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Samarco may offer creditors chance to become shareholders

TOP NEWS

Samarco may offer creditors chance to become shareholders

Samarco Mineração SA could offer its creditors the chance to become shareholders to reverse the financial crisis that forced it to halt production following the Samarco iron ore tailings spill in Brazil in November 2015, sources told Valor Econômico. The company's management and equal shareholders Vale SA and BHP Billiton Group are reportedly discussing with banks and bondholders alternatives to repay its debt, which amounts to US$2 billion. A two-year grace period and a debt cut would be among the proposed solutions.

Echo, Metaliko in A$38.9M merger

Echo Resources Ltd. and Metaliko Resources Ltd. agreed to merge in a A$38.9 million deal, in which Echo will acquire all of the issued shares of Metaliko by way of an off-market takeover offer of one new Echo share for every 2.5 Metaliko shares held.

Tata Steel receives £100M bid for specialty steel, pipe divisions

Metals trader Liberty House Group put forward a bid of almost £100 million for Tata Steel Ltd.'s specialty steel and pipe businesses, Reuters reported, citing an industry source.

BASE METALS

* The Brisbane Supreme Court dismissed Clive Palmer's bid against the liquidators of Queensland Nickel Inc. for not returning the assets of the failed company, saying that accepting the case will be a "startling affront to justice," The Sydney Morning Herald with the Australian Associated Press reported.

* The Santiago Court of Appeals restricted Cochilco, the Chilean Copper Commission, from releasing any information regarding Codelco's investment projects in Ecuador, which include the Enami EP and exploration joint venture Llurimagua. The ruling states that this information is confidential and that its public disclosure would violate the interests of the Chilean State, La Tercera reported.

* Production at OZ Minerals Ltd.'s Prominent Hill copper-gold mine has been suspended due to electricity supply disruptions following severe storms that continue in South Australia.

* KAZ Minerals PLC started commissioning works at the Bozshakol plant in Kazakhstan. The clay plant has an annual processing capacity of 5 million tonnes and is expected to start production of salable copper concentrate this year.

* BHP Billiton restarted operations at its Olympic Dam copper-uranium mine after a temporary shutdown following a power outage in South Australia, Reuters reported, citing an emailed statement from the company. The company is running the operations on backup power generators.

* Lundin Mining Corp. further extended the period to exercise its right of first offer for Freeport-McMoRan Inc.'s indirect stake in the Tenke Fungurume copper-cobalt mine in the Democratic Republic of the Congo, until Oct. 20. According to Mining.com, Lundin's previous extension could indicate a bigger deal in the making involving China Molybdenum Co. Ltd. and the DRC's state-owned Gecamines SARL, which has a 20% direct ownership in the project.

* Separately, Freeport CFO Kathleen Quirk indicated that the company will proceed with the US$2 billion sale of its deepwater Gulf of Mexico assets to Anadarko Petroleum Corp. without bondholders' approval, as some of them are demanding more money and changes to existing lender agreements.

* The Indian government will sell a 7% stake in state-run miner Hindustan Copper Ltd. through a two-day offer for sale beginning Sept. 29, Mint reported. The government set a floor price of 62 Indian rupees per share, a 5.12% discount to the Sept. 28 closing price.

PRECIOUS METALS

* Banks agreed to restructure Petropavlovsk PLC's US$530 million debt, extending its maturity until 2022. The deal is to be approved in October, the same deadline set for the company's purchase of gold miner Amur Zoloto LLC.

* Jaxon Minerals Inc. signed a letter of intent to acquire CJL Enterprises Ltd.'s Price Creek silver-zinc-lead-gold property in British Columbia.

* Alt Resources Ltd. inked a binding term sheet deal to fully acquire the Chameleon gold deposit in Western Australia from Minotaur Exploration Ltd. subsidiary Minotaur Gold Solutions Ltd.

* A Chilean court ruled that former President Ricardo Lagos must testify in an ongoing civil land dispute involving the property of Barrick Gold Corp.'s suspended Pascua Lama gold-silver-copper project on the border of Chile and Argentina, Diario Financiero reported.

* According to San Juan province Mining Minister Alberto Hensel, Barrick Gold's Veladero mine in Argentina, which was recently suspended by the provincial government due to a cyanide spill, could reopen in the coming days if a technical report confirms repairs, Reuters reported.

* Kingsgate Consolidated Ltd.'s board recommended shareholders take no action in relation to Northern Gulf Petroleum International Pte. Ltd.'s offer for the acquisition of a controlling stake in the company, dubbing the offer as "opportunistic" and "proportional." The Singaporean firm on Sept. 16 forwarded an offer of 4.2 Australian cents per share to Kingsgate shareholders for 50.1% of the shares held.

* Armadale Capital Plc entered into a binding heads of agreement with African Mining Services to form a joint venture to develop and operate the Mpokoto gold project in the Democratic Republic of Congo's Katanga province.

BULK COMMODITIES

* After Samarco Mineração missed an interest payment due Sept. 26, S&P Global Ratings downgraded the company's corporate credit ratings to D from CCC on the global scale and from brCCC on the Brazilian national scale. S&P Global Ratings anticipates that Samarco Mineração likely to miss paying the interest on its US$500 million bond during the 30-day remedy period and fail to make payments on other financial obligations.

* The Public Prosecutor's Office of Brazil's Minas Gerais state and the Public Ministry of Labor filed a claim against Samarco Mineração and its parent companies, Vale SA and BHP Billiton, for the re-employment of workers who were laid off due to the shutdown of operations following the Samarco iron ore mine tailings spill in November 2015, Notícias de Mineração reported.

* China's state-owned Sinosteel Corp. gained approval from the State Council to restructure its debt. The 21st Century Business Herald, citing separate anonymous sources, estimated that of Sinosteel's total debts worth about 60 billion Chinese yuan, about 27 billion yuan will be replaced by multiple tranches of a six-year convertible bond.

* Anglo American Plc has come under fire from unions over its plans to lay off about 90 workers at its Capcoal operation in Queensland, Australia, following two months of industrial action. The Construction, Forestry, Mining and Energy Union labeled the move a "hostile ambush."

* Compass Minerals International Inc. issued a new US$450 million senior secured term loan, which matures July 1, 2021, and carries an interest rate of LIBOR plus 2%. Proceeds are earmarked to purchase the remaining 65% stake in Produquímica Indústria e Comércio SA and to retire a portion of the debt it expects to assume from Produquímica at closing.

* United Co. RUSAL Plc secured 300 million rubles, out of a total of 5 billion rubles, for the start of production of anodes at the 104,000-tonne-per-annum Volgograd aluminum plant, which will be launched in the second quarter of 2018, Vedomosti reported.

* The administrator of Arrium Ltd. warned that South Australia's statewide power outage will cause "critical" damage at the Whyalla steelworks if power is not restored soon, The Australian wrote.

* Despite several reports suggesting that Usinas Siderúrgicas de Minas Gerais SA controlling shareholders Techint Group and Nippon Steel & Sumitomo Metal Corp. are looking to cut ties and split the assets, no formal talks are currently under way to end the partnership, Bloomberg wrote, citing sources. Sources added that even if the companies decide to pursue any such action, the split would take as long as two years to complete.

* U.S. aluminum industry group Aluminum Association is seeking a "meaningful dialogue" with Chinese authorities to end incentives and subsidies that are contributing to the global oversupply and squeezing U.S. producers out of the market, Bloomberg wrote.

* Vale expects the balance in supply and demand in the iron ore market to continue, with Brazil adding about 28 million tonnes of iron ore to the seaborne market in 2017, Reuters reported, citing CEO Murilo Ferreira.

* ArcelorMittal unit ArcelorMittal South Africa Ltd. made a deal, worth about 2.2 billion South African rand, to give a 17% stake in the company to its partner Likamva Resources Pty. Ltd., a specially formed, black-owned company.

* The Australian Fair Work Commission ordered mining major BHP Billiton to reinstate a worker who was sacked at the Saraji coal mine in Queensland over an expletive-laden exchange with a colleague, The Australian reported.

* As India aims to boost domestic sales, the government raised the cap on the purchase of coal by small and medium-sized companies to 10,000 tonnes per annum, from 4,200 tonnes set almost nine years ago, Bloomberg reported, citing a notice from the coal ministry.

SPECIALTY

* Codelco CEO Nelson Pizarro said the company will begin receiving bid offers between February and March 2017 from potential investors to develop its vast lithium reserves, which would be then reviewed by the board in April. The plan is for the company to sign the contract with the winning bidder by June, Diario Financiero reported.

* Ocean Minerals LLC secured the exclusive rights to explore the seabed in the exclusive economic zone surrounding the Cook Islands in the hopes of uncovering rare earth elements and scandium.

* Data compiled by Bloomberg showed that the prices of the smallest diamonds decreased by 15% this year, a reversal of the average 7% increase for all stones yet to be cut and polished.

* Low prices continue to weigh down on Lynas Corp. Ltd., with the rare earth miner warning that it might be unable to pay back debts on the current schedule, The Australian reported.

* Chinese firm Sichuan Tianqi Lithium Industries Inc. is vying for the controlling stake in Chile's Sociedad Quimica y Minera de Chile SA in a bid to expand its presence in the lithium industry, the Financial Times reported. Earlier this week, Tianqi purchased a 2% interest in the Chilean firm and is now seeking to purchase a separate 23% stake controlled by a vehicle of Julio Ponce Lerou.

* AREVA SA is facing legal action from Finnish utility Teollisuuden Voima as the latter tries to avoid further delays at its Olkiluoto 3 nuclear reactor in Finland, Reuters reported, citing a company statement. The utility firm wants assurances that AREVA's restructuring will not result in further delays and that the plant would be ready to begin production in 2018 as scheduled.

* Resolve Ventures Inc., Nevada Sunrise Gold Corp. and Advantage Lithium Corp. reached a new deal to allow Advantage to earn up to a 50% working interest in the early-stage Neptune lithium property in Nevada.

INDUSTRY NEWS

* The London Metal Exchange finalized its warehouse reform program, with plans to introduce caps on maximum rates charged by LME-registered warehouses effective Dec. 28. The LME said Sept. 28 that it will introduce an initial schedule of maximum rates for warehouse rents and free-on-truck charges, and the rates will be frozen for five years, after which the charges will be updated annually.

* South Australia's Mineral Resources and Energy Minister Tom Koutsantonis urged the community and stakeholders to provide their input for the comprehensive review of mining laws in the state, adding that the Leading Practice Review of Mining Acts will enable communities to play a key role in shaping improvements to the state's framework of mining laws, Mining Weekly reported.

* According to Mexico's economy ministry data, foreign direct investment in Mexico's metallic mining industry reached US$491 million in the first half of the year compared to negative US$119 million in the corresponding year-ago period, Business News Americas reported.

S&P Global Ratings and SNL Metals and Mining, an offering of S&P Global Market Intelligence, are both owned by S&P Global Inc.

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