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Brazil court endorses Samarco settlement; Rio Tinto OKs US$5.3B Oyu Tolgoi expansion; ArcelorMittal narrows Q1 loss

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020


Brazil court endorses Samarco settlement; Rio Tinto OKs US$5.3B Oyu Tolgoi expansion; ArcelorMittal narrows Q1 loss

TOP NEWS

Brazil court endorses BHP Billiton, Vale Samarco settlement

Brazil'sFederal Court of Appeal ratifiedthe 15-year agreement entered into by BHPBilliton Group- and ValeSA-owned joint venture SamarcoMineração SA for the rehabilitation of the damage caused by the dam disaster.

Rio Tinto, Mongolia green-light US$5.3 billion Oyu Tolgoi copper mineexpansion

, Turquoise Hill Resources Ltd., and the government of Mongoliahave approved the nextdevelopment stage for the OyuTolgoi copper-gold mine in Mongolia. The development of the undergroundmine will start in mid-2016 following the approval of a US$5.3 billion investmentby the partners and the recent granting of all necessary permits. First productionis expected in 2020, and full ramp up to production of over 500,000 tonnes of copperper year is expected in 2027.

ArcelorMittal narrows Q1 loss YOY

ArcelorMittalnarrowed its first-quarter net lossto US$416 million from US$728 million a year ago. On a yearly basis, EBITDA fellto US$927 million from US$1.38 billion while sales dropped to US$13.40 billion fromUS$17.12 billion a year earlier, reflecting lower steel prices. Crude steel productionreached 23.2 million tonnes, compared to 23.7 million tonnes recorded a year earlier,with shipments dipping to 21.5 million tonnes from 21.6 million tonnes. For 2016,ArcelorMittal expects EBITDA of over US$4.5 billion and plans to become free cashflow positive.

DIVERSIFIED

* Brazil'sFederal Court of Appeal ratifiedthe 15-year agreement entered into by BHPBilliton Group- and ValeSA-owned joint venture SamarcoMineração SA for the rehabilitation of the damage caused by the dam disaster.

* Prosecutorsin Minas Gerais state announced at a press conference they had filed a lawsuit against14 former and current executives of SamarcoMineração SA. The prosecution claims the executives knowingly withheldkey information about the Mariana tailings dam collapse, as well as about two additionalmudslides that occurred in January this year, daily O Globo reported.

* Thesale of Vale's 40% share in MineraçãoRio do Norte S.A., or MRN, to NorskHydro ASA, which owns 5% of the company, is not materializing, despitethe memorandum of understanding signed in 2015. Vale CEO Murilo Ferreira reportedlysaid that it has not come to an agreement with the "entity that is currentlya partner at MRN," without explicitly mentioning Hydro, so the Brazilian minerhas decided to "begin discussions with a third party," Valor Econômico reported.

* RioTinto will see its near-term debttrimmed by US$1.5 billion after purchasing US$141 million of debt underits Dutch auction offer, and US$1.36 billion under the any and all offer, whichended late April. The Dutch auction offer was oversubscribed May 4 and the companywill not accept more of these securities beyond US$141 million.

BASE METALS

* , Turquoise Hill Resources Ltd., and the government of Mongoliahave approved the nextdevelopment stage for the OyuTolgoi copper-gold mine in Mongolia. The development of the undergroundmine will start in mid-2016 following the approval of a US$5.3 billion investmentby the partners and the recent granting of all necessary permits. First productionis expected in 2020, and full ramp up to production of over 500,000 tonnes of copperper year is expected in 2027.

* Anoptimization of OZ Minerals Ltd.'spre-feasibility study on the Carrapateenacopper project in South Australia, envisions a larger 4 million-tonne-per-annumoperation. The assessment improved the net present value estimate to A$750 millionand internal rate of return to 23%. Preproduction CapEx is pegged at A$975 millionwith expected payback of six years. The project will have annual production of about67,000 tonnes of copper and 76,000 ounces of gold in first three years.

* OZ Minerals signeda nonbinding memorandum of understanding with Arrium Ltd. to share its port and other facilities at Whyallain South Australia, to ship concentrate from OZ's planned A$150 million copper processingplant in the area, ABC reported. This comes after Arrium's Managing Director andCEO Andrew Roberts and senior executive Naomi James were made redundant.

* RioTinto-controlled Turquoise Hill recorded first-quarter net income attributable to owners of US$118.9 million, upfrom net income of US$96.2 million posted a year ago. Revenue, meanwhile, increased18.9% on a quarterly basis to US$422.7 million, which reflects higher gold pricespartially offset by lower volumes of copper-gold concentrate sales.

* , whichis selling its Kevitsamine for US$712 million, is nearly out of its liquidity crisis, Financial Post reported,citing company executives. President Clive Newall said, "We're in the middleof a process, but we've already done the hard part."

* unit AntofagastaMinerals SA's Los Pelambrescopper mine will invest US$20 million to definitely close down its Cerro Amarillotailings deposit, which, due to a limits modification in 2008, was mapped in Argentineterritory inside Glencore Plc'sEl Pachon projectin San Juan province, triggering a legal dispute between both companies. The agreementwas signed last week by authorities of San Juan. However, the dispute between Glencoreand Los Pelambres will continue in parallel, daily Diario El Día reported.

* A Chileanlaw which mandates state miner Codelcoto transfer 10% of its export sales to the country's armed forces, is "absurd"and provides grounds for "dishonesty," Codelco Chairman Oscar Landerretchesaid in an interviewwith TV network TVN. The Chilean government had announced the full disclosure ofthe law this week; however, the disclosure was suspended at the last minute.

* Thompson CreekMetals Co. Inc. is planning to spend US$47 million to install a permanentsecondary crushing circuit at its MountMilligan copper project in British Columbia with all construction activitiesprogressing on schedule and on budget, MiningWeekly reported,citing the company's President and CEO Jacques Perron. The company will achieveaverage mill throughput of about 62,500 tonnes per day following the installation,which is expected to be commissioned in the second half of 2016.

* TheZambia Environmental Management Agency has approved BMR Group Plc's environmental social impact assessment forits tailings retreatment process and the construction of its planned pilot and maintreatment plants in Kabwe.

PRECIOUS METALS

* 's Ghanaianunit has fileda request for arbitration with the International Centre for Settlement of InvestmentDisputes against Ghana, arguing that the country has failed to protect its gold operation fromillegal miners.

* is more platinum assetsfollowing its acquisition of such properties from Anglo American Platinum Ltd. and Aquarius Platinum Ltd. in 2015, Reuters reported. The companyis also seeking gold companies abroad and could invest in coal.

* 's first-quarternet earnings increased17% year over year to C$6.0 million, or 3 Canadian cents per share. The companyproduced 20,672 ounces of gold, the second-highest quarterly production in its history.

* Sandstorm GoldLtd. reported net incomeof US$13.2 million for the first quarter of 2016, compared to US$800,000 recordeda year earlier while revenue fell to US$13.4 million from US$15.3 million. For 2016,the company is expecting its gold equivalent production to range between 40,000ounces to 50,000 ounces.

* Tirex ResourcesLtd. secured an option toacquire the Romovista gold project in Kosovo.

* S2 ResourcesLtd. has reported a maidenmineral resource estimate of 84,000 ounces at its Nanook prospect withinthe Polar Bear goldproject in Western Australia, contained within 2.2 million tonnes of ore grading1.2 g/t of gold. The calculation was based on 821 aircore drill holes and 12 reversecirculation drill holes.

BULK COMMODITIES

* ArcelorMittalnarrowed its first-quarter net lossto US$416 million from US$728 million a year ago. On a yearly basis, EBITDA fellto US$927 million from US$1.38 billion while sales dropped to US$13.40 billion fromUS$17.12 billion a year earlier, reflecting lower steel prices. Crude steel productionreached 23.2 million tonnes, compared to 23.7 million tonnes recorded a year earlier,with shipments dipping to 21.5 million tonnes from 21.6 million tonnes. For 2016,ArcelorMittal expects EBITDA of over US$4.5 billion and plans to become free cashflow positive.

* OJSC MagnitogorskIron & Steel Works, or MMK, reported a first-quarter profit of US$157million, down 19.9% ona yearly basis from US$196 million in the same period a year earlier. EBITDA slid38.9% to US$287 million while revenue fell by 30.5% to US$1.05 billion, reflectinglower sale prices and volume in the reporting period. The company's net debt fellto US$929 million at the end of March and its ratio of net debt to EBITDA was at0.6. MMK plans to review its dividend policy to pay at least 30% of annual freecash flow to shareholders and make the payments on a semi-annual basis.The company also sold its holdings in FortescueMetals Group Ltd. for US$68 million.

* ITOCHU Corp.'sfiscal 2016 net profit attributable to shareholders for its metals and mineralssegment dropped ¥35.5billion to ¥11.6 billion, on lower gross trading profit. Gross trading profit forthe metals segment was down by ¥34.5 billion to ¥32.5 billion due to lower ironore and coal prices, which was partially offset by an increase in iron ore sales,reduction in iron ore costs, and improvement in foreign currency translation iniron ore and coal companies. Revenue for the company's metals and minerals segmentdecreased by ¥33.4 billion to ¥220.1 billion. ITOCHU announced a total dividendof ¥50 per share for the year, compared to ¥46 for fiscal 2015.

* Meanwhile, Reuters wrote thatITOCHU is planning to acquire "selective" natural resource assets in collaborationwith China's Citic Group, to benefit from a commodity downturn while also signaledto invest in assets beyond iron ore and coal. "We are standing by to make purchasesof resource assets," ITOCHU President and CEO Masahiro Okafuji said.

* India's steel imports in April fell 15.5% year over year to654,000 tonnes thanks to government-imposed tariffs on shipmentsfrom China and other countries, Bloomberg News reported, citing provisionaldata from the Steel Ministry.

* plans to increase the proportionof steel it exports to 30% this year to counter a slump in domestic demand, dailyValor Econômico reported.

* has completedthe recently announced offeringof US$500 million worth of 6.5% senior unsecured notes due May 15, 2021.

* Kommersant reported that VEB is actively searchingbuyers for the mining and metallurgical assets controlled by the bank. Accordingto sources, these include assets of Industrial Union of Donbass and Russian coalcompany Sibuglemet Holding. EvrazPlc has formally controlled Sibuglemet since the end of 2015.

* ManagingDirector Ravi Uppal said the company is in discussions to off-load certain noncore assets to raise about 30 billionIndian rupees. Jindal Steel's debt pile has reached 460 billion rupees, and thecompany hopes that such a move would help it trim its liabilities by over 35% tounder 300 billion rupees in the next four years, the official said.

* is seeking to its 17, 18 and 19 seriesof ruble bonds with a nominal value of 15 billion Russian rubles, equivalent toUS$228 million. The Russian coal and steel group is proposing changes to the currentpayment schedule and the order of determining the coupon rate for future periodsfor all three series of bonds.

* TheCzech government would take over payment of wages and severance to workers of unit OKDas if the company is unable to do so in accordance with the law, Puls Biznesu reported,citing Industry Minister Jan Mladek.

* was advisedby the tribunal secretary of the International Centre for the Settlement of InvestmentDisputes that a wire transfer totaling US$200,000 has been received from Indonesia,which the ICSID understands to be the paymentof the country's share of the fifth advance of related fees and expenses.

SPECIALTY

* and Lithium Americas Corp.executives met with officials of the Argentine government and the province of Jujuy,where they plan to develop their joint lithium project Cauchari-Olaroz. Construction will start in thefirst half of 2017, with an estimatedcost ranging between US$500 million and US$600 million. Production willstart no later than 2019, with the aim to reach a full capacity of 40,000 tonnesper year of lithium carbonate equivalent, Reuters reported.

* Separately,SQM filed an invalidation appeal against the permits granted to to increase lithiumproduction in northern Chile, before the environmental regulator office in Antofagastaregion. In a 47-page document, SQM claims the agency violated environmental lawwhen approving the license, daily Diario Financieroreported.

* Thesupervisory board of PJSC ALROSArecommended that shareholders approve payment of dividends for 2015 at the rateof 2.09 Russian rubles per ordinary share, Vedomostireported.Payments will total 15.39 billion rubles.

* Lithium Power International is looking to raise up to A$8 millionby offering 35 million shares at 20 Australian cents each in an initial public offering,MiningNews.net wrote.The company owns hard rock projects in Pilgangoora, Tabba Tabba and Greenbushesin Western Australia, as well as brine salars in Argentina. The planned IPO is expectedto close in May with ASX-listing targeted in early June.

INDUSTRY NEWS

* Mining companies in China reduced their spending on minerals exploration in 2015, buthave become more interested in securing mining licenses at a time when the authoritiesare slowing the pace of granting new licenses to curb capacity expansion, latestofficial data shows. A total of 32.61 billion Chinese yuan was invested in explorationprograms in China in 2015, down 19.0% from the 40.27 billion yuan recorded in 2014,while companies paid a total of 1.37 billion yuan to acquire 948 exploration licensesin 2015, down 77% and 25.4%, respectively, from a year ago, according to the annualresources report published by the country's Ministry of Land and Resources in April.

* While the Philippines is said to sit atop some of the world'slargest mineral reserves, the country's mining sector remains muted, by red tape and civil societyopposition, among others. Four out of the five presidential candidates in the Philippineshave expressed support for mining, but under strict compliance with the law.

* Luxembourg,which announced in February that it was planning to become a global center for asteroidmining, has been approached by several space agencies and companies about a potentialcollaboration, Deputy Prime Minister Etienne Schneider said. The country is workingon a joint mission with U.S. firm Deep Space Industries to develop technologiesthat might be used to deploy robotic explorers to probe asteroids after 2020, London'sFinancial Times reported.

The Daily Dose is updated as of7 a.m. New York time, and scans news sources published in Chinese, English, Indonesian,Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links mayrequire a subscription.