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Trump leans toward 24% global tariff on steel imports

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[Infographic]: 2021 World Exploration Trends

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Green energy revolution — Boost for industrial metals demand


Trump leans toward 24% global tariff on steel imports

TOP NEWS

Report: Trump leans toward 24% global tariff on steel imports

U.S. President Donald Trump favors a global tariff of 24% on steel imports, the harshest of the three actions recently recommended to him by the Department of Commerce, Bloomberg News reported. Trump is also considering a 10% duty on all aluminum imports, up from the 7.7% proposed by the department, according to the report, which cited three sources familiar with the matter. Trump has until April 11 to make a final decision on the tariff on steel imports and until April 19 with regard to aluminum.

Rusal's Q4'17 net profit slides 31.8% YOY to US$440M; Deripaska to step down as President

United Co. Rusal Plc's fourth-quarter 2017 profit slid 31.8% year over year to US$440 million from US$645 million in 2016 when it recorded a US$299 million gain from the sale of its Alpart alumina refinery in Jamaica to China's Jiuquan Iron and Steel (Group) Co. Ltd., even as revenue increased 35.4% on a yearly basis to US$2.75 billion. Rusal added that Oleg Deripaska will be stepping down as president, effective March 15. CEO Vladislav Solovyev will become president, while the CEO role will be taken by current CFO Alexandra Bouriko, who will become the first woman to lead one of Russia's largest mining companies.

Oyu Tolgoi considers power supply options amid uncertain Tavan Tolgoi timing

Management of the Oyu Tolgoi copper mine in Mongolia plans to consider alternative power supply options for the operation, noting that the proposed power plant at the nearby Tavan Tolgoi coal mine is not likely to be completed in time, Reuters reported. Majority owner Rio Tinto is seeking a new power plan for Oyu Tolgoi after the Mongolian government canceled a power sector cooperation with the mining giant last week.

DIVERSIFIED

* Some of the world's largest private equity firms are assessing BHP Billiton Group's shale assets, The Australian Financial Review wrote. Expectations are also firming that the mining major will return the proceeds from the sale, estimated at more than US$10 billion, to shareholders.

* Rio Tinto, which recently approved a further US$368 million investment to advance its Resolution copper project in Arizona, is continuing to invest in the U.S., CEO Jean-Sébastien Jacques said. "We are committed to a strong future in the United States through our existing operations and new projects like Resolution, one of the most significant and valuable undeveloped copper deposits in the world," he said.

BASE METALS

* Rusal is preparing to trigger a "shootout" scenario to end a shareholder conflict over control of Russian metals and mining giant PJSC Norilsk Nickel Co. Rusal's billionaire owner, Oleg Deripaska, who holds a 28% stake in Norilsk Nickel, sought an injunction in a London court Feb. 16 to stop Roman Abramovich's Crispian Investment Ltd. from selling his minority share in the company to rival Vladimir Potanin's Whiteleave Holdings Ltd., triggering a stalemate. In a decisive move to break the deadlock, Rusal proposed activating a "shootout" protocol, by which either party can buy out the other's stake at a price not less than the six-month weighted average price of the shares of Norilsk Nickel.

* Osisko Metals Inc. completed the previously announced acquisition of Pine Point Mining Ltd. in an all-share deal. Newly formed company Generation Mining Ltd. will hold all of the assets and liabilities of Pine Point except the Pine Point zinc-lead project in Canada's Northwest Territories.

* Chile's President-elect Sebastian Pinera seeks to create two new management units at Codelco to improve operations, his choice for mining minister Baldo Prokurica told local daily La Tercera. The state-owned copper producer required more investment, strong management and improved efficiency, Pinera said.

PRECIOUS METALS

* Lundin Gold Inc. seeks to raise US$400 million from a private placement to fund the development of its Fruta del Norte gold project in Ecuador. Newcrest Mining Ltd. is taking part in the offering and will invest US$250 million to own 27.1% of Lundin Gold. Both companies also agreed to form a joint venture to explore eight concessions near Fruta del Norte. Newcrest can earn up to a 50% interest in the joint venture by spending US$20 million over five years.

* Northam Platinum Ltd.'s 6E equivalent refined metal production in the six months ended Dec. 31, 2017, totaled 291,407 ounces, up 6.4% on a yearly basis, reflecting a sound performance from the group's operations. The South African producer's loss in the half, however, widened to 283.8 million rand from 226.6 million rand recorded a year earlier. Meanwhile Northam, which is in the midst of spending 5.5 billion rand on growth projects, plans to create 6,500 new mining jobs in the next four to five years, Mining Weekly reported.

* Centerra Gold Inc.'s fourth-quarter 2017 gold production dropped 13% year over year to 216,752 ounces, while output for the full year jumped 31% to 785,316 ounces. The full-year result was in line with the company's revised guidance of between 785,000 and 845,000 ounces, an increase from between 715,000 and 795,000 ounces.

* Teranga Gold Corp. posted record gold production of 233,267 ounces in 2017 and booked a 38% rise in the year's attributable full-year net profit to US$31.9 million.

* South Africa's National Union of Mineworkers said Pan African Resources Plc plans to lay off 1,722 workers at its Evander gold mine in the country due to deteriorating infrastructure at the site, high operating costs, labor costs and a weak gold price, Reuters reported. The mine has a total workforce of 1,812 people.

* Orion Metals Ltd. entered into an agreement with PVW Resources NL, allowing the latter to earn up to a 90% interest in the seven gold and rare earth elements exploration tenements in the Tanami West project area in Western Australia by sole-funding and carrying out exploration activity over the tenements.

BULK COMMODITIES

* The U.S. Department of Defense expressed support for the Trump administration's bid to implement restrictions on aluminum and steel imports, although it would prefer targeted tariffs and a delay for import curbs on aluminum given the plan's potential impact on the country's allies, Reuters reported.

* U.S. aluminum producer Century Aluminum Co. intends to begin restarting idled production lines at its Kentucky smelter and recall about 350 workers if President Donald Trump implements aluminum import curbs, Reuters reported. The company could probably bring the facility back to full output of 265,000 to 270,000 tons annually by early 2019, co-CEO Michael Bless said.

* Goldman Sachs analysts valued Riversdale Resources Ltd., which plans to raise A$100 million in its initial public offering on the Australian Securities Exchange, at between A$723 million and A$1 billion, The Australian Financial Review's Street Talk blog reported. The company's main asset is the Crowsnest Pass Complex, which includes the Grassy Mountain coking coal project.

* A source told Press Trust of India that JSW Steel Ltd. is close to buying Italian steel company Aferpi for 6 billion rupees, with the deal expected to be finalized by the end of March or the start of April. Aferpi, which is the second-largest steelmaker in Italy, makes specialty long products for railways, bars for auto industry parts, among others.

* Tata Steel Ltd. is requesting taxpayer support for a £60 million project to upgrade a production line at its Port Talbot steelworks in the U.K., The Sunday Times reported. The project involves modernizing the facility's continuous annealing process line to make lighter and stronger galvanized steels.

* Blake Trading, which is majority-owned by a Jindal Steel & Power Ltd. subsidiary, plans to develop a second iron ore mining operation in Namibia, Reuters wrote. Mining at the new facility will start with the processing of 1 million tonnes of ore per year, increasing to 10 million tonnes thereafter.

* South African power producer Eskom confirmed that the Optimum coal mine, which supplies thermal coal to the company's Hendrina Power Station in Mpumalanga, started business rescue proceedings. Eskom said Optimum failed to make contractual deliveries to the power station in January, leading it to impose a penalty, which exceeded the invoice amount from the Optimum coal mine. The mine has been unable to make coal deliveries since workers downed tools Feb. 22.

* Meanwhile, South Africa's National Union of Mineworkers said its members who work at the Optimum coal mine were not paid on time and will not return to work, Reuters reported. The NUM members will remain on strike until their wages are paid and they get more information on the mine's future.

SPECIALTY

* Lucara Diamond Corp. agreed to purchase Clara Diamond Solutions Corp., whose primary asset is a secure, digital sales platform that will transform how rough diamonds are sold, in exchange for 13.1 million shares. Lucara plans to commercialize the Clara platform using a selection of diamond production from its Karowe mine in Botswana.

* W Resources Plc signed agreements with Wolfram Bergbau und Hütten AG and a supplier to U.S. tungsten markets for the off-take of 80% of the planned tungsten concentrate output at the La Parrilla mine in Spain.

* Zimbabwe resumed diamond auctions following a yearlong break and expects to sell about 1.6 million carats of diamonds over the next two months, Mining.com reported, citing the country's mines minister Winston Chitando.

* The Indian government is considering whether to encourage state-owned mining and mineral processing companies to set up joint ventures to acquire strategic mineral assets overseas, Mining Weekly reported, citing senior government officials. These strategic metals include rare earths and battery minerals, such as lithium.

INDUSTRY NEWS

* Things are looking up for the mining industry. The market capitalization of listed mining companies is double what it was two years ago, and 2017 saw the first annual increase in exploration budgets for nonferrous metals after four consecutive years of declining expenditure, according to the Metals & Mining Research team at S&P Global Market Intelligence. Having plumbed an amount in 2016 that was barely one-third of the record-high US$21.5 billion allocated in 2012, the total amount budgeted to nonferrous metals exploration reached an estimated US$8.4 billion in 2017.

* According to a survey by Canada's Fraser Institute, Finland outranked Saskatchewan as the top jurisdiction for mining investment, Mining Weekly reported. Several Australian mining territories' rankings fell in the survey, with Association of Mining and Exploration Companies CEO Warren Pearce attributing the drop to increased red tape in Australia coupled with regulatory uncertainty and possible royalty hikes.

S&P Global Market Intelligence is owned by S&P Global Inc.

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.