TABLE OF CONTENTS
Essar Finalizing US$750mln Zisco Deal
Offer for Macarthur Coal Opens for Acceptance
Mawarid Mining to Acquire Stake in Nautilus Minerals
Northern Wisconsin Proposed Taconite Mine Would Generate $604-Million Annually
Rio Tinto Raises Stake in Ivanhoe Mines to 48.5 percent
Mine Developer Bathhurst Resources Signs Deal with Lyttleton Port
Inmet Mining Announces Cobre Las Cruces Production for August
NWR Board Gives Go-Ahead to Debiensko Coal Mine
Indian conglomerate Essar said recently it expected to wrap up a $750-million investment in Zimbabwean steel maker Zisco within two to three weeks, with first production arriving in 12 to 15 months.
The African unit of Essar Group, in November agreed to buy 54 percent in the Zimbabwe Iron and Steel Company (ZISCO), with the government keeping 36 percent and 10 percent owned by minority investors.
"We are (also) in the process of finalising an investment in some coal operations in Zimbabwe," said Essar director of Middle East and African operations, Firdhose Coovadia in Cape Town.
"These are both metcoal and thermal coal which will both supply the steel-making business but going forward also be available for export."
The coal mines would also support plans by Essar to invest in Zimbabwe's energy sector and help ensure uninterrupted power supply to ZISCO.
ZISCO is the first privatisation under a power-sharing government formed in 2009 by bitter rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai.
Once a major foreign currency earner, ZISCO is now saddled with about $240-million in debt, which Essar will take over.
Coovadia told a conference in Cape Town the company had also agreed to build a 20-million ton per year coal terminal and a iron ore terminal of the same size in Mozambique's Beira port.
"We agreed with the government of Mozambique the construction of two new terminals. We will be constructing a 20-million ton per annum multi-user coal terminal at Beira and a 20-million ton iron-ore terminal also at Beira," he said.
The Mozambique government has said it expects to export one-million tons of coal a year from July, mostly through the Beira and Nacala ports.
Mozambique has vast unexploited coal reserves and about 100 exploration licence for the metal.
Peabody Energy (NYSE: BTU) and ArcelorMittal (NYSE: MT) recently announced that the offer for Macarthur Coal Limited is now open for acceptance.
Peabody and ArcelorMittal urge all Macarthur shareholders to accept the compelling offer to receive a substantial premium for their investment. The bidder's statement of PEAMCoal Pty Ltd, a company owned by Peabody and ArcelorMittal, is being sent to Macarthur shareholders today.
Under the offer, Macarthur shareholders will be offered A$15.50 cash per share, valuing the equity in Macarthur at approximately A$4.7 billion. Macarthur shareholders will also be entitled to retain any final dividend declared by Macarthur in respect of the financial year ended June 30, 2011, up to an amount of 16 cents per share, without reducing the offer price. This represents a total value of A$15.66 cash per share.
"Macarthur shareholders now have a clear opportunity to accept the PEAMCoal offer at a price that gives full credit to the state of Macarthur's current operations and development projects," said Peabody Energy Chairman and Chief Executive Officer Gregory H. Boyce.
Aditya Mittal, CFO and Member of the Group Management Board at ArcelorMittal said, "We feel this is a compelling offer which embodies value and certainty for Macarthur shareholders."
The offer is scheduled to close on September 20, 2011 unless extended.
MB Holdings Company's subsidiary Mawarid Mining is planning to acquire a stake in Canadian miner Nautilus Minerals.
Mawarid aims to invest about $50.1m to acquire 19.4 million shares equivalent to 9.98% of the expanded share capital of Nautilus Minerals.
The acquisition is proposed to be effected through Mawarid's participation in a non-brokered private placement of common shares, which will help Nautilus raise around $100m to fund the development of its pioneering deepwater mining venture.
Northern Wisconsin Proposed Taconite Mine Would Generate $604-Million Annually
A proposed taconite mine in far northern Wisconsin would generate $604-million a year to the area’s economy. But it would take up to five years for the state D-N-R to review the possible environmental effects. North-Star Economics of Madison issued a report in April 2011 about the Gogebic Taconite mine, which the Cline Group wants to develop on a 22-mile stretch from Mellen to Upson in Ashland and Iron counties.
The North-Star report said the two-year construction period would create almost 3200 jobs, and tax revenues of almost $21-million. And once the mine’s running, it would have over 2800 employees – and 700 of those jobs would pay over $80,000 a year.
North-Star’s David Ward said it would be a game-changer in what he calls the poorest region in Wisconsin. Gogebic Taconite opened an office in Hurley in January, and company president Bill Williams said people have been dropping off resumes. He says they want the mine tomorrow. But the D-N-R’s Anne Coakley says it would take a long time for her agency to do an environmental review. She said the impacts would have to be determined on the area’s surface-and-groundwater, wildlife, endangered species, and air quality.
Environmental groups say they’re watching the project carefully.
Rio Tinto recently exercised its right to subscribe for and acquire common shares in Ivanhoe Mines Ltd. under its Subscription Right. As a result, Ivanhoe Mines will issue 27,896,570 million new shares to a wholly-owned subsidiary of Rio Tinto, Rio Tinto International Holdings Limited, increasing Rio Tinto's ownership in Ivanhoe Mines by 2.0 per cent to a total of 358,158,442 common shares or 48.5 per cent.
The price paid per share was C$18.98 and the total consideration for the exercise of this Subscription Right was C$529.5 million.
The subscription was made in accordance with existing contractual arrangements between Rio Tinto and Ivanhoe Mines that permits share purchases in certain circumstances and subject to certain limits. Under the terms of these agreements and subject to certain exceptions, Rio Tinto's current maximum permitted shareholding in Ivanhoe Mines is 49 per cent.
The subscription was made in order to increase Rio Tinto's ownership of Ivanhoe in accordance with its contractual rights. Depending upon its assessment of Ivanhoe's business, prospects and financial condition, the market for Ivanhoe's securities, general economic and tax conditions, and other factors, Rio Tinto will consider availing itself of its rights to acquire additional securities of Ivanhoe.
Today's subscription reinforces Rio Tinto's commitment to the Oyu Tolgoi project, which is a natural fit with its strategy of focusing on cost competitive, long-life assets with significant growth potential. Together with Ivanhoe and the Government of Mongolia, Rio Tinto is determined to develop Oyu Tolgoi in a sustainable, mutually beneficial manner for the people of Mongolia.
West Coast coking coal mine developer Bathurst Resources will send up to 25% of its production through the New Zealand Lyttelton Port, under a wide-ranging collaborative agreement announced recently with state-owned coal miner Solid Energy Ltd.
The agreement also sees Bathurst and Solid Energy agreeing to share water, infrastructure, coal-handling and transport facilities to bring coal down from the Denniston Plateau, where both companies will be operating once Bathurst starts production, to the coastal plain near Westport.
Some 75% of Bathurst's coal will still be shipped from Westport for export from New Plymouth, the company confirmed, but today's announcement means the company has flexible coal export options.
In effect, the agreement uses capacity on the South Island trans-alpine rail link that had been contracted to Pike River Coal Ltd.
First coal is expected from Bathurst's Escarpment open cast mine, inland from Westport, by the end of this year.
The rail agreement is for up to 500,000 metric tonnes annually, building from 200,000 tonnes a year, compared with a contract for one million tonnes a year secured by Pike.
Most of the West Coast coal seams being developed by Bathurst were at one time owned by Solid Energy, which sold out in the early 2000's before the recent boom in global prices for high grade coking coal, which is used in steel-making and is in high demand in booming Asian economies.
The agreement also provides for collaborative mine planning and designs on the plateau where the two companies have common boundaries, jointly planned access to water, space where available for Solid to use Bathurst's slurry system for bringing coal off the plateau, and rights for Bathurst to put some facilities inside areas covered by Solid Energy's coal mining licenses.
The 10 year rail agreement is not tied to take-or-pay arrangements, Bathurst said.
Inmet (TSX:IMN) reported that 100% owned Cobre Las Cruces mine in Spain produced 4,500 tonnes of copper cathode in the month of August, a 17% increase over the best monthly production achieved since start-up, and a 61% increase over July production of 2,789 tonnes.
August production was at approximately 75% of design capacity, and remains on track for this year's previously disclosed production guidance in the range of 42,000 to 45,000 tonnes and the objective to reach 100% design capacity by the end of this year.
The board of New World Resources has given final approval to mine coal at the Debiensko mine in Poland, with the first output seen in 2017 and full production coming in 2018.
NWR said recently a feasibility study showed reserves of 190 million tonnes of coal and annual production could be 2 million tonnes.
The company said last month there may be an additional 60 million tonnes of coal in shallower layers.
Higher-margin coking coal would make up seven-eighths of the expected product mix, with thermal coal the remainder.
The Debiensko project, situated at an existing mine near the Czech-Polish border, will be a push into Poland for NWR, which owns the largest hard coal mines in the Czech Republic.
Last year the company failed in a 3.43 billion zlotys ($1.2 billion) bid for Polish coal group Bogdanka.
NWR, which received a 50 year mining license for Debiensko in 2008, was on track to break ground by the end of 2011.
Investment would reach 411 million euros ($590 million). NWR also said there would be pre-production operating costs expected at 133 million euros. The investment will be funded by cash and debt, NWR said.
"Following a rigorous development process we are now in a position to push the button at Debiensko. This reflects our confidence in the quality of the asset and the long-term strength of coking coal markets," NWR Chairman Mike Salamon said.
McIlvaine Company
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