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Samarco postpones debt restructuring talks; SQM delays Atacama expansion

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Samarco postpones debt restructuring talks; SQM delays Atacama expansion

TOP NEWS

Samarco holds off debt restructuring on uncertainty over liabilities

Samarco Mineração SA, a joint venture between Vale SA and BHP Group, is postponing talks to restructure debt of US$3.8 billion to at least November, Bloomberg News reported, citing three unnamed sources. The creditors agreed to the delay amid uncertainty around liabilities and fines the joint venture may be subject to. Two of the sources said the consortium will not get a clear idea on the liabilities until the end of October, with talks possibly resuming earlier if circumstances change.

SQM delays capacity expansion at Salar de Atacama lithium operations

Sociedad Quimica y Minera de Chile SA pushed back a planned expansion of its Salar de Atacama lithium operations in Chile until late-2021 from 2020, Reuters reported, citing CEO Ricardo Ramos. The two-phase, US$450 million expansion was postponed amid weak lithium prices. Ramos, however, said in an earnings call that the quickly-evolving requirements of the battery industry were the reason behind the delay, and "not related to the market or demand."

Freeport-McMoRan agrees to partial sale of cobalt business for US$150M

Freeport-McMoRan Inc. agreed to sell its Kokkola cobalt refinery in Finland and related cobalt cathode precursor business to Umicore SA for about US$150 million, plus working capital. Umicore will acquire the refinery and cathode precursor business, which represents about 60% of the refinery's historical revenues, and Freeport will retain the remaining cobalt business. The transaction is expected to close by year-end.

BASE METALS

* Codelco denied a Reuters report about an alleged 40% drop in output over two years from its Chuquicamata copper mine in Chile due to a US$4.88 billion project to convert the open-cast mine into an underground operation. The Chilean state miner said that it would maintain production levels given that its Chuquicamata underground and five other structural projects will jointly produce about 1.7 million tonnes of fine copper in the next 10 years at least.

* Yue Da International Holdings Ltd. plans to divest its stake in the Baoshan Feilong lead-zinc-copper mine in China through the disposal of its Yuelong Ltd. unit. The decision to sell was prompted by rising costs due to new regulations related to mine maintenance.

* Among top 20 copper producers, Freeport-McMoRan had the largest year-over-year decrease in mined copper output, producing 278,052 tonnes in the March quarter, according to the Metals and Mining Research team at S&P Global Market Intelligence. The decline was mainly due to the ongoing underground transition of the Grasberg mine in Indonesia, with production falling 88,450 tonnes year over year in the quarter.

* Jervois Mining Ltd. said a preliminary economic assessment for its Nico Young nickel-cobalt project in New South Wales, Australia, outlined an attractive opportunity for development when commodity prices improve. The project will be funded by third parties up to construction and Jervois will sell down its current 100% equity ownership.

* Zambian President Edgar Lungu turned down Vedanta Resources PLC's request for a meeting over the state's planned seizure of copper assets of subsidiary Konkola Copper Mines PLC, Bloomberg News reported. The country's mines minister, Richard Musukwa, insisted that the move is not nationalization and accused Vedanta of violating its license conditions. The Zambian government also ordered a regular audit of all mines to avoid any repeat of the issues at Konkola, Reuters reported.

PRECIOUS METALS

* B2Gold Corp. is in talks to purchase the inactive Shamva gold mine in Zimbabwe from South Africa's Metallon Corp. Ltd. if it secures an exemption from a law requiring miners to sell output to the country's central bank, Bloomberg News reported, citing unnamed sources. B2Gold will reportedly pay one third of the mine's book value, which was estimated seven years ago at about US$167 million, and spend a further US$150 million to US$200 million to develop the mine.

* Millennium Minerals Ltd. re-optimized the mine plan for its Nullagine gold mine in Western Australia after a review identified two key factors for a production shortfall in the March quarter compared to guidance. They consisted of start-up delays for stoping activities and higher than planned dilution at Bartons Underground, and a six-week delay in construction and commissioning of the stage one sulfide expansion project.

* Bavura Holdings will sign an agreement to explore for and mine platinum on Zimbabwe's Great Dyke, a metal-bearing geological feature extending about 500 kilometers, as the government works to exploit the country's platinum reserves and attract mining investment, Reuters reported, citing the information ministry.

* The drop in Sibanye Gold Ltd.'s stock price since it announced its bid for Lonmin PLC may affect Public Investment Corp. (SOC) Ltd.'s vote on a merger, a source told Bloomberg News. The South African funds manager has a 30% stake in Lonmin, enough to block the proposed deal, the report said.

* The Supreme Court of British Columbia appointed The Bowra Group Inc. as receiver of bankrupt Sutter Gold Mining Inc.'s asset sale.

* McEwen Mining Inc. achieved commercial production at its Gold Bar mine in Nevada, outlining production guidance of 50,000 gold ounces for the year at all-in sustaining costs of US$975 per ounce.

BULK COMMODITIES

* Queensland's Premier Annastacia Palaszczuk, who declared she was "fed up" with the delays in making a decision on Adani Enterprises Ltd.'s highly controversial Carmichael coal mine in the region, set deadlines to fast track the project, The Australian reported. Palaszczuk declared May 31 as the deadline for the decision on the mine's black-throated finch protection management plan and June 13 for a decision on the company's groundwater strategy.

* Brazilian steelmaker Usinas Siderúrgicas de Minas Gerais SA will use trucks to supply iron ore and pellets to its Ipatinga plant in Brazil's Minas Gerais state as well as transport steel output after Vale's decision to temporarily suspend its iron ore freight on part of the Vitoria-Minas railroad as a precautionary measure on threat of a landslide at its Gongo Soco mine. The Vitoria-Minas railroad is one of two main railways connecting steel mills in Minas Gerais with local ports.

* The Australian Manufacturing Workers' Union, or AMWU, accused Rio Tinto of compromising workers' safety at its Gove bauxite operations in Australia's Northern Territory, amid a 35% output ramp-up over the past two years, ABC News reported.

* Canada-based potassium sulfate producer SOPerior Fertilizer Corp. received an expression of interest from a North American firm to operate as the company's exclusive marketing arm in North America for the calcined alumina product from its Blawn Mountain potash project in Utah.

* Sanjeev Gupta's Liberty House Ltd, Chinese steel group Hebei Iron & Steel Group Co. Ltd, Ltd. and U.K.-based private equity group Endless LLP may bid for the embattled British Steel Corp. Ltd., Financial Times reported. The company needs a buyer within two to three months as it needs £400 million to £500 million of working capital and £75 million of cash injection, an unnamed source told Reuters in a same-day report.

* Strategic Minerals PLC unit Southern Minerals Group expects to receive US$4.1 million within two weeks after a major client agreed to pay arrears of US$375,000 and top up an existing deposit by US$3.7 million. The client asked the subsidiary to refrain from progressing legal action for two weeks, and said it will negotiate the balance of the contract during in June.

* Mechel PAO's first-quarter profit came in 244% higher than 2018, when a slump in sales damaged earnings, despite declines in production across the board. Profit hit 11.34 billion Russian rubles as the ruble strengthened against the dollar and euro, resulting in an exchange gain of 11.98 billion rubles. Coal output fell 29% year over year to 3.5 million tonnes, and steel production slipped below 1 Mt.

* Despite dropping the mining lease application for its China Stone coal project in Queensland, Australia, Meijin Energy Co., Ltd unit MacMines Austasia Pty Ltd committed to develop the A$6.7 billion project in the short term, indicating that its development would likely follow Adani's Carmichael mine, The Australian Financial Review reported.

* Westmoreland Resource Partners LP requested expedited approval from the bankruptcy court to sell its Kemmerer coal mine in Wyoming.

* Bushveld Minerals Ltd. established a dividend policy based on free cash flow for future payouts, which will also be reviewed depending on business conditions and capital allocation priorities. The company did not recommend a dividend for 2018.

* The Singareni Collieries Co. Ltd kicked off development of the Kalyani Khani-6 Incline block in Telangana, India, into a new underground mine, Mining Weekly wrote. The project is expected to help the company reach its target of producing 70 million tonnes of coal in 2020.

* Brazilian steel demand in April slipped 1.5% year on year to 1.67 million tonnes from 1.7 Mt in the same period in 2018 despite a recovery in the long-rolled market, Fastmarkets MB reported, citing national steel association Instituto Aço Brasil.

INDUSTRY NEWS

* The Minerals Council of Australia appointed Helen Coonan as its new chair, who will takeover when Vanessa Guthrie steps down following its June 18 board meeting.

* European Metal Recycling Ltd. will sell parts of its Metal & Waste Recycling Ltd unit to Recycling Lives Ltd. after an antitrust inquiry, Fastmarkets MB wrote. As part of the deal, European Metal will retain Metal & Waste's two sites in London.

* Paul Jourdan, former CEO of Mining Equipment Manufacturers of South Africa, urged mining companies to stop sending workers down dangerous deep-level mines and instead use remote machinery to mine at depth, Mining Weekly reported.

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