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Glencore settles DRC spat with Gecamines, agrees to US$5.6B debt restructuring

TOP NEWS

Glencore settles DRC spat with Gecamines, agrees to US$5.6B debt restructuring

Glencore PLC unit Katanga Mining Ltd. ended a legal dispute with Democratic Republic of the Congo state miner Gécamines SA over their Kamoto Copper Co. SARL joint venture in the country. The parties also agreed to resolve the capital deficiency at Kamoto by converting US$5.60 billion of its total debt of about US$9 billion into new shares, effective Jan. 1. Most of the debt is owed to Glencore. Katanga and Gecamines' interests in Kamoto will remain unchanged at 75% and 25%, respectively.

Brazilian pension funds still interested in selling stakes in Vale

Brazilian pension fund Funcef is still considering the possible sale of its stake in Vale SA but is in no hurry to do so, Reuters reported, citing Paulo Werneck, a director at Funcef. Meanwhile, according to a separate Reuters report, pension fund Petros CEO Walter Mendes said the fund expects to sell part of its stake in the mining major this year but does not want to rush the process. Pension funds Previ and Funcef, which are controlling shareholders of the Brazilian miner, have been considering selling between 10% and 12.5% of their shareholding this year.

Southern Copper eyes early start at Michiquillay copper mine in Peru

Southern Copper Corp. now expects to start operations at its Michiquillay copper mine in Peru in 2022, three years earlier than the previous forecast of 2025, Reuters reported, citing CEO Oscar Gonzalez. The Grupo México SAB de CV unit plans to kick off the US$2.5 billion Michiquillay construction in 2019. However, the company will have to reach agreements with communities near the deposit to secure construction permit from the government.

BASE METALS

* Generous wage concessions made by copper producers in Chile's private sector in a bid to avert strikes are putting Codelco in a tough spot as it prepares to settle 11 negotiations at its operations in the coming months, Bloomberg News reported, citing Codelco CEO Nelson Pizarro.

* Claudia Herrera, Cordoba Minerals Corp.'s country manager in Colombia, said the San Matias copper-gold prospect is still in an exploratory stage, and it will take two years to fully determine its potential reserves, Portafolio reported. San Matias, which is said to be the country's first copper mine, is slated to begin production by 2024.

* Polish state miner KGHM Polska Miedz SA will implement 46 investment projects in its metallurgical branches up to 2023 to modernize its existing facilities, Puls Biznesu reported.

* Heron Resources Ltd. lodged a request with the Ontario Securities Commission for an order to cease to be a reporting issuer in the province, the only jurisdiction in Canada in which it is a reporting issuer since delisting from the Toronto Stock Exchange in March.

* OZ Minerals Ltd.'s unconditional takeover offer for Avanco Resources Ltd. received acceptances of 73.9%, with all of Avanco's major shareholders, including Appian Natural Resources, BlackRock Inc., Greenstone Resources and Glencore PLC, accepting the offer.

* Caeneus Minerals Ltd. intends to acquire the remaining 20% stake in the Pardoo nickel project in Western Australia from Arrow Minerals Ltd. for A$200,000 in cash.

* Titan Mining Corp. officially opened its Empire State zinc property in New York. The company expects to declare commercial production at the property in the third quarter.

PRECIOUS METALS

* Kinross Gold Corp. will proceed with the initial Gilmore expansion at its Fort Knox gold mine in Alaska after completing a feasibility study on the brownfields project. Based on a gold price of US$1,200/oz, the analysis defined an after-tax net present value of US$130 million, using a 5% discount rate from July 1, with a 17% internal rate of return.

* Toronto-based Kinross was the world's fourth-largest gold producer in 2017, with attributable production of almost 2.7 million ounces of gold equivalent, which is expected to slide to 2.5 Moz in 2018.

* Kyrgyzstan's prime minister, Mukhammedkaliy Abylgaziyev, said the government is reviewing the agreement reached with Centerra Gold Inc. in December 2017 that ended long-dragged disputes between the parties, casting doubt over the company's future, Mining.com reported. The government plans to submit to parliament its own proposals regarding the document but did not elaborate when, or what sort of changes it would suggest.

* Dragon Mining Ltd.'s appeal of the rejection of its new environmental permit for the Orivesi gold mine in Finland was dismissed by the Vaasa administrative court.

* Gran Colombia Gold Corp. plans to acquire roughly 15% of Sandspring Resources Ltd., buying C$4 million in shares and selling it a 30% interest in a Colombian exploration property.

* Bluebird Merchant Ventures Ltd. signed the formal joint venture agreement with Southern Gold Ltd. for the development of the Kochang gold mine in South Korea on a 50/50 basis. The feasibility report on the project is expected to be completed in September.

* Tharisa PLC acquired a 26.8% shareholding in Karo Mining Holdings Ltd. for US$4.5 million. Karo holds a 23,903-hectare property that is prospective for platinum group metals in Zimbabwe's Great Dyke area.

* Sibanye Gold Ltd. blamed the series of recent fatalities at its South African mines on the workers, Bloomberg News reported. "We think a lot of it is behavioral and due to people taking risks and not following safety procedures," said a company spokesperson.

BULK COMMODITIES

* S&P Global Ratings lifted Usinas Siderúrgicas de Minas Gerais SA's global scale corporate ratings to B from B- and its national scale ratings to BBB from BB, with the issue level national scale rating on Brazil steelmaker's senior secured debentures to BBB from BB and the recovery rating to 3 from 4. The outlook remains positive. The upgrade reflects the steelmaker's improving financial metrics, which the rating agency expects to be backed by a gradual increase in local demand for flat steel, slightly higher steel prices, higher iron ore output from subsidiary Mineração Usiminas SA, and the company's focus on a higher margin product mix and lean operations to optimize cash generation.

* Struggling to reduce its greenhouse gas emissions and meet its ambitious climate goals, Germany launched a task force to formulate a plan to shutter its massive fleet of coal power plants after repeatedly postponing their shutdown. But critics say economic and electric grid reliability concerns will likely continue to delay the "coal exit" of Europe's largest polluter, regardless of the preliminary shutdown deadline the commission is expected to deliver by the end of 2018.

* Gina Rinehart's Hancock Prospecting Pty. Ltd. acquired a 19.6% stake in junior miner Atlas Iron Ltd., just a week after Fortescue Metals Group Ltd. snapped up a 19.9% share, The Australian reported, citing anonymous sources. Rinehart's company would not like to see control of Atlas Iron to go to Fortescue Metals, according to the report.

* A court in Brazil's Para state rejected Norsk Hydro ASA's appeal to overturn the partial suspension of bauxite refining operations at the Alunorte smelter, Reuters reported. The state-level decision comes after a federal court also upheld the 50% output cut at the plant. The company said it was evaluating potential next steps in the courts.

* Cleveland-Cliffs Inc. announced a definitive deal for the sale of its Asia Pacific Iron Ore business to Mineral Resources Ltd. Asia Pacific Iron Ore holds a portfolio of existing mining operations across multiple commodities, including the Koolyanobbing iron ore mine and other iron ore projects in Australia.

* Black Mountain Resources Ltd. said that following completion of its restructuring, it is now mostly debt free and will focus on its Busumbu phosphate project in Uganda and the Crown lithium assets in the Democratic Republic of the Congo.

* Norway filed a request with the World Trade Organization for dispute settlement consultations with the U.S. over import tariffs on steel and aluminum, saying the additional tariffs are against the trade body's rules, Reuters reported.

* A planned merger between Tata Steel Ltd.'s European steel operations with Germany's ThyssenKrupp AG could be hit by delays as workers and investors questioned the viability of the proposed business plan, Press Trust of India reported.

* Gerdau SA readjusted the prices of its long steel products by 3% on account of the minimum freight rates published by the National Land Transportation Agency, Valor Econômico reported, citing a company statement.

SPECIALTY

* Australia took over Chile as the world's largest lithium producer, boosted mainly by record output at Galaxy Resources Ltd.'s Mount Cattlin mine and Jiangxi Ganfeng Lithium Co. Ltd.'s Mount Marion mine, Mining.com reported, citing data from the United States Geological Survey. Chile's market share dropped to 32.8% in 2017 from 37.6% in 2016, while Australia's share rose from 36.8% of the global market to 43.5% in the same period.

* Battery Minerals Ltd.'s shares crashed after Resource Capital Fund pulled out from a proposed US$30 million debt-and-equity funding agreement to develop the former's Montepuez graphite project in Mozambique, with the investor saying the graphite market no longer met its investment criteria.

* Miners are pushing to revive the U.S. lithium industry to boost domestic output as automakers look to cut their dependence on China for the critical battery ingredient and find more domestic sources, Reuters reported.

* Pilbara Minerals Ltd. began commissioning the concentrator at its Pilgangoora lithium-tantalum project in Western Australia.

* Sovereign Metals Ltd. completed an updated resource estimate for its Malingunde graphite property in Malawi after recent metallurgical work indicated that a blend of saprock can be processed along with very soft saprolite material, providing access to new ore. At a cutoff grade of 4.0% total graphitic carbon, Malingunde hosts measured, indicated and inferred resources totaling 45.7 million tonnes grading 7.2% total graphitic carbon.

* Jindalee Resources Ltd. acquired, by staking, 242 placer mineral claims covering about 4,840 acres managed by the U.S. Bureau of Land Management about 16 kilometers from the town of McDermitt on the Nevada-Oregon border. The proposed drilling program on the property will follow the "encouraging values" returned from initial surface sampling, including up to 3,020 parts per million lithium.

INDUSTRY NEWS

* Australian Minister for Resources and Northern Australia Matt Canavan released data collected from the world's largest airborne electromagnetic survey from an area bigger than France and Germany combined, in what he called a "Christopher Columbus era" in the country's exploration sector. The data, undertaken as part of the Exploring for the Future program, was from the first phase of the airborne electromagnetic survey. A second survey is planned for later this year west across the Northern Territory and into Western Australia to increase the understanding of the region's resource potential.

* Brazilian President Michel Temer issued two decrees overhauling the country's mining laws in a bid to attract investment in the sector and implementing rules about the collection of higher mining royalties, Reuters reported.

* Western Australia Mines and Petroleum Minister Bill Johnston criticized Australia's federal government for its lack of contributions toward the development of infrastructure at Port Hedland, which contributes 3% of Australia's GDP, The West Australian reported.

* Sweden's government is seeking to improve its permitting system, the country's minister for enterprise and innovation revealed at the Euro Mine Expo in Skellefteå, Sweden. A study is underway to assess options to streamline processes, shorten lead times and limit costs, said Mikael Damberg. In particular, the granting of environmental permits — a key requirement for projects in various industries, including but not limited to mining — is being revisited.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.