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Noble Group says 2017 loss may hit US$5B

TOP NEWS

Noble Group says 2017 loss may hit nearly US$5B

Noble Group Ltd. warned that it could book record annual losses in the range of US$4.78 billion to US$4.98 billion for 2017, with the fourth quarter loss estimated at US$1.72 billion to US$1.92 billion amid noncash losses from its mark-to-market derivatives portfolio. According to Reuters, the company also said it is making progress on securing a US$3.4 billion debt-for-equity swap, which is expected to give the company a sustainable capital structure.

Amplats reinstates H2'17 dividend on 3.89B rand FY'17 headline earnings

Anglo American Plc unit Anglo American Platinum Ltd. reinstated a cash dividend of 900 million South African rand, or 3.49 rand per share, for the second half of 2017, following full-year 2017 headline earnings of 3.89 billion rand, from 1.87 billion rand in the previous year. Amplats' net profit attributable to owners of the company for full-year 2017 also improved to 1.94 billion rand, from 632 million rand for full-year 2016. The news follows the U.S. Commerce Department's recommendation for tariffs on steel and aluminum imports from many countries.

China, Japan take stand on possible US tariffs on steel, aluminum

The Chinese government will take "necessary measures" to protect its rights should the U.S. government proceed with imposing global tariffs on steel and aluminum imports, the Financial Times wrote. Meanwhile, Japan's steel sector noted that the proposed tariffs will violate the principles of free trade and called on the U.S. government to make an appropriate decision on the matter. South Korea also expressed concerns over the U.S. Commerce Department's proposed tariffs, saying the move will hit its steel sector particularly the steel pipe industry, The Korea Herald wrote, citing a trade ministry official.

DIVERSIFIED

* Morgans Financial Ltd expressed alarm at South32 Ltd.'s "deteriorating" key assets and the miner's apparent rethinking of its entire regional operating model strategy, cutting its rating on the BHP Billiton Group spin-off. South32's first-half results confirmed Morgans' economic concerns for the diversified miner, with unit costs for most of its operations now at levels near or even above where they were when BHP owned them before South32 debuted on its own on the ASX in May 2015. The miner's plan to make its South African energy coal assets a stand-alone business also had Morgans worried.

* Institutional investors Plato Investment Management and Baring Asset Management are seeking a detailed explanation from BHP on its reluctance to unify the company's dual-listed structure, The Australian Financial Review reported. This follows activist shareholder Elliott Management's renewed push for the simplification of the mining giant's structure.

* Rio Tinto CEO Jean-Sebastien Jacques said the company's productivity drive will also set a foundation for the miner to pursue mergers and acquisition opportunities, The Australian reported. However, the executive added that the company will set a very high threshold on value for any acquisitions.

* Meanwhile, Jacques said the company is engaging with The Australasian Centre for Corporate Responsibility, the activist group demanding a review of Rio Tinto's Minerals Council of Australia membership, The Australian reported. The executive said that while industry bodies have roles to play, it does not mean Rio Tinto always agrees with their position and that the company has its own voice.

BASE METALS

* United Co. Rusal Plc reiterated that Crispian Investments Ltd. is not allowed to proceed with any sale of PJSC Norilsk Nickel Co. shares until at least after the next High Court hearing scheduled in early March. Crispian was looking to sell 6,313,994 Norilsk Nickel shares to Bonico Holdings Co. Ltd. at US$234.00 per share and US$23.40 per American depositary receipt. Meanwhile, Norilsk Nickel said its operations are not affected by the dispute between Rusal and Crispian and that Rusal was ordered by the court to compensate Norilsk Nickel for any loss that would arise from the relevant court order.

* Codelco's Radomiro Tomic Sulfuros expansion project underwent a restructuring that reduced the original investment by US$3.2 billion to US$2.2 billion, due to the decision to outsource the construction of a desalination plant, El Mercurio reported. The restructured project is expected to begin operations in 2024.

* Indonesia's mining ministry issued Freeport-McMoRan Inc.'s PT Freeport Indonesia an export quota of about 1.25 million wet tonnes of copper concentrate up to Feb. 15, 2019, Reuters reported, citing a ministry official. The government also issued an export permit to Medco Energi Internasional unit Amman Mineral Nusa Tenggara, allowing it to export 450,826 tonnes of copper concentrate from its Batu Hijau mine over the same period.

* Australian Mines Ltd. signed an off-take agreement term sheet with electric vehicle battery manufacturer SK Innovation to sell 100% of the expected cobalt sulfate and nickel sulfate output from its SCONI cobalt-nickel-scandium project in Queensland, Australia, for an initial seven-year term. Additionally, SK Innovation secured an option to acquire up to a 19.99% stake in Australian Mines by purchasing 669 million shares at 12 Australian cents apiece.

PRECIOUS METALS

* Bluebird Merchant Ventures Ltd. and Southern Gold Ltd. are looking to reopen South Korean gold mines Gubong and Kochang that closed decades ago, Reuters reported. Bluebird Merchant CEO Colin Patterson said the company plans to report on the feasibility of resuming the mines' operations by the end of the second quarter.

* Acacia Mining plc confirmed media reports that Chinese buyers are interested in its assets in Tanzania, amid talks with the government to resolve outstanding issues that have forced it to idle production, crippling its cash flow. The company, which is majority-owned by Barrick Gold Corp., said it had received expressions of interest in some or all of its Tanzanian operations.

* Polymetal International Plc increased its stake in the Prognoz silver project to 50% by acquiring a further 45% stake in Polar Acquisition Ltd. for US$72 million in shares. The other 50% of Prognoz is owned by Garden Ring Capital, a Russian private equity group.

* Red 5 Ltd. intends to make a conditional off-market takeover of Bullseye Mining Ltd., an unlisted gold miner based in Western Australia. The company will offer 1 fully paid ordinary share for every 5 Bullseye shares held, valuing the target at about A$4.0 million.

* Equus Mining Ltd. acquired the precious and base metals-prospective Cerro Diablo project, about 40 kilometers north-northwest of the company's flagship Los Domos gold-silver project in Chile.

* Millennium Minerals Ltd. awarded an initial three-year mining contract to GBF Underground Mining Co. for the development of the Bartons underground mine, part of its Nullagine gold project in Western Australia. GBF will mobilize to Nullagine later in the month, with underground mining set to commence at Bartons in March.

* St. Barbara Ltd. entered gold hedging contracts for production of 35,000 ounces from its Simberi project in Papua New Guinea, to be delivered in monthly installments from July 2018 to December 2019 at a forward price of A$1,750 per ounce.

BULK COMMODITIES

* Russian billionaire Oleg Deripaska intends to step down from his position as president of aluminum producer United Co. Rusal Plc and power company En+ Group plc, according to a report by Russian newspaper Kommersant. Deripaska wants to take a step back from management of the two Russian industrial giants and focus on developing other assets, particularly the GAZ automotive group. He will be succeeded as president at EN+ by Maxim Sokov, who currently manages Rusal's stake in Norilsk Nickel, while at Rusal, he will be replaced by CFO Alexandra Buriko. Bloomberg wrote that this will be the first time a major Russian commodities player is led by a woman.

* BHP Billiton Group's iron ore division is facing a potential labor action, with a union representing tugboat workers at Port Hedland planning to file a notification of dispute against the miner over annual leave and working conditions at the port, The Australian Financial Review reported.

* Poland's coal imports from the U.S. surged five-fold to 839,000 tonnes in 2017 amid shortages in the domestic market, Reuters wrote, citing a state-run agency. Coal output from Polish mines, meanwhile, dropped 6.5% during the year to about 66 million tonnes.

* U.S. Department of Commerce Secretary Wilbur Ross recommended that President Donald Trump take "immediate action" to impose tariffs on imports of steel, a move that could be a boon to U.S. metallurgical coal producers. Ross' report recommends that Trump takes one of three actions: a global tariff of 24% on all steel imports, a tariff of at least 53% on steel imports from a targeted list of 12 countries or a quota on all countries' steel imports capped at 64% of their 2017 sales into the U.S. The remedies aim to increase domestic steel production from the current 73% of capacity to an approximately 80% operating rate.

* India's steel ministry is urging the country's electrode makers to cut prices for smaller steel firms as local prices surged about 500% after China shuttered some 30% of its graphite electrode production, Reuters reported. Graphite electrodes are used to melt scrap in electric arc furnaces to produce new steel and India is also looking at introducing an export tax to boost domestic supply.

* Nippon Steel & Sumitomo Metal Corp. is concerned that the recent steel import cuts proposed by the U.S. Department of Commerce may result in oversupply in the Asian markets, Reuters reported, while China said that it reserves the right to retaliate if the "groundless" tariffs are implemented by the U.S. government, Bloomberg News reported. Australian Prime Minister Malcolm Turnbull is expected to request President Trump to leave his country out of the new steel and aluminum quotas, The Australian Financial Review reported, and Rio Tinto chief executive Jean-Sébastien Jacques will travel with Turnbull to the White House to plead the case.

* Century Aluminum Co. and AK Steel Holding Corp. supported the recommendation by the U.S. Department of Commerce to impose tariffs on steel imports. Century Aluminum CEO Michael Bless said the report shows the administration recognizes that swift action is necessary to stop the surge of aluminum imports from affecting the industry. AK Steel CEO Roger Newport, meanwhile, urged prompt action on the recommendations.

* South Korea opposed the U.S. Department of Commerce's recommendation to impose tariffs on steel imports, following an emergency council meeting held by the Ministry of Trade, Industry and Energy with the country's key steelmakers, The Korea Herald reported.

* Tata Steel Ltd.'s acquisition of Bhushan Steel Ltd. is seen as a strategic fit for the company, despite it allegedly overpaying for the distressed steelmaker, The Economic Times of India reported.

* Strike Resources Ltd. entered into a nonbinding memorandum of understanding with China-based Dalian Huarui Heavy Industry Group Co. Ltd. in connection with the former's Apurimac iron ore project and associated rail and port infrastructure in Peru. The companies will work toward the advancement of the project, including the Peruvian government sponsored multiuser Andahuaylas railway, which would link the Apurimac project with the minerals export port of San Juan de Marcona.

SPECIALTY

* PJSC NOVATEK won the public auction for PJSC Alrosa's gas assets, with an offer of 30.3 billion Russian rupees. Separately, the company selected 33 applications for the next stage of a 1.5 million-ruble contest for the best solution to restart underground mining at the Mir deposit, part of its Mirny Division in Russia, Mining Weekly reported.

* Zimbabwe will forge a diamond processing deal with Botswana within the next three months, News24 wrote, citing a report from a Zimbabwean newspaper.

* Petra Diamonds Ltd. swung to a net loss of US$117.7 million, or 17.55 cents per share, in the first half of fiscal 2018, from a profit of US$35.2 million, or 5.20 cents per share, in the corresponding period of fiscal 2017, due to a strike at its South African operations in the first quarter, the inability to sell output from the Williamson diamond mine in Tanzania, and a strengthened South African rand against the U.S. dollar. Revenue for the period, however, remained in line with year-ago figures at US$225.2 million.

* Latin Resources Ltd. signed a binding term sheet with Kontrarian Resources Fund No. 1 to acquire five lithium concessions covering 44,177 hectares in Argentina's San Luis province that are near the company's existing concession applications.

INDUSTRY NEWS

* To give a boost to U.S. metal production, the Department of the Interior published a draft list of critical minerals in the Federal Register as called for in a recent executive order by President Donald Trump. The draft list identifies 35 minerals, metals and groups of metals that are critical to the U.S. economy and military but may be vulnerable to dependence on foreign supplies.

* The South African Chamber of Mines agreed to postpone a High Court challenge against new mining regulations to allow parties to engage in talks with new President Cyril Ramaphosa. The High Court hearing was set for Feb. 19 to Feb. 21.

* Tropical Cyclone Kelvin hit the north coast of Western Australia, causing floods and forcing the closure of the Great Northern Highway that links Port Hedland with Kimberley region and Perth, Reuters reported. The cyclone is forecast to move south through East Pilbara, which produces an estimated US$15 billion of mining exports per year.

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