TABLE OF CONTENTS
Rio Tinto increases its Stake in Ivanhoe Mines to 49 percent
Tronox Will Merge With Ore Supplier
Shanduka Offered Majority Stake in Lonmin's Limpopo Division
Vale Exports First Batch from Moatize Coal Mine
Canada's Banro Start Gold Production at Congo Gold Mine
Rio Tinto Gets Back Into Potash Mining with Canadian JV
Vale Fertilizer Unit to Invest $15 Billion by 2020
AngloGold to Invest $250m annually in Brazil
First Nickel Begins Ore Delivery from Ontario Mine
Alaska Judge Upholds Pebble Project Exploration Activity Permits
Romarco Raising C$80m to Fund Haile Gold Project
Orvana Announces Submittal of Mine Permit Application for Copperwood Project, MI
Atlantic to Conduct Study on Bauxite Exploration in Vietnam
Macroasia Sees Early 2012 Start for Philippine Nickel Mine
Philippine's NiHAO Signs Nickel Marketing Deal with Glencore
Hindustan Copper to Develop Underground Copper Mine for $378m
Minmetals to Acquire Anvil Mining for $1.28bn
Australia Approves $20-30bn BHP Olympic Dam Mine Expansion
BHP Plans to Increase Iron-ore Production at Pilbara
Rio Tinto has acquired an additional 3,700,000 common shares in Ivanhoe Mines Ltd. through a wholly-owned subsidiary, Rio Tinto International Holdings Limited, increasing Rio Tinto’s ownership in Ivanhoe Mines by 0.5 per cent to a total of 361,858,442 common shares or 49 per cent through a privately negotiated share purchase agreement. The shares were purchased for an aggregate of C$73,075,000 at a price per share of C$19.75.
The share purchase was made on behalf of Rio Tinto by Credit Suisse under an irrevocable mandate given by Rio Tinto to Credit Suisse on August 24, 2011. The mandate gave Credit Suisse the irrevocable authority to purchase 0.5 per cent of the outstanding common shares of Ivanhoe on the secondary market at any time for a period of 30 days, without further instruction from Rio Tinto. The purchase was executed on 22 September 2011 and settled on 26 September 2011.
The acquisition of Ivanhoe shares was made in compliance 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 percent.
In a $1 billion-plus bid to vertically integrate its business in the white pigment titanium dioxide, Tronox will acquire the mineral sands operations of South African mining conglomerate Exxaro Resources, the world’s third-largest supplier of TiO2 ores.
Tronox, which calls itself the fifth-largest global producer of TiO2, will get a 74% interest in two South African operations that mine TiO2-rich minerals such as ilmenite and rutile as well as a TiO2-rich smelting coproduct called slag. All the minerals are feedstocks for plants that produce purified TiO2 pigment.
The deal also includes Exxaro’s 50% interest in the Tiwest joint venture between the two companies in Australia. This partnership operates a TiO2 plant that is back-integrated into mineral sands.
In exchange, Exxaro will receive a 38.5% stake in Tronox, which is planning to list on a major stock exchange after the transaction is completed in the first half of 2012. Tronox delisted from the New York Stock Exchange in 2008 just before declaring bankruptcy as a result of liabilities inherited from its former parent, Kerr-McGee. Tronox emerged from bankruptcy earlier this year.
On the basis of recent Tronox share prices, the deal is worth about $1.3 billion. The combined firm would have had before-tax profits of $495 million on sales of nearly $2 billion in the 12-month period ending on June 30.
The key to the deal for Tronox is securing raw materials. “Because of the assurance of ore supply, we believe we will be uniquely positioned to take advantage of future expansion and profitable growth opportunities,” said Tronox CEO Dennis L. Wanlass in a Sept. 26 conference call. The company is already considering a new TiO2 plant in South Africa as well as expansion of the mineral sands operations.
FLSmidth is buying the privately owned Canadian mining equipment company Knelson.
Headquartered in Langley, British Columbia, Knelson manufactures equipment for the recovery of precious metals such as gold, platinum and silver, as well as the enhanced gravity separation of base metals and industrial minerals. Knelson has more than 3000 installations in over 70 countries worldwide.
Founded in 1978 by Byron Knelson, today the company employs around 140 people and is a world leader in gravity concentration technology for the global mining and minerals processing industries.
“The acquisition of Knelson strengthens FLSmidth’s offerings especially in the precious metals processing segment and supports our ability to serve all the customers’ needs for process technology, process know-how and complete integrated solutions,” said FLSmidth CEO Jørgen Huno Rasmussen.
Miner Lonmin, the world's third-largest platinum producer, said recently it had agreed a deal which could see South Africa's Shanduka Group investing 1.1 billion rand ($137 million) for control and management of its Limpopo division.
Lonmin said Shanduka had been offered the option of carrying out a feasibility study on the viability of it operating and developing the Limpopo division. If the outcome is successful, Shanduka could then raise the funds and subscribe to 50 percent plus one share in Lonmin unit Messina Platinum Mines Limited.
Lonmin said the deal with Shanduka, chaired by prominent politician-turned-businessman Cyril Ramaphosa, would help it meet mining charter targets that aim for 26 percent of the mining industry to be black-owned, but would also help it focus on its key Marikana operations.
Lonmin's Limpopo division includes the Baobab mine, where development activities have recently restarted after the asset was put on care and maintenance in 2009 following the global financial crisis.
The first shipment from Moatize Coal Mine, operated by Vale in Tete Province was on board the Orion Express vessel. The batch of 35,000 metric tons of thermal coal was transported for 575 km along the Sena-Beira Railroad, on various trains. This was the first operation of its kind along the railroad in 28 years.
The ship’s departure marks the end of the first phase of the implementation of Moatize Coal Mine, and means that Vale is now an influential operator and exporter in the Mozambican market. Vale has invested a total of US$1.658 billion in Moatize Coal Mine, which began mining activities in May of this year. In due course, the mine’s nominal production capacity will be 11 million metric tons of metallurgical and thermal coal per year.
Present in Mozambique since November 2004, Vale holds the concession for one of the biggest coal reserves in the world in Moatize, Tete Province, in the northwest of the country.
Moatize Coal Mine, currently Vale’s largest coal investment, is part of the company’s strategy of becoming a major global player in the sector. In addition to its project in Mozambique, Vale has coal operations and a portfolio of exploration projects in Australia and Colombia, as well as minority stakes in two joint ventures in China.
Canadian gold mining company Banro will start producing gold at its Democratic Republic of Congo mine on October 10, ramping up output to 120 000 oz/y by January, the company said recently.
Banro's Twangiza mine, in the eastern province of South Kivu where rebel groups operate, is the first new gold mining project in Congo for more than half a century.
Twangiza, high in the hills of eastern Congo, is the first of four mines the company plans to open on a 200 km gold belt, with a total production target of 400,000 ounces per year by 2014, Gary Chapman, the company's vice president of operations, told Reuters during a presentation at the site.
"We think we've got a similar belt to the Ashanti gold belt in Ghana," Chapman said, adding that the company was focused on maximising short term cash flow from Twangiza up to $120-million per year to finance the next three mines.
Banro will achieve this by focusing on cheaper-to-exploit oxide resources before moving to its sulphide resources in five years' time, Chapman said.
The company says Twangiza's confirmed oxide deposits total 1.3-million ounces and will cost less than $500/oz to produce. Chapman said the Twangiza project would cost about $209-million.
The Twangiza mine, which is employing more than 2 000 people in the construction phase, is one of very few major investments in eastern Congo, which has seen decades of instability as armed groups battle to control the area's mineral resources.
The country is gearing up for its second elections following the official end of a war in 2003, although some analysts fear the polls could lead to further problems.
"There are security issues but I don't think the problems are insurmountable," Chapman said.
Rio Tinto has re-entered the potash business, having agreed to team up with a division of Russia's Acron, a fertiliser producer, to hunt for the crop nutrient in Saskatchewan.
The Anglo-Australian miner, which will manage exploration and development of the joint venture (JV), said that potash was a "good fit with its current industrial minerals portfolio".
The venture is with a company called North Atlantic Potash, which will initially hold 60%, with Rio Tinto having the right to earn up to 80% over time, CEO of the smaller company, David Waugh, told Mining Weekly Online.
Rio Tinto sold its South American potash assets for $850-million to Brazil's Vale in 2009, as part of a drive to cut debt in the wake of the financial crisis. The deal included an exploration project near Regina, Saskatchewan.
The JV signals a move back into the world's biggest source of the crop nutrient for Rio Tinto.
"Rio Tinto believes that potash is a good fit with its current industrial minerals portfolio, which includes other agricultural products (Rio Tinto is the world’s leading supplier of borate fertilizers)," spokesperson Bryan Tucker said in an email.
Fertiliser demand and prices have climbed over the past year as high grain prices incentivise farmers to boost yields using chemicals such as potash.
Belarus Potash said earlier on Tuesday it will increase prices for granular potash for Brazilian customers by $30 to $580/t from next month.
The Rio Tinto-North Atlantic JV will cover nine permits, or about 241 000 ha, that extend from the eastern shore of Last Mountain Lake south-east to Broadview.
Waugh, who was appointed CEO earlier this month, said that production from the JV was still some way off.
"For the joint venture area in southern Saskatchewan, exploration is already underway. Assuming a deposit is delineated sufficient to support a solution operation, the time to final production is approximately five-plus years out," he said in reply to emailed questions.
North Atlantic had completed a seismic survey of the Foam Lake permit, and will start drilling the property before winter, it said.
Executives from Acron met with senior Saskatchewan officials including Premier Brad Wall in May, the StarPhoenix newspaper reported at the time.
Rio Tinto competitor BHP Billiton already has a strong presence in Saskatchewan, where it is carrying out a feasibility study on the multibillion-dollar Jansen project.
The fertilizer unit of Brazil's diversified mining company Vale will invest $15 billion through 2020, the director of the division said recently.
Brazil, one of the world's leading agricultural powerhouses, relies on imports for 80 percent of its fertilizer needs. The government considers the industry strategic and wants to become more independent through investment in local production of potash, phosphate and nitrogen sources.
Vale is in negotiations with state-run oil company Petrobras over extending its rights to explore and produce potash from the Carnalitas mine in a concession block that the oil company holds in the state of Sergipe.
Vale operates Brazil's biggest potash production facility in the region through a lease with Petrobras. But its Taquari-Vassouras mine is aging, and Vale would like to expand its reserves area to bring on new potash deposits.
South African gold miner AngloGold Ashanti will invest $250-million each year through 2016 to raise its Brazilian output of the precious metal by two thirds, its chief executive said recently.
The world's No. 3 gold producer plans to take output in Brazilian operations from 420,000 to 700,000 oz in that five-year period, Mark Cutifani told reporters at a mining conference sponsored by Brazilian miners' association Ibram.
The company plans to expand existing mines at Cuiaba in the Mato Grosso state and Corrego do Sitio in the important mining state of Minas Gerais, as well as the Serra Grande mine in the neighboring state of Goias.
Ibram data ranks Anglogold as Brazil's No. 2 gold producer behind rival Kinross.
Brazil is the world's number 12 gold producer but expects to surge up the ranks with a government forecast that output of the precious metal will reach 180 t by 2022 compared with 55 t in 2008.
Globally, the company will invest between $1.6-billion and $2.2-billion in the 2012-2013 period and it plans to raise production by one quarter to 5.5 million ounces by 2015, up from 4.4-million currently.
Canadian miner First Nickel Inc said it restarted production at its Lockerby nickel-copper mine in Ontario and made its first ore delivery to diversified miner Xstrata Plc's nickel business.
First Nickel, which has a life-of-mine offtake agreement with Xtrata Nickel, expects the mine to produce about 400 t/day in the fourth quarter this year.
First Nickel said it closed out a hedge position of 15-million pounds of nickel, 12-million pounds of copper for about $35-million.
The company expects to use these funds for the completion of the Lockerby project, it said in a statement.
An Alaska Superior Court judge has upheld the validity of temporary, revocable land and water use permits for mineral exploration at the Pebble copper-gold-molybdenum project in the Bristol Bay region of southwest Alaska.
Project opponents have waged a lengthy legal and political battle against the massive project, frequently citing risks to salmon and other fishery in the Bristol Bay
The lawsuit, Nunamta Aulukestai et al. v. State of Alaska DNR, was filed by a group of eight Bristol Bay native village corporations and several individuals in July 2009, claiming the Alaska Department of Natural Resources permits essentially granted the Pebble Limited Partnership and its predecessors the exclusive interest in state land and water as part of authorized mining exploration activities.
They argued a "public trust doctrine" prohibits the exclusive grant of certain public assets to private individuals or organizations. The plaintiffs also said Pebble Project exploration significantly impacts environmental resources and fish and wildlife habitat.
Superior Court Judge Eric Aarseth rejected all of the plaintiffs' constitutional claims, according to the Alaska's Office of the Attorney General. "He also found that evidence at [a December 2010] trial did not support the plaintiffs' claims that mineral exploration activities in the Pebble Project area were significantly impacting or causing long term harm to concurrent uses," the Attorney General's Office said.
The judge also ruled that permits authorizing mineral activities did not grant Pebble an exclusive use of state land and water.
While environmental permitting continues at its Haile gold project in South Carolina, Romarco Minerals looked at equity markets for project funding. The Toronto-based junior said that National Bank Financial and BMO Capital markets would lead a bought-deal financing to sell 70 million common shares of Romarco stock at C$1.15 a share.
The equity financing will dilute Romarco's shares outstanding to about 573 million while the proceeds of it will add significantly to those Romarco raised last year in a C$120 million bought-deal financing comprising 61 million shares at C$1.97.
At the end of the second quarter, June 30, 2011, Romarco said its cash balance was $63 million.
Among other things, Romarco said it will use the cash to pay for development of its Haile gold project in South Carolina, which earlier this year it estimated would cost $275 million to build.
Romarco is in the midst of environmental permitting at Haile, where reserves stand at 2 million ounces gold @ 2.06 g/t. This summer the U.S. Army Corps of Engineers, which is in part responsible for overseeing permitting of the Haile project, asked Romarco to complete an environmental impact statement (EIS) on a wetland portion of the project.
That request added about a year to Haile's development schedule, Romarco then reported, as the EIS would require more work to complete than an alternative environmental assessment process that the US Army Corps of Engineers could have instead requested.
In the meantime Romarco is looking into the high-grade underground potential at Haile. Recent drilling results highlighted that deeper dimension as Romarco hit as much as 33 meters @ 10.5 g/t gold and 88 meters 5.1 g/t Au in the Horseshoe area at Haile.
Orvana Minerals Corp. (TSX:ORV), through its wholly-owned subsidiary, Orvana Resources US Corp ("Orvana USA"), announces today the submission of the mine permit application for the Copperwood copper project to the Michigan Department of Environmental Quality (MDEQ) as prescribed in Part 632 of the Michigan Nonferrous Metallic Mining regulation. The project is located in Ironwood and Wakefield Townships, Gogebic County in the western Upper Peninsula, Michigan.
As defined in the Part 632 regulation, the review process takes about 7 months, but can be extended if regulators have observations, require clarifications, or modifications are necessary.
The Part 632 permit, which is the overall environmental permit, is one of 13 permits that are required to operate a mine in Michigan. Other key permits are the Chapter 30 Wetlands Fill Permit, the NPDES or wastewater discharge permit, and the Permit to Install - Air Discharge permit; it is planned to submit these three permit applications within the next 90 days. Twelve of the 13 permits are granted by the MDEQ and one of them is granted by the Michigan Department of Natural Resources.
Copperwood is a stratiform copper deposit hosted by the shales and siltstones of the lowermost Nonesuch Formation along the shallow-dipping southern limb of the westward-plunging Western Syncline. Copper occurs as very fine-grained chalcocite. Fully-diluted proven and probable reserves are 22.6 million tonnes of 1.37% copper and 4.2 grams per tonne silver and 4.6 million tonnes of 1.11% copper and 2.8 grams per tonne silver, respectively (total of 798 million pounds of contained copper and 3.5 million ounces of contained silver). It is planned to mine the deposit with underground room-and-pillar methods and process the ore by conventional flotation technology. Orvana has options to lease mineral rights on other stratiform copper deposits within the Western Syncline and announced NI 43-101-compliant indicated resources of 771 million pounds and inferred resources of 1,033 million pounds therein.
Australian firm Atlantic has signed an agreement to carry out a development study on bauxite exploration in Central Highlands, Vietnam.
The agreement was signed with the Institute of Mining Science & Metallurgy, under the Vietnamese Ministry of Industry and Trade.
The study will help Atlantic undertake a full feasibility study on the mine-rail-port bauxite supply chain solution to form a joint venture to develop and obtain the necessary approvals for the project.
Atlantic has proposed a large-scale bauxite mining operation, which will be developed in stages, and a 260km third-party access heavy haul rail line which will transport mined bauxite from the Central Highlands to the coast.
Global engineering group Hatch will assist Atlantic in undertaking the development study.
The Philippines' MacroAsia Corp can start production as early as next year at its Infanta nickel mine, part of a 1,113-hectare prospect it plans to develop with China's Jinchuan Group, once all required permits are in, a senior company official said recently.
The Infanta mine in southwestern Palawan province, with proven reserves of at least 88 million tonnes of nickel ore, can produce 1 million tonnes of nickel laterite annually, with all of the output likely to be sold to China, said Ramon Santos, vice president for MacroAsia mining operations.
"We could develop the mine within six to nine months," Santos told reporters after speaking at a media forum, adding the company can operate the mine initially for 10 years.
He said the Infanta mine, within the 1,113-hectare site in Brooke's Point, Palawan which MacroAsia is allowed to explore, could be extended if more reserves were found and nickel prices remain high.
The diversified Philippine firm signed a memorandum of agreement for joint investments in Palawan, estimated to reach $1 billion, with China's Jinchuan Group Ltd during President Benigno Aquino's recent state visit. The agreement involves the development of nickel mines in Palawan and construction of nickel processing facilities.
Philippine miner NiHAO Mineral Resources International said recently it had entered into a deal for nickel exploration with another local firm, with Glencore International AG to market output from the tie-up.
Apart from projects in the Philippines, the group could also explore for minerals in Indonesia and other Asian countries at a later date, NiHAO said.
Under the agreement NiHAO and AGP Industrial Corp would develop nickel mines in the Philippines, while Swiss firm Glencore would sell the nickel ores in the world market.
Glencore would be the "exclusive marketing agent for the JVC," NiHAO said in a statement to the stock exchange.
The three firms would form a joint venture within the next two months with an initial capital of $2 million.
"After the formation of the joint venture company (JVC), the parties shall identify prospective mining assets in the Philippines," NiHAO said. "The JVC may also venture into mining projects in Indonesia and other Asian countries."
Nihao has four mining claims in the Philippines covering nearly 21,000 hectares in the provinces of Misamis Oriental, North Cotabato and Antique south of the capital and Zambales up north.
One of its subsidiaries, Oriental Vision Mining Corp, has delivered eight shipments of lateritic nickel ore totalling 424,736 wet metric tonnes of limonite and saprolite ore from May to August to several Chinese buyers, and expects to deliver three more shipments in the remainder of the year.
In a bid to further reduce India's dependence on imported copper concentrate, Hindustan Copper Limited (HCL) has got the government's nod to develop a 5 million tonne per annum underground copper mine at Malanjkhand Copper Project in Madhya Pradesh. The company will fund the entire project, to the tune of $378 million.
HCL currently produces 2 million tonne per annum of copper ore through the open cast mine at Malanjkhand project. The project has extractable copper reserves of 141 million tonnes, which is more than 70 percent of the known reserves in the country.
Officials said the depth of the open cast mine has reached 340 metres and the residual life is estimated at less than seven years till March 2018. Below this depth, open cast mining is not financially viable as cost of ore production shall be more than that of an underground mine, officials said.
The project will take five years to complete and will be the biggest underground mine in India. The only copper ore producer in India, HCL's existing capacity caters for roughly three percent of amount needed for optimum utilisation of installed capacity for smelting/refining of copper in the country.
The company will also start expansion work at four of its mines by the end of this calendar year, taking the total number of mines under development, including Greenfield projects, to six.
Analysts said India suffers from a huge demand and supply gap of approximately 97 million tonnes. In fiscal 2011, India's refined copper capacity was around one million tonnes, requiring approximately 100 million tonnes of copper ore (assuming a copper content of one percent).
Hindustan Copper chairman Shakeel Ahmed is leading his company to build copper ore mining capacity of 12.41 million tonnes by 2017 fiscal, from the current 3.6 million tones.
The company has already applied for prospecting leases across the country for greenfield exploration and proposes to explore and develop these mines through a joint venture with global mining majors.
Chinese firm Minmetals Resources has entered into a binding agreement to acquire all common shares of Anvil Mining for a total value of $1.28bn.
The company has offered a price of C$8 (US$7.7) per share of Anvil Mining, under the terms of the agreement.
Minmetals will receive a termination fee of C$53m (US$51m), if the acquisition in not completed under the specified circumstances.
Minmetals has also agreed to pay a reverse break-fee of C$20m (US$19.3m) to Anvil, if it does not secure share holder approval within 80 days of the commencement of the offer.
Global miner BHP Billiton moved a step closer toward an estimated $20 billion to $30 billion expansion of its Olympic Dam copper and uranium mine, securing environmental approvals for the project in the deserts of southern Australia.
The project, to be developed in stages over 30 years, would nearly quadruple the mine's annual copper output to 750,000 tonnes to help meet demand from Asia, especially China where copper consumption is forecast to surge 6 percent this year.
The national government, together with the South Australia state government, have imposed more than 100 environmental conditions in approving the project, but are keen for it to go ahead because of the thousands of jobs it is expected to create.
BHP Billiton, expected to make a decision on final go-ahead for the project in mid-2012, now has to weigh up the conditions imposed as part of assessing its overall feasibility.
The conditions include a desalination project and pipes to bring water to the mine from over 300 kilometres away, and an environmental buffer zone of 140,000 hectares, roughly equivalent to an area the size of London.
Once fully expanded, the Olympic Dam mine would be on near-par with the massive copper lodes of South America, though it would take years before it came close to matching the copper production of BHP's giant Escondida lode in Chile.
It would also lift annual production of uranium from around 4,000 tonnes now to 19,000, more than is produced each year in all of Kazakhstan, the world's top producer.
The expansion would also extend the life of the mine from about 20 years to more than 100 years.
Mining giant BHP Billiton has unveiled plans to increase its Pilbara iron-ore production to 450-million tons a year, topping its competitor Rio Tinto in output.
BHP has an iron-ore production capacity of 155-million tons of iron-ore a year in the Pilbara, while rival Rio Tinto’s capacity is 225-million tons a year.
In March, the diversified miner approved a $7.4-billion capital investment to grow its Pilbara capacity to more than 220-million tons a year by 2014.
The expansion plans included the development of the Jimblebar mine and rail links, as well as the further development of infrastructure at Port Hedland, including two additional berths and shiploaders.
The miner would also invest in port blending facilities and rail yards to enable ore blending, the expansion of resource life, and to prepare for the future growth of the business beyond the inner harbour.
In an analyst site tour presentation released to the market, BHP said that it was currently studying ways to increase its production capacity to around 350-million tons a year, with outer harbour developments being investigated, while the growth tons would likely be sourced from the Jindi, Marillana I and II, and the Southern Flank operations.
The ultimate objective of reaching 450-million tons a year would see the expansion of the outer harbour, and would rely on a greenfield portfolio of mines.
BHP estimated that its production target of 350-million tons a year could be reached by 2020, with no official date given for the 450-million-ton-a-year target.
Rio Tinto has announced plans to increase its capacity to 330-million tons a year by 2015.
Iron-ore miners are spending billions to beef up output on the back of strong demand from emerging economies, especially China.
BHP Billiton said that global growth rates continued to improve over the last decade, despite the 2008 global financial crisis and added that decelerating Chinese growth rates were expected to be offset by the larger size of the Chinese economy.
McIlvaine Company
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