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BHP Q1'18 copper output up 14% despite Escondida delays

TOP NEWS

BHP Q1'18 copper output up 14% despite Escondida delays

BHP Billiton Group reported an increase in copper output for the September quarter and left its guidance unchanged despite the delayed ramp-up of the expansion of the Escondida mine in Chile. Overall copper production increased 14% to 404,000 tonnes, with the increases from Escondida and the South Australia-based Olympic Dam mine partially offset by a decline in output from the Pampa Norte mine in Chile. Meanwhile, iron ore production in the September quarter dipped 3% year over year to 55.6 million tonnes on an attributable basis due to an expected reduction in output from the Western Australian operations.

SEC files fraud charges against Rio Tinto, former executives

The U.S. Securities and Exchange Commission charged Rio Tinto, former CEO Thomas Albanese and former CFO Guy Elliott with fraud for allegedly violating the reporting, books and records, and internal controls provisions of federal securities laws related to an unsuccessful acquisition of coal assets. The executives are accused of inflating the value of coal assets acquired in Mozambique for US$3.7 billion, which were sold a few years later for US$50 million.

Vale seeks partner for New Caledonia nickel ops

Vale SA is working with Scotiabank for the potential sale of a stake in its New Caledonia nickel operations, the Financial Times reported, citing people familiar with the matter. The miner has held talks with several Chinese groups, including Shenzhen-based Gem Co., which recycles and refines nickel cobalt for use in batteries.

DIVERSIFIED

* Rio Tinto said the SEC's case brought against the company and its former executives is unwarranted and when all the facts are considered by the court, or if necessary by a jury, these claims will be rejected. Meanwhile, the U.K.'s Financial Conduct Authority imposed a financial penalty on the miner of around £27.4 million for breaching the Disclosure and Transparency Rules in connection with an impairment review for its 2012 interim results.

* Australian explorer Ardea Resources Ltd. plans to evaluate a potential demerger of its noncore gold and base metals projects. The company's key focus is its Kalgoorlie project in Western Australia, which is prospective for both nickel and cobalt, and it recently raised A$5.5 million to accelerate drilling to define a reserve and upgrade the resource for the KNP cobalt zone.

BASE METALS

* BHP is looking at accelerating its phase-two expansion to 200,000 tonnes of nickel sulfate per annum after receiving strong interest from potential customers. The company previously approved funding of US$43.2 million for a project at the Kwinana refinery in Western Australia that will allow the mining heavyweight to produce an initial 100,000 tonnes per annum of nickel sulfate from 2019. BHP expects to complete stage one in April 2019, with major construction activities starting this November.

* Metals X Ltd. expects to reach its production target of 40,000 tonnes per annum at the Nifty copper mine in Western Australia in the second quarter of 2018, Managing Director Warren Hallam told delegates at the Australian Nickel Conference in Perth.

* Australian copper-gold explorer Bryah Resources Ltd. marked its first day as a publicly listed company with gains of up to 25%. The newly listed company traded as high as 25 Australian cents not long after the ASX started trade.

* The auto industry is shifting with the revolution in electric vehicles, a trend that is expected to drive up global demand for metals used in batteries, according to speakers at the 121 Mining Investment conference in Hong Kong. Commodity Discovery Fund founder and Chief Investment Officer Willem Middelkoop said copper and nickel will benefit greatly from the growing trend.

* Speaking at the Paydirt nickel conference in Perth, Western Australian Mines and Petroleum Minister Bill Johnston said the state is committed to reducing red tape and regulatory duplication to deliver a more effective public sector and support the nickel industry, Mining Weekly reported.

* Copper producer KGHM Polska Miedz SA does not expect any significant impact on sales or core earnings from the recent breakdown of a smelter in the city of Glogow, Reuters reported, citing CEO Radoslaw Domagalski-Labedzki. The miner last week said that an accident at the smelter would result in production dropping by 14,000 tonnes.

* An updated resources estimate for Myanmar Metals Ltd.'s 85%-owned Bawdwin lead-zinc-silver-copper property in Myanmar pegged inferred resources totaling 41.4 million tonnes grading 7.5% lead, 3.5% zinc, 0.33% copper and 178 g/t of silver, using a cutoff of 2.0% lead.

* Consolidated Tin Mines Ltd. released an updated JORC-compliant resource estimate for the Kaiser Bill deposit within the larger Einasleigh copper project in Queensland, Australia. The deposit is now estimated to host total resources of 15.5 million tonnes at 0.93% copper and 7 g/t of silver for 144,000 tonnes of copper and 3.4 million ounces of silver, using a cut-off grade of 0.5% copper.

* Ferrum Crescent Ltd. revised its strategy for exploration and evaluation for its Toral lead-zinc project in Spain, which will allow the company to produce a maiden JORC-compliant resource estimate. The company is also undertaking a cost review at the project.

* Coro Mining Corp. entered a binding letter of intent, through its local subsidiary, to acquire the Naguayan property in Chile from Cia Minera Naguayan SCM. The property comprises a block of exploitation claims totaling 1,075 hectares located northeast and east of Coro Mining's 75%-owned Marimaca copper project.

PRECIOUS METALS

* Newcrest Mining Ltd. will invest A$93 million to expand the West Dome open pit at its Telfer gold mine in Western Australia. The investment is estimated to extend the life of Telfer's open pit by around four years, until about 2023.

* Western Australia's Exploration Incentive Scheme may be on the chopping block after the opposition blocked the Labor government's plan to hike the royalty rate levied on the gold industry. While the government originally announced that it planned to continue the scheme, it is now looking at possibly axing it after the Liberal Party voted against increasing the gold royalty rate, Mines Minister Bill Johnston told reporters on the sidelines of the Australian Nickel Conference.

* Primary Gold Ltd.'s pre-feasibility study for its Coolgardie gold project in Western Australia pegged a net present value, discounted at 8%, of A$14.8 million and a two-month payback period. Revenue, at a gold price of A$1,600 per ounce, is expected at A$104.3 million during the 28-month mine life.

* Petropavlovsk Plc produced 104,000 ounces of gold in the third quarter, compared to 102,400 ounces a year ago. The company reiterated its full-year production guidance of 420,000 ounces to 460,000 ounces.

* Jaguar Mining Inc. lowered its full-year 2017 gold production forecast to between 87,000 ounces and 92,000 ounces of gold, from about 95,000 ounces of gold previously announced. The reduction was mainly due to lower-than-anticipated production from the Turmalina mine in Brazil.

* Stratex International Plc sold its 13.7% stake in GoldStone Resources Ltd. to institutional investors at 1.6 British pence per share for a total of £550,000.

* LeaGold Mining Corp.'s measured and indicated resource estimate at its Bermejal underground project surged 94% to 9.9 million tonnes at 6.2 g/t gold for about 2 million contained ounces. The inferred resource stands at 4.8 million tonnes at 5.4 g/t gold for 820,000 contained ounces.

* First Majestic Silver Corp.'s third-quarter silver equivalent production from its six operating silver mines dropped 12% year over year to about 4 million ounces.

* Osisko Gold Royalties Ltd. upsized its recently announced bought-deal offering of convertible senior unsecured debentures to C$284 million from C$260 million.

* Superior Gold Inc. started prestripping activities Oct. 12 at its developing Hermes gold project in Western Australia. The company expects initial production by the end of the year and commercial production at the project in the first quarter of 2018.

* Kerr Mines Inc. is acquiring exploration permits covering new exploration targets at its Copperstone gold project in Arizona, potentially adding 541 hectares to the company's permitted 4,775-hectare project.

BULK COMMODITIES

* Botswana-focused coal developer Minergy Ltd has decided to seek a U.K. listing instead of Johannesburg due to negative investor sentiment attached to South Africa, MiningMx reported, citing CEO Andre Bojé.

* The U.S. Department of Justice stepped into Kobe Steel Ltd.'s data-falsification scandal, as a new report claimed that the steelmaker's plants had been rigging product quality data for decades. Kobe Steel said its U.S. subsidiary received a request from the Justice Department seeking documents related to compromised products sold to U.S. customers.

* Evraz Plc's consolidated crude steel output in the third quarter increased 5.9% over the prior quarter, to 3.5 million tonnes. Production of steel products, net of rerolled volumes, improved 4.4% to 3.1 million tonnes in the quarter. Output of iron ore products dropped 7.5% quarter over quarter to 4.2 million tonnes.

* Nanjing Iron & Steel Co. Ltd. expects its nine-month net profit to reach 2.05 billion Chinese yuan, up 800% year over year, Securities Times reported.

* A conceptual engineering study into an expanded plant for Avenira Ltd.'s Baobab phosphate project in Senegal estimated CapEx of US$53.4 million to increase nameplate capacity from the current 500,000 tonnes per year to 1 million tonnes per year of high-grade phosphate rock concentrate.

* Poland's PGG expects its coal output to surpass 30 million tonnes this year, Reuters reported, citing the group's head Tomasz Rogala.

* Seven miners were killed while another went missing after part of an illegal coal mine in Turkey's Sirnak province caved in, Reuters reported, citing a government spokesman, Bekir Bozdag.

* Aluminum prices are set to rise as the Chinese government plans to close a tenth of aluminum smelting capacity by year-end to curb pollution and tackle overcapacity, Reuters reported.

SPECIALTY

* Anglo American Plc said the provisional rough diamond sales for its De Beers SA unit dropped to US$370 million in the eighth sales cycle of the year from US$507 million in the seventh sales cycle and US$494 million in the eighth cycle of 2016.

* Talks between Chilean authorities and Sociedad Quimica y Minera de Chile SA to resolve a legal dispute regarding the company's lithium lease have ended with no agreement, leaving the fate of the company's lease of lithium reserves to a judge, Reuters reported.

* Sheffield Resources Ltd. said Taurus Mining Finance Fund and Taurus Mining Finance Annex Fund agreed to arrange and underwrite a US$200 million project development facility, comprising a US$175 million term loan facility and a US$25 million contingent instrument facility, which will be used to support the development of Sheffield's Thunderbird mineral sands project in Western Australia.

* Peninsula Energy Ltd. decided to exit and sell its 74% interest in the Karoo uranium projects in South Africa through an active process over the remainder of the year.

* NRG Metals Inc. entered into a letter of intent with China-based Chengdu Chemphys Chemical Industry Co. Ltd. to advance exploration and development of the Hombre Muerto North lithium project in Argentina.

* Canada Rare Earth Corp. entered into a nonbinding letter of intent to form a joint venture with the undisclosed owners of an advanced, prospective rare earth property in South America.

* Southern China's Jiangxi province unveiled 19 measures to tighten control over the whole supply chain of rare earths, jrj.com reported. Only companies with a production quota are allowed to engage in mining, imports and sales.

INDUSTRY NEWS

* The British government will begin a consultation for a proposed amendment of policies related to mergers in Britain, such as those that raise national security concerns. The proposal, which was set out by U.K. Business and Energy Secretary Greg Clark, calls to lower the threshold of mergers that the government can intervene in to those with a U.K. turnover of over £1 million.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.