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In This List

ArcelorMittal, Nippon close US$5.7B Essar Steel buy; Cracks found at Vale dam

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


ArcelorMittal, Nippon close US$5.7B Essar Steel buy; Cracks found at Vale dam

TOP NEWS

ArcelorMittal, Nippon Steel close US$5.7B purchase of Essar Steel

ArcelorMittal and Nippon Steel Corp. completed their acquisition of Essar Steel India Ltd. and formed the ArcelorMittal Nippon Steel India Ltd. joint venture, which will own and operate Essar Steel. ArcelorMittal will hold 60% of the joint venture and Nippon Steel will own 40%. In October 2018, the buyers lodged a US$5.7 billion joint bid to win the right to acquire Essar Steel.

Cracks found in Vale's B-5 tailings dam in Brazil

Brazil's Minas Gerais state prosecutors asked Vale SA to hire an independent auditor after cracks were found in the iron ore mining company's B-5 tailings dam, Reuters reported, citing broadcast news from television program Jornal da Band. The B-5 tailings dam is at the Mutuca iron ore mine near the town of Brumadinho, where Vale's collapsed tailings dam for the Feijao iron ore mine was located. The report noted that in October, Vale met with the prosecutors but declined to commit to an independent audit, saying the cracks "have not been presenting any changes and do not compromise the structure."

Report: Northern Star set to acquire Newmont's Super Pit stake

Northern Star Resources Ltd. is set to acquire Newmont Goldcorp Corp.'s 50% stake in the Super Pit gold mine in Western Australia; the miner reportedly launched a A$700 million fundraising and tapped brokers Macquarie Capital and Canaccord Genuity to oversee the acquisition, The Australian Financial Review's Street Talk reported. Sources said Northern Star, which was placed on a trading halt Dec. 16, will most likely pay more than Saracen Mineral Holdings Ltd.'s US$750 million purchase price for Barrick Gold Corp.'s 50% stake in the Super Pit, which was completed in November.

BASE METALS

* Codelco CEO Octavio Araneda expects medium-term copper prices to range from about US$2.60 per pound to US$2.80/lb, with the Chilean miner projected to generate additional revenue of about US$1 billion per year for the state starting in 2021, Reuters reported, citing local newspaper El Mercurio.

* Indonesian copper-gold miner and Freeport-McMoRan Inc. unit PT Freeport Indonesia said its underground pit will reach optimum operations by 2022, while the open pit will stop operations in mid-2020, Kontan reported, citing Freeport spokesperson Riza Pratama.

PRECIOUS METALS

* Canada-based Equinox Gold Corp. and LeaGold Mining Corp. entered into a definitive agreement to merge and create a gold producer operating entirely in the Americas. Under the proposal, LeaGold shareholders will receive 0.331 of an Equinox Gold share for each share held, implying a value of C$2.70 per LeaGold share. Concurrent with the deal, Equinox Gold secured a US$670 million financing package. Closing is expected in the first quarter of 2020.

* Endeavour Mining Corp. CEO Sébastien de Montessus and Centamin PLC Chairman Josef El-Raghy agreed at a meeting to conduct a reciprocal due diligence exercise to determine the feasibility of a combination of the two companies, after the latter's board rejected the former's C$2.52 billion all-share takeover bid. Endeavour sent a proposed timetable to Centamin to begin the due diligence process and asked Centamin to ask for an extension of Endeavour's "put up or shut up" deadline of Dec. 31.

* Russian gold producer Trans-Siberian Gold PLC expects to save about US$6 million over the next seven years thanks to its admission to the Kamchatka Advanced Special Economic Zone. The company also said it may be entitled to an accelerated process for a value-added tax refund. As part of the deal, Trans-Siberian Gold will invest up to US$21.2 million in new projects until 2024 including developing Vein 25, an extension to the Asacha gold mine.

* British Columbia-based Midas Gold Corp. was allowed by the U.S. Forest Service to craft a key environmental report for the Stibnite gold project in Idaho after lobbying efforts, The Associated Press reported, citing documents obtained by conservation group Earthworks. The Forest Service initially denied Midas Gold's request to participate in making a biological assessment, citing the project's harmful effects on protected fish.

* Resolution Minerals Ltd. completed due diligence on the 64North project in Alaska. Resolution executed an option to a joint venture deal and provided the required US$500,000 exploration advance to Millrock Resources Inc.

* Geopacific Resources Ltd. said civil construction started at its Woodlark gold project in Papua New Guinea, following a A$40 million capital raising in October.

* Scotgold Resources Ltd. flagged a 12-week delay to the development schedule of the Cononish gold-silver mine in Scotland, U.K., due to issues in managing the excavated materials needed to build the process plant building and to establish the wide drainage site for the dry stack tailings storage facility. First gold production is now expected in May 2020.

* Mexus Gold US is exploring fundraising options, including selling part of its nonproducing properties, to hire more crewmembers and operate the Santa Elena gold mine continuously for 24 hours.

* Local authorities said 24 people died in a landslide at the Ndiyo gold mine in the Democratic Republic of Congo, Mining.com reported, citing information from Agence France-Presse.

* Sunrise Resources PLC signed a deal with General Moly Inc. unit Liberty Moly LLC for a five-year lease of water rights to develop the CS pozzolan-perlite project in Nevada. The leased water rights are attached to the past-producing Liberty molybdenum mine about 18 miles west of CS.

BULK COMMODITIES

* Hebei Jingye Group Co. Ltd. is confident that it will win approval for its bid to acquire British Steel Corp. Ltd. as it continues to make progress in completing the transaction, BBC News reported. The Chinese company's statement came after The Telegraph, quoting Whitehall sources, reported that the bid is threatened with collapse and that talks with other potential suitors have been opened. Further, a report by The Times of London reported that capital controls being imposed by China on Jingye could thwart a final deal.

* U.S. Steel Corp. agreed to pay US$8.5 million to settle a lawsuit filed in 2017 that accused the steelmaker of negligence in allowing air pollution emissions from its Clairton Coke Works in Pennsylvania, the Associated Press reported.

* American Pacific Borates Ltd. intends to double production of sulfate of potash at its Fort Cady mine in California to 217,724 tonnes per annum, from 108,861 tonnes per annum from the project's definitive feasibility study, on the back of continued strength in the market and strong fertilizer market fundamentals that is expected to lead to long-term demand growth.

* Oracle Power PLC reached an agreement with the private office of H.H. Sheikh Ahmed Dalmook Juma Al Maktoum and China National Coal Group Corp. subsidiary China National Coal Development Co. Ltd. to jointly develop the Block VI coal-to-power project in Pakistan. The deal envisions the creation of a special-purpose vehicle, which will be 73%-owned by China National Coal, 15%-owned by the private office and 12%-owned by Oracle Power.

* India's Comptroller and Auditor General censured state-owned Coal India Ltd. over pollution at eight mines, Mining Weekly reported.

* Citing slowing economic growth and increasingly difficult market conditions, Moody's Investors Service placed a negative outlook on the U.S. coal and steel sectors for 2020. The cumulative EBITDA of U.S. coal producers is forecast to decline by more than 3% in 2020 compared to 2019, according to a report detailing the firm's outlook on base metals, steel and coal. Moody's negative 2020 outlook for the U.S. steel industry stems from forecast muted demand due to slowing economic growth and "lackluster prices."

* Former New York City Mayor and 2020 White House hopeful Mike Bloomberg called to shut down all U.S. coal plants by 2030 and for the country to rely fully on clean energy by 2050 as part of a campaign energy plan. With the release of the proposal, Bloomberg joins several other top Democratic presidential contenders who have pledged to move the U.S. to 100% clean energy if elected.

* Ghana Manganese Co. terminated its equipment hire contract with Perenti Global's African Mining Services at the Nsuta manganese mine in Ghana after the government advised the mining company to cap its production. Perenti reduced its fiscal 2020 guidance for posttax underlying net profit to about A$115 million to A$120 million from the previous guidance of A$140 million.

* A flood at Sichuan Coal Industry Group LLC's Shanmushu coal mine in China's Sichuan province killed four miners and trapped 14 others, Xinhua News Agency reported. Rescue operations are underway.

* India's coal ministry said it will establish "Sustainable Development Cell" to promote sustainable coal mining in the country and address environmental concerns over mine closures, Press Trust of India reported.

SPECIALTY

* USA Rare Earth LLC and Texas Mineral Resources Corp. opened the Wheat Ridge rare earths pilot plant in Colorado, the first rare earths processing facility outside of China. The plant will use feedstock from the Round Top rare earths deposit in Texas.

* Lucapa Diamond Co. Ltd.'s latest sales of diamonds from the Lulo mine in Angola and the Mothae mine in Lesotho generated US$6.4 million in revenue, bringing total sales in 2019 to US$55.0 million.

* Prospect Resources Ltd. signed a three-year secure power-supply agreement with Zimbabwe Electricity Transmission and Distribution Co. for the Arcadia lithium project.

* Russia sought an end to a sales ban on diamonds from the Central African Republic and called for a road map to detail the steps the African country needs to go through to get the ban lifted, Bloomberg News reported, citing Russian Deputy Finance Minister Alexei Moiseev. In 2020, Russia will take over the rotating chair of the Kimberley Process, a group that aims to remove so-called blood diamonds from the global supply chain.

* The oversupply of lithium chemical compounds that forced prices down in 2019 should persist in 2020 as the "electric vehicle revolution" will not accelerate in tandem with recent and upcoming increases in supply, according to a report from S&P Global Platts.

* Gibb River Diamonds Ltd. said entities related to Ron Brierley, including Mercantile Investment Co. Ltd., divested their shareholding. The ASX-listed explorer believes that the sale will help it promote and finance the Blina diamond project in Western Australia.

* The U.S. Army extended, for the third time, the deadline for proposals from miners for the cost estimates of a rare earths processing plant. The Army division overseeing munitions is planning to fund up to two-thirds of a refiner's costs and may fund at least one project, Reuters reported.

INDUSTRY NEWS

* The Minerals Council of South Africa, a trade group representing mining companies, asked the nation's government to allow miners more flexible access to electric power supplies, saying recent power curtailments by state-owned power generator Eskom Holdings SOC Ltd. have had a devastating effect on the mining sector.

* Madagascar's mining chamber opposed a draft bill that would grant the government a bigger share of revenue from mining activities, Reuters reported. The bill aims to increase royalties on nickel, cobalt, precious metals and gemstones to 4% from 2%. The government would also own at least a 20% stake in any marketable mining production under the proposal, the report said.

* Peru's National Service of Protected Natural Areas approved the creation of the Ausangate Regional Conservation Area, which aims to safeguard glaciers and the Andean grasslands, together with emblematic animals, from damaging activities, Mining.com reported. Though mining was not explicitly banned within the area, projects are unlikely to be approved, the report said, citing Cusco's manager for natural resources, María Isabel Cazorla.

* WestStar Industrial Ltd.'s engineering contractor business, SIMPEC, was awarded an additional estimated A$6 million of scope extensions to its current contracts in Western Australia. This brings the total contracts awarded to the company to about A$30 million since July 1. The company is expecting to complete its acquisition of Alltype Engineering Pty. Ltd. in early 2020.

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