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Brazil probes alleged 1.6B reais corruption in several mining municipalities

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 probes alleged 1.6B reais corruption in several mining municipalities

TOP NEWS

Brazil probes alleged 1.6B reais corruption in several mining municipalities

Brazil's federal police launched a country-wide search as part of an investigation into alleged corruption relating to the payment of 1.6 billion Brazilian reais in excess mining royalties to several municipalities. According to Reuters, the investigation saw 16 searches and raids across 11 states, including 29 interrogations, four detention warrants, 12 arrests and the seizure of over 70 million reais in assets.

Fortescue CEO fears ore blending venture with Vale may fail

Fortescue Metals Group Ltd. CEO Nev Power said that the company's alliance with Vale SA to create an ore blend for sale in China may fail, The Australian reported. "We're still in discussions with Vale, but I think it is looking less and less likely we are going to be able to do that transaction, which I think is a real shame," Power said.

Sale of US$1.5B SQM stake falls through on failure to attract suitable offers

The sale of an indirect stake in Chile's Sociedad Quimica y Minera de Chile SA fell through after it failed to attract suitable offers, Reuters reported. The stake, valued at about US$1.5 billion, has been up for sale since December 2015, when SQM controller Julio Ponce's firm Sociedad de Inversiones Oro Blanco SA announced plans to sell a majority stake in Sociedad de Inversiones Pampa Calichera SA, which owns 23% of SQM.

DIVERSIFIED

* Amid Rio Tinto's ongoing Guinea payments scandal, Jeffery P Weiner Supplemental Trust has filed a class action lawsuit against the company, alleging that the scandal has resulted in losses for owners of its American securities, The Australian Financial Review reported. The lawsuit has named former CEOs Sam Walsh and Tom Albanese, as well as former CFO Guy Elliott and current CFO Chris Lynch, as defendants.

* Glencore Plc increased its maximum tender offer for the previously announced debt buyback to US$1.14 billion of its outstanding notes, up from the previous US$1 billion maximum offer. The miner also priced its debt buyback.

* Freeport-McMoRan Inc. completed the previously announced sale of its Deepwater Gulf of Mexico properties to Anadarko Petroleum Corp. for US$2.0 billion in cash. Freeport also settled a preferred stock obligation with its consolidated subsidiary, Plains Offshore Operations Inc., for US$582 million.

BASE METALS

* Global Ferronickel Holdings Inc., the Philippines' second-largest nickel miner, said it would appeal the "unlawful" cancellation of the environmental permit for its Ipilan nickel project, Reuters reported.

* The U.S. Forest Service and the U.S. Bureau of Land Management have denied to renew two of Antofagasta Plc's long-held federal mining leases over its Twin Metals copper project in Minnesota. The leases, held through Antofagasta's Twin Metals Minnesota LLC unit, have been in good standing for more than 50 years.

* A state of emergency was imposed after a violent altercation at the Exploracobres copper mine in Ecuador between police and the indigenous Shuar people claimed the life of one policeman, Mining.com reported. The attack involved about 60 people, who claim that the mine's owner has encroached on their territory.

* Capstone Mining Corp. is mulling integrating its Santo Domingo copper-iron project in Atacama region, Chile, with other nearby copper mine projects to increase the viability of its investments and reactivate the project, daily Diario Financiero reported.

* Artemis Resources Ltd. secured a three-month exclusive option from Fox Resources Ltd. to buy the latter's fully permitted AGIP Radio Hill nickel-copper operations, processing plant and associated mining and exploration tenements in Western Australia for a total of A$3.5 million.

* About 80% of tin smelters in South China's Guangdong province have suspended production for the ongoing environmental protection inspections surveys by the state and local authorities in Guangdong since early last month, Shanghai Metals Market reported.

PRECIOUS METALS

* An employee of a local contractor at Agnico Eagle Mines Ltd.'s Kittila gold mine in Finland was killed in an accident that occurred Dec. 15 on level 325 of the mine. The cause of the accident is not yet known but an investigation is underway.

* Gold price is nearing a 10-month low, with spot bullion trading at US$1,122.89 per ounce on Dec. 15 in Singapore, due to an improvement in the U.S. economy and the trust of investors in the policies of President-elect Donald Trump, Live Mint wrote.

* The government of Ecuador expects to receive US$1.28 billion in taxes from Lundin Gold Inc.'s Fruta del Norte gold project during the mine's expected lifespan of 13 years, daily El Comercio reported.

* Fresnillo Plc decided to suspend investment in a pyrite plant at its Zacatecas leaching facility until market conditions improve. Detailed engineering works would continue, but construction and an order placed for major equipment were deferred, daily Opportimes reported.

* Minera Alamos Inc. engaged CSA Global Canada Geosciences Ltd. to undertake a preliminary economic assessment of its La Fortuna gold project located in the State of Durango, Mexico.

* POZ Minerals Ltd. entered an option agreement with privately held APP Gem Mining Pty. Ltd. to sell its Bulgera gold project in Western Australia.

* PNX Metals Ltd. completed the first stage of its farm-in agreement with a subsidiary of Kirkland Lake Gold Ltd., earning a 51% interest in 19 exploration licenses and four mineral leases in Australia's Northern Territory. The company has also elected to increase its interest to 90% under the second stage of the farm-in.

* Montan Mining Corp. signed a definitive agreement with Chazel Capital Inc. to acquire Cerro Dorado SAC, which holds an option and permits to operate the Rey Salomon gold mine in Peru. The transaction is expected to close in January 2017.

* ABC reported that Kingsgate Consolidated Ltd. will seek compensation from the Thailand government over its decision to shut down the Chatree gold mine, citing company Chairman Ross Smyth-Kirk.

BULK COMMODITIES

* South32 Ltd. expects to produce a total of 7.9 million tonnes of coal in 2017, compared to 8.4 million tonnes this year, from its Illawarra metallurgical coal operation in New South Wales, Australia.

* Nucor Corp. has agreed to acquire Republic Conduit, a manufacturer of steel electrical conduit in North America, from Tenaris SA for US$335 million.

* Ding He Mining Holdings Ltd. established a new subsidiary in the U.S. to explore and seek potential business opportunities, including property development, asset sales and commodity products trading.

* Thailand's Central Bankruptcy Court approved a US$1.94 billion debt restructuring plan for Sahaviriya Steel Industries Pcl (SSI), the country's biggest steelmaker, Reuters reported.

* Steelmakers in 10 cities within China's Hebei province, including Tangshan, were ordered to cut output as the local government moves to reduce emissions amid a series of pollution alerts, Reuters wrote.

* Meanwhile, a separate Reuters report said that China's Banking Regulatory Commission told banks to stop extending financial support to coal and steel firms that are violating the government's capacity reduction plans.

* The government of Queensland has launched new health and safety reforms to protect coal miners from black lung disease. The updated coal health and safety laws will take effect on Jan. 1, 2017.

* A Liberty House executive chairman said the group has been short-listed among four bidders and is now in the second round for taking over troubled Australian steelmaker Arrium Ltd., Bloomberg News reported. Sanjeev Gupta noted that the group expects to complete the £330 million acquisition of Rio Tinto's aluminum and hydroelectric plants in Scotland on Dec. 16.

* Fortescue plans to pay a further US$1.0 billion of debt on Dec. 23 for its 2019 senior secured credit facility. The repayment will save Fortescue US$38 million in annual interest.

* A global investor rights law firm, Rosen Law Firm, filed a class action lawsuit on behalf of purchasers of BHP Billiton Group and Vale SA joint venture Samarco Mineração SA's 10-year notes respectively due 2022, 2023, and 2024, from Oct. 31, 2012, through Nov. 30, 2015, alleging that Samarco failed to disclose the defects at the Fundão tailings dam and ignored warnings about the potential accident.

* Samarco Mineração unveiled a plan for a provisional tailings deposit, with a view to restart pellet output in Brazil, Metal Bulletin reported. The operator of the Samarco iron ore project looks to use the Alegria Sul Cave in Minas Gerais to deposit up to 17 million cubic meters of tailings for a two-year period.

* Vale concluded the sale of its remaining 13.63% stake in Mineração Paragominas SA to Norsk Hydro ASA in a transaction valued at US$113 million.

* Afarak Group Oyj has increased its ferrochrome production capacity by switching one of the furnaces at its Mogale plant from producing silicomanganese to ferrochrome. The Mogale plant currently has two ferrochrome furnaces in operation and one silicomanganese furnace, with the transition made due to favorable market conditions for ferrochrome.

* China's Hesteel Co. Ltd. plans to invest US$120 million to upgrade Serbian steel mill Zelezara Smederevo in 2017, Reuters reported. The company purchased the steel mill from the Serbian government earlier this year for €46 million. Hesteel also plans to raise production from the plant to 2.1 million tonnes in three or four years.

* Metinvest BV said its Avdiivka coke plant in Ukraine resumed operations on Dec. 12 after production was halted last week by a military attack, Metal Bulletin reported.

SPECIALTY

* De Beers SA will start flooding the underground operations at its Snap Lake diamond mine in Canada's Northwest Territories in early January 2017 after failing to find a buyer for the loss-making mine. The company said there were potential buyers but the parties failed to reach an agreement for the sale.

* Volt Resources Ltd.'s pre-feasibility study for its Namangale graphite project in southeast Tanzania confirmed its "strong technical and financial viability" with an estimated pretax net present value of US$1.31 billion and an 87% internal rate of return. The study is based on 3.8 million tonnes of ore being processed annually at an average 4.7% total graphitic carbon to produce 170,000 tonnes of graphite per year over a 22-year mine life.

* Skyharbour Resources Ltd. entered an option to secure up to 70% of the Preston uranium project by spending up to C$8 million.

* Titanium junior Melior Resources Inc. warned that its shaky financial situation could force it into bankruptcy after a plan it was depending on for much needed cash fell through.

* According to a report by BMI Research, on the back of increasing growth in the lithium-ion battery and electric vehicle markets, global lithium output and supply is set to take off over the next few years, Mining Weekly wrote. Australia is projected to remain the top lithium producer over the next four years, with output rising sharply from 188,000 tonnes this year to 851,000 tonnes by 2020, the report added.

INDUSTRY NEWS

* The Bolivian government will start to regularize 8,000 mining licenses in the country in 2017, according to mining minister César Navarro, daily El País Online reported.

* According to SNL Metals & Mining data, the credit default swap price of selected mining companies steadily dropped from Jan. 1 up until Dec. 1, which reflects a perceived improvement in the creditworthiness of the mining companies, as well as a decline in their default risk. Teck Resources Ltd. showed the highest CDS price change at 89% negative on Dec. 1, followed by Anglo American Plc and Barrick Gold Corp. with 77% and 55% drops in their respective five-year contracts on senior debt.

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