is seeking compensation from the U.S. for potential lost trade due to the tariffs on steel and aluminum announced by President Donald Trump earlier this month in what could be the first step toward a formal dispute between the two countries in the World Trade Organization, Bloomberg News reported. The Asian nation dismissed the claim of the U.S. that the new tariffs are on national security grounds. China said the tariffs are proposed by the U.S. to protect domestic producers.

OZ Minerals to acquire Brazil-focused copper-gold miner Avanco for A$418M

OZ Minerals Ltd. intends to make an off-market takeover offer to acquire Brazil-focused copper-gold miner Avanco Resources Ltd., valuing the target at A$418 million, or 17 cents per share. Avanco shareholders will receive 8.5 cents in cash and 0.009 OZ Minerals shares per Avanco share.

Germany said to be at odds with France over approach to US tariffs

While Germany is in favor of giving concessions to the U.S. to prevent tariffs on European steel and aluminum, France is looking to pressure China over state subsidies and overcapacity in the steel industry, Bloomberg News reported, citing unidentified government officials.

DIVERSIFIED

* BHP Billiton Group approved a dividend reinvestment plan for its shareholders, which is expected to be operational for the fiscal 2018 final dividend. The plan allows shareholders to reinvest their dividends to purchase additional ordinary shares in the company.

BASE METALS

* The Philippines' Mining Industry Coordinating Council delayed the review of 26 mines in the country that were ordered to close or were suspended in 2017, and the Department of Finance said the final outcome of the review is now set to take six months instead of three, Bloomberg News reported, citing Environment Undersecretary Jonas Leones. The delay is creating uncertainty over the country's nickel ore supplies. The Philippines exported 29.1 million tonnes of nickel ore to China in 2017, down from 30.6 million tonnes in 2016, according to Chinese customs data.

* Chemaf Sarl, a cobalt miner in the Democratic Republic of the Congo, is building a processing plant at its Mutoshi copper-cobalt mine that will open in September 2019 and will have the capacity to produce 20,000 tonnes of cobalt per annum, Bloomberg News reported, citing Chairperson Shiraz Virji. This could place the company in second place in terms of cobalt output, behind Glencore PLC, after adding in output from Chemaf's 5,000-tpa Etoile mine.

* Zinc producer PJSC Chelyabinsk Zinc Plant produced 183,002 tonnes of salable SHG zinc and zinc-based alloys in 2017, a 4.7% year over year increase.

* Vedanta Ltd. will close smelting operations at the Tuticorin copper project in India for approximately 15 days as part of a regular maintenance program, which had been slated to start in April. Refining and copper rod manufacturing operations will continue as usual.

* Zinc of Ireland NL decided not to extend its option to acquire the Galmoy lead-zinc processing plant, which is in storage in Darwin, Australia. The company made the decision following a review of the processing requirements for the Kildare zinc project in Ireland.

* Meteoric Resources NL signed a binding agreement to acquire the Gillies cobalt project in Ontario in a cash and shares deal.

* Antofagasta PLC averted a strike at its Los Pelambres copper mine in Chile and about 82% of the unionized workers approved a new labor contract, Reuters reported. The new contract includes an average salary increase of 3% and a signing bonus of US$30,500 per person.

* Workers ended a partial strike at First Quantum Minerals Ltd.'s Cobre Panama copper project in Panama and will return to work over the coming weeks.

* Atalaya Mining PLC produced 37,164 tonnes of copper from its Proyecto de Rio Tinto in 2017, the project's first full year of commercial production, a 42% increase over 2016 production. This year, the company expects to produce contained copper of between 37,000 and 40,000 tonnes. Atalaya is expanding the project capacity to 50,000 to 55,000 tonnes per year at a capital cost of €80.4 million, with commissioning scheduled for the second half of 2019.

PRECIOUS METALS

* Premier Gold Mines Ltd. expects to produce 85,000 to 95,000 ounces of gold this year at cash operating costs of US$690/oz to US$740/oz and all-in sustaining costs of US$800/oz per ounce to US$850/oz of gold. Production in 2017 totaled 139,658 ounces of gold and 357,901 ounces of silver.

* Newcrest Mining Ltd. is resuming mining operations at the Cadia gold-copper mine in New South Wales, Australia, effective immediately.

* Lincoln Mining Corp. terminated an option deal with Ausgold Resources Pty. Ltd. over the Oro Cruz gold project in California after the latter failed to satisfy its obligations.

* Petropavlovsk PLC executed a sales agreement with Gazprombank for sales of 96,000 ounces of gold and for advance payment for up to 12 months. The payment will be settled using proceeds at the prevailing gold price at the date of the shipment.

* Hecla Mining Co. is suing Montana environmental regulators for labeling the company and its top executive "bad actors," Mining.com reported. Montana's Department of Environmental Quality recently said the company will need to return over US$30 million to resolve a bill for pollution cleanup.

* Anglo American PLC and Lumina Gold Corp. signed a letter of intent to negotiate a potential US$57 million joint venture covering the latter's Pegasus A and B concessions in Ecuador. The companies aim to seal a definitive agreement in the next five months.

* Kinross Gold Corp. agreed to pay the SEC about US$950,000 to settle civil charges in connection with a probe over allegations of improper payments made to government officials and internal control deficiencies at the company's West African mining operations. Meanwhile, the SEC said Kinross did little to verify that payments to politically connected consultants and vendors in Ghana and Mauritania were being used for their stated purpose, Reuters reported.

* Lundin Gold Inc. completed a previously announced US$400 million financing, with the funds to be used for the development of its Fruta del Norte gold project in Ecuador.

BULK COMMODITIES

* Chinese winter production cuts could be extended for the rest of the year as the county's Ministry of Ecology and Environment urged 28 northern cities to close factories amid heavy smog in the region, Reuters wrote, citing a Shanghai Securities News report.

* Chemicals and raw materials expert Red Adams, founder of database portal Artikol, believes that the environmental drive such as that surging in China could supercharge the titanium dioxide market so it could one day challenge the much bigger aluminum market.

* Yanzhou Coal Mining Co. Ltd. quadrupled its final dividend for 2017 to 48 Chinese fen per share, from 12 fen per share in 2016, due to a 346% increase in profit for the year. Net income attributable to shareholders in the period jumped to 7.36 billion yuan, or 1.50 yuan per share, from 1.65 billion yuan, or 34 fen per share, in 2016.

* Tronox Ltd. intends to offer senior notes due 2026, with proceeds earmarked for redeeming about US$584 million of 7.50% senior notes due 2022.

* IRC Ltd. booked a net profit of US$113.3 million for 2017, swinging from a year-ago loss of US$18.2 million as revenue jumped 5x on an annualized basis to US$109.3 million. The results were attributed to a US$129.6 million impairment reversal and higher selling prices. During the year, the company's K&S mine produced over 1.5 million tonnes of iron ore concentrate. The mine is operating at about 70% capacity and is on track to reach full capacity in 2018. "I am very glad that K&S is finally delivering the value that has been long awaited," Chairman Jay Hambro said.

* Norsk Hydro ASA is holding talks with Pará state's environmental authorities to resume normal operations at its Alunorte alumina refinery in Brazil.

* Gensource Potash Corp. entered into a second nonbinding memorandum of understanding with a North American agriculture industry player for a 10-year off-take deal for 250,000 tonnes per year of potash production from its facilities planned in Saskatchewan. The parties will look to sign a definitive deal by the end of April.

* Brazilian steelmaker Cia. Siderúrgica Nacional posted a profit in the fourth quarter of 2017 of 377.4 million Brazilian reais, swinging from the year-ago net loss of 55.7 million reais. Net revenue in the quarter increased 10% year over year to about 5 billion reais due to higher prices for steel products and iron ore.

* Fortescue Metals Group Ltd. amended its iron ore price guidance to about 65% of the average benchmark Platts 62 CFR index for the fiscal year ending June 30 due to a slowdown in Chinese construction activity and the potential impact of global trade tensions. The first fiscal half revenue realization was 68% of the average Platts 62 CFR index.

* Separately, Fortescue intends to redeem US$1.55 billion of its 9.750% senior secured notes due 2022.

* Maxtech Ventures Inc. signed a letter of interest to form a joint venture with Andorra Participacoes e Emprendimentos Ltda. to develop a 40,000-hectare property prospective for manganese in Brazil's Para state.

* JSW Steel Ltd. Chairman and Managing Director Sajjan Jindal said the company was not allowed to submit a bid for Essar Steel India Ltd. as the lenders were not up for giving "a new entrant a chance," Live Mint reported. Essar Steel reopened the bidding process but limited it to the six companies that had already filed expressions of interest.

* JSW Steel signed a memorandum of understanding to invest up to US$500 million in expanding operations in Texas. The company's Texas operations supply the energy, petrochemicals, defense and other heavy-equipment sectors in the U.S.

* Separately, ArcelorMittal intends to challenge a decision by creditors to reject its bid for debt-laden Essar Steel in court, the Financial Times reported. VTB Capital-led Numetal, which was also ruled ineligible to bid for Essar, plans to appeal the decision too, a person close to the company said.

* Kommersant reported that PAO Severstal, which supplied about 340,000 tonnes of steel to the U.S. in 2017 for US$157 million, is trying to challenge the country's import duties on steel, effective since March 23. The company filed a lawsuit against the U.S. government in the U.S. Court of International Trade, demanding to withdraw its deliveries from duties and citing "irreparable damage" to its trading company, Severstal Export Miami Corp. Meanwhile, PJSC Novolipetsk Steel applied for exemption from the U.S. import tariff on steel slabs.

* BHP Billiton awarded CIMIC Group Ltd.-owned Thiess a A$185 million contract to provide additional mining services for the mining major's Mount Arthur coal operation in New South Wales, Australian Mining reported.

* Coal India Ltd. is expected to supply an estimated 27 million tonnes per annum to thermal power companies via long-term supply agreements secured through bidding in September 2017, Mining Weekly reported.

SPECIALTY

* Kazakhstan Potash Corp. Ltd. is expanding its exploration portfolio to include lithium-tantalum-tin prospects in addition to its existing potash exploration licenses on the back of growing global demand for lithium, particularly in China.

* A worker died after falling onto a conveyor belt at De Beers SA's Venetia diamond mine in South Africa, African News Agency reported, citing a police statement, which added that the incident is being treated as "a case of culpable homicide."

* Force Commodities Ltd. entered into a joint venture on the Kanuka lithium project in the Democratic Republic of the Congo.

* Sunrise Resources PLC received requests from potential customers to supply raw perlite for commercial-scale expansion trials. The company is now planning to excavate and process bulk samples from its CS pozzolan-perlite project in Nevada.

INDUSTRY NEWS

* The announcement of further tariffs and an escalation of protectionist sentiment from the U.S. the week of March 23 continued to put pressure on metals prices. While numerous trading partners managed to secure an exemption from proposed U.S. tariffs on steel and aluminum imports, concerns over tit-for-tat measures by China and the potential implications for the wider global economy weighed heavily on investor sentiment.

* Russia's six leading listed metal companies are forecasting higher spending this year, with combined CapEx estimated at US$5.68 billion, reflecting a 52% increase over their 2015 total, the Financial Times reported.

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