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Alcoa strike in Western Australia may last beyond 4 weeks

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


Alcoa strike in Western Australia may last beyond 4 weeks

TOP NEWS

Alcoa strike in Western Australia may last beyond 4 weeks

The ongoing strike by Alcoa Corp. workers at three of its alumina refineries and two bauxite mines in Western Australia may be extended beyond four weeks following a vote by striking workers on Sept. 6, Reuters reported. The union expects most workers to vote in favor of the strike, which started Aug. 8. Meanwhile, an Alcoa spokeswoman said the company had contingency plans to continue running its operations during the strike. The refineries produce about 9.3 million tonnes, or about 8% of the world's alumina output.

Tahoe shares crash after court reverses Escobal mine license reinstatement

The Constitutional Court of Guatemala reversed a Supreme Court decision to reinstate the mining license for the Escobal silver mine, held by Tahoe Resources Inc. unit Minera San Rafael SA. Tahoe Executive Chairman Kevin McArthur said that in a best case scenario, it would take about six months to have a mine permit reinstated at Escobal. He also cast the rejection in a positive light, saying it added procedural certainty to Tahoe's attempt to get Escobal running smoothly.

Australian lithium firms facing unexpected Argentina tariff

Australian lithium companies operating in Argentina are facing an unexpected 8% tariff on export revenue, following Argentina President Mauricio Macri's plans to impose export taxes, The Australian reported. After the news, Orocobre Ltd. went into a trading halt before the market opened, while shares of Lake Resources NL and Galaxy Resources Ltd. fell 6% and 3.7%, respectively. Argosy Minerals Ltd. stayed trading but said it was seeking more information.

BASE METALS

* Chilean state-owned copper miner Codelco stopped operations at three out of four furnaces at its Ventanas foundry on Sept. 3 after sensing high levels of sulfur dioxide, Reuters reported. The levels of the gas rose to 20% over the accepted limit for five minutes, due to which the furnaces were shut down as a "voluntary and preventative measure."

* Baikal Mining Co. LLC started construction of a mining and metallurgical plant at the Udokan copper project in Russia, Reuters reported. Udokan is the largest undeveloped copper deposit in Russia, with total reserves of around 26.7 million tonnes. The plant will have the capacity to process up to 12 million tonnes of ore per year after its launch in 2022, producing cathode copper and sulfide concentrate.

* Nickel Mines Ltd. increased its stake in Hengjaya Holdings Private Ltd. by 35% for US$70 million to increase its interest in the two-line rotary kiln electric furnace plant currently under construction within the Indonesia Morowali Industrial Park to 60%.

* First Cobalt Corp. fully acquired the Iron Creek cobalt-copper project in Idaho and eliminated a 4% production royalty in favor of the leaseholder, with an initial resource estimate anticipated within the next few weeks.

* Altus Strategies PLC signed a letter of intent with ASX-hopeful Raptor Resources Ltd., granting the latter an option to acquire Aterian Resources Ltd. subsidiary Atlantic Resources Ltd., which is advancing four copper and base metal projects in Morocco.

PRECIOUS METALS

* Coeur Mining Inc. declared commercial production at its Silvertip silver-zinc-lead mine in British Columbia, effective Sept. 1. The company said the mine is on track to reach an average processing rate of 750 tonnes per day by year-end and 1,000 t/d by early 2019. Due to the improved visibility of Silvertip's production and stronger-than-expected performance of its Rochester mine in Nevada, Coeur raised its full-year output guidance to between 36.1 million and 39.5 million ounces of silver equivalent.

* Lonmin PLC's largest shareholder Public Investment Corp. which owns a 29.2% stake in the struggling miner, will support a takeover by Sibanye Gold Ltd., Reuters reported. Public Investment, which is also the second-largest shareholder in Sibanye with an 11.2% interest, said the deal "will assist in driving consolidation in an ailing sector."

* Separately, Sibanye launched a US$400 million tender offer to buy back bonds to slash its outstanding debt and reduce annual interest costs by about US$26 million. The company will fund the repurchase from existing cash resources, including the US$500 million advance proceeds of a recent streaming deal.

* Guyana Goldfields Inc. agreed to sell to BHP Billiton Group its 6.1% interest in SolGold PLC, the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador. Under the terms, BHP will acquire Guyana's entire stake of 103,125,000 shares in SolGold for an aggregate purchase price of £27.4 million, or about 27 pence per share.

* Endeavour Mining Corp. agreed to sell its 80% interest in the Tabakoto gold mine in Mali to BCM Investments Ltd. subsidiary Algom Resources Ltd. for US$60 million in cash. The deal is expected to close in the fourth quarter. "Tabakoto has been sold following a comprehensive review which determined that the capital investments required to reduce its AISC did not meet our capital allocation criteria," Endeavour President and CEO Sébastien de Montessus said.

* Semafo Inc. achieved commercial production at its Boungou gold mine in Burkina Faso, effective Sept. 1. During the initial 30-day period, the mill processed more than 90,000 tonnes of ore at an average 2.4 g/t of gold, with a recovery rate of 83% mainly from lower grade ore.

* East Africa Metals Inc. secured draft model agreements, or DMA, from Ethiopia's Ministry of Mines, Petroleum and Natural Gas for its Mato Bula and Da Tambuk gold projects. The company must fulfill the conditions outlined in the DMA in order to obtain a mining license.

* KEFI Minerals Plc received approval from the Ethiopian central bank for the banking arrangements for the Tulu Kapi gold project.

* Platinum Group Metals Ltd., through Waterberg JV Resources (Pty.) Ltd., filed a mining right application for its 50.02%-owned Waterberg platinum group metals-copper-nickel joint venture in South Africa.

BULK COMMODITIES

* Rio Tinto is offering Japanese buyers a premium of US$112 per tonne of aluminum shipments in the fourth quarter, unnamed sources told S&P Global Platts. The offer, which includes London Metal Exchange cash and cost insurance and freight in Japan, is lower by 15% from the US$132/t premium on aluminum shipments in the third quarter. The report added that another producer is offering a premium of US$115/t of aluminum shipments. Japan is Asia's biggest aluminium importer and the premiums it agrees to pay each quarter serves as a benchmark for the region.

* Mongolian Minister of Mining and Heavy Industry Dolgorsuren Sumiyabazar said the country is ready to work with foreign investors on the Tavan Tolgoi deposit, one of the world's largest untapped coking and thermal coal deposits, with a total estimated reserve of 6.4 billion tons, Xinhua news agency reported. The Mongolian parliament in June approved the sale of up to 30% of the Tavan Tolgoi coal property through a partial IPO of state-owned Erdenes Tavan Tolgoi LLC.

* Cleveland-Cliffs Inc. will use cash on hand to redeem its 5.90% senior notes due March 2020 and 4.80% senior notes due October 2020 with an outstanding principal amount of US$211 million.

* Binzhou in China's Shandong province is planning to support the development of a high-end aluminum industry with five new projects, including a 10,000-tonne-per-year aluminum alloy plant, Reuters reported, citing a local government document. The plant will be built by Huachuang Metal, while an additional aluminum alloy project, focused on the automotive and aerospace industries, will be developed by Hangqiao Technology. A third plant for making aluminum formwork will be built by Yangxin Taihe New Material, and a fourth project will have the annual capacity to produce up to 1.88 million tonnes of carbon materials.

* Lanebrook Ltd. distributed all of its 62.74% shareholding in Evraz PLC to its direct shareholders on a pro rata basis. Crosland Global Ltd. now holds a direct interest in 31.37% of the total voting rights, and Greenleas International Holdings Ltd. holds 30.52%. The distribution will not change the indirect economic interest in EVRAZ held by Alexander Abramov, Alexander Frolov, Roman Abramovich and Eugene Shvidler, according to the release.

* ArcelorMittal's Veriña plant in Spain will supply 6,350 tonnes of rail steel to India's Delhi Metro Rail Corp. starting in 2019, Metal Bulletin reported. The metal product will be used for the Mumbai Metro rail project.

* The U.S. saw a 25.8% growth in coal exports during the second quarter compared to the year-ago period, shipping about 7.8 million more tons overseas, according to data compiled by S&P Global Market Intelligence. India was the largest importer, buying 5.1 million tons of U.S. coal, a 24.5% year-over-year increase and a 600,000-ton decrease from the first quarter of 2018.

* Kalium Lakes Ltd. recorded a 150% increase in measured and indicated resources at the Beyondie sulfate of potash project in Western Australia. Measured resources stood at 1.7 million tonnes grading 11,488 milligrams per liter of sulfate of potash, while indicated resources were at 9.2 million tonnes grading 12,459 milligrams per liter of sulfate of potash.

SPECIALTY

* Neo Lithium Corp. is looking for potential partners who will fund construction of the Tres Quebradas lithium project in Catamarca, Argentina, CEO Waldo Perez said in a report by Bloomberg News. The project, worth US$490 million, is expected to produce 35,000 tonnes of lithium carbonate by 2023, and is targeted to produce lithium hydroxide. Perez said the amount would be enough to bankroll the whole project, and he would not seek an off-take deal.

* Syrah Resources Ltd. seeks to raise A$94 million from a fully underwritten institutional placement to complete the ramp-up of its Balama graphite project in Mozambique.

* The lab-grown diamonds industry filed a complaint against Anglo American PLC unit De Beers SA with the U.S. Federal Trade Commission, accusing the latter of dumping its lab-grown stones at below cost pricing, Bloomberg News reported. Chatham Created Gems Inc. CEO Tom Chatham, who filed the complaint, said the equipment to grow diamonds is "not cheap." De Beers plans to sell the synthetic diamonds at about US$800 per carat, which is about 10% of the price of a natural diamond or 20% of the price of current lab-made diamonds.

* Stornoway Diamond Corp. completed the ramp-up at its Renard diamond mine in Quebec, achieving sustained production at or above the mine's full design capacity.

* 92 Resources Corp. entered into an option agreement with Osisko Mining Inc. to acquire up to a 75% interest in 28 claims directly adjoining the company's Corvette lithium property in Quebec's James Bay region.

* Laramide Resources Ltd. is poised to take full control of the Lagoon Creek uranium project in Australia's Northern Territory after agreeing to acquire joint venture partner Verdant Minerals Ltd.'s interest.

* Liontown Resources Ltd. reported a maiden resource estimate for the Kathleen's Corner and Mount Mann deposits at its wholly owned Kathleen Valley lithium-tantalum project in Western Australia of 21.2 million tonnes at 1.4% lithium oxide and 170 parts per million tantalum pentoxide in the measured, indicated and inferred categories, at a 0.5% lithium oxide cut-off.

* Talga Resources Ltd. inked a deal with Biomer Technology Ltd. for the joint development of graphene-enhanced thermoplastics for potential commercialization in the healthcare and coating markets.

* BlueRock Diamonds PLC started kimberlite processing from KV1, the second kimberlite pipe in the Kareevlei diamond mine in South Africa.

* Altura Mining Ltd.'s namesake lithium project opened in Pilgangoora in Western Australia, just 18 months after the start of construction.

INDUSTRY NEWS

* South Africa's mining and quarrying industry in the second quarter grew 4.9% quarter on quarter, contributing a positive 0.4 percentage points to the country's GDP, according to data from Statistics South Africa. The improvement was sparked by an increase in production of metal ores such as platinum group metals, copper, and nickel.

S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.

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