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Suitors said to approach Rio Tinto for remaining Australian coal assets

TOP NEWS

Rio Tinto receives approaches for remaining Australian coal assets

A few weeks after Rio Tinto agreed to sell some Australian coal operations for up to US$2.45 billion, the global mining giant received approaches for its remaining coal mines in the country, people with knowledge of the matter told Bloomberg News. According to the sources, the company is considering options for its stakes in the Hail Creek and Kestrel coking coal mines in Queensland, including a potential sale that could fetch up to US$1.5 billion. However, a formal sale process will not start until Anglo American Plc makes a final decision on whether to off-load its coking coal mines in Australia, the sources added.

Production suspensions weigh on Glencore's FY'16 output

Glencore Plc's total production in 2016 was in line with the guidance, with year-over-year drops in copper, zinc and coal output reflecting suspensions at various operations. Copper production dropped 5% year over year to 1.4 million tonnes due to production suspensions at its African copper assets, partly offset by improved grades and volumes at its South American assets.

Nickel prices tipped to rise after Philippine mine closures

Analysts predict that global nickel prices will rise due to potential supply disruptions from the Philippines as the government ordered the closure of 23 mining operations in the country amid an environmental crackdown, Reuters reported, citing the country's Environment and Natural Resources Secretary Regina Lopez. Most of the mines ordered for suspension are nickel producers that account for about 50% of the country's annual output. The government also suspended five other mines, including OceanaGold Corp.'s Didipio gold project, which the company claimed was illegal.

BASE METALS

* Grupo México SAB de CV posted a net profit of US$95.9 million for the fourth quarter of 2016, swinging from the year-ago loss of US$17.1 million, Reuters reported. Revenue for the miner increased 3.5% year over year to US$2.1 billion in the three months.

* Labor contracts with fewer benefits for new employees is the latest issue causing conflict between BHP Billiton Group's Escondida copper mine in Chile and its union, which voted to stage a strike at the world's largest copper mine, daily La Tercera reported.

* A feasibility study for Panoramic Resources Ltd.'s Savannah nickel-copper-cobalt project in Western Australia estimated that the mining of Savannah North will extend the mine life to 10.25 years. Annual metal-in-concentrate production is expected at 9,700 tonnes of nickel, 5,000 tonnes of copper and 670 tonnes of cobalt for total life-of-mine production of 99,200 tonnes of nickel, 51,500 tonnes of copper and 6,900 tonnes of cobalt.

* Operations have been suspended at Mitsubishi Materials Corp.'s majority-owned Gresik copper smelter in Indonesia since Jan. 19 amid a worker strike, Metal Bulletin reported, citing a company executive.

PRECIOUS METALS

* Harmony Gold Mining Co. Ltd. declared an interim dividend of 50 South African cents per share. The company reported a net profit of 1.54 billion South African rand in the first half of its fiscal 2017, compared to a loss of 445 million rand a year earlier. The company produced 553,862 ounces of gold in the six months that ended Dec. 31, 2016, compared to 513,576 ounces produced in the first six months of 2016, while gold sales increased to 544,086 ounces from 511,198 ounces.

* An updated feasibility study for Guyana Goldfields Inc.'s Aurora gold mine calculated a net present value of US$850 million, at a 5% discount rate. The optimized study also boosted the project's mineral reserves by 15% over the previous estimate, to 3.5 million ounces gold, net of depletion. The project will produce 220,000 ounces of gold over a 15-year mine life at an average cash cost of US$612 per ounce.

* Royal Gold Inc. booked net income of US$28.1 million in the second quarter of its fiscal 2017, increasing from US$15.1 million reported in the year-ago period. The improvement was driven by a 9% year-over-year increase in revenue, which came in at US$107.0 million.

* The government of Mali agreed to pay Hummingbird Resources Plc about US$11 million for an additional 10% stake in the Yanfolila gold project.

* StratMin Global Resources Plc executed binding heads of agreement with Signature Gold Ltd. to acquire all of the latter's issued share capital. StratMin will issue up to £9.5 million worth of equity, to be allocated pro rata to Signature shareholders.

* Anglo American Platinum Ltd. launched a chrome recovery plant at its Amandelbult operation in South Africa to produce commercial-grade chromite concentrate.

* Luna Gold Corp. and JDL Gold Corp. agreed to merge and establish a multiasset mining company to be called Trek Mining Inc., which will be well funded and strongly positioned to advance the Aurizona gold project in Brazil to production. Under the terms, Luna Gold shareholders will receive 1.105 JDL shares for each share held.

* Orca Gold Inc. struck a deal to acquire Kinross Gold Corp.'s two wholly owned exploration companies, which collectively own the Morondo and Korokaha North exploration licenses, along with five exploration license applications covering 2,268 square kilometers in Ivory Coast.

* Nickel One Resources Inc. signed a definitive agreement with Finore Mining Inc. to fully acquire the Lantinen Koillismaa platinum group elements-copper-nickel project in Finland.

* PJSC Polyus' controlling shareholder, Polyus Gold International Ltd., priced its US$800 million 5.250% notes due Feb. 7, 2023. The closing and settlement of the notes is expected Feb. 7.

* Employees who had staged a sit-in at Randgold Resources Ltd.'s Tongon gold mine in Ivory Coast returned to work Feb. 1, after management and local and central authorities negotiated a settlement.

BULK COMMODITIES

* PAO Severstal's net profit for 2016 jumped year over year to US$1.62 billion, despite a 7.5% drop in revenue to US$5.92 billion. The net profit increase was mainly the result of a foreign exchange gain of US$483 million in the year, compared to a forex loss of US$624 million a year ago. Separately, Severstal's board recommended a dividend of 27.73 Russian rubles per share for 2016, up from 20.27 rubles per share proposed a year earlier.

* Nippon Steel & Sumitomo Metal Corp.'s net profit plunged 61.2% on yearly basis to ¥59.41 billion in its fiscal 2016 third quarter, which ended Dec. 31, 2016. Net sales fell 10.3% to ¥3.332 trillion while operating profit slumped 57.9% to ¥62.16 billion. The company expects full-year profit attributable to owners of the parent of ¥80 billion, up from the previous forecast of ¥60 billion, driven by a positive trend in the earnings of its affiliates.

* Outokumpu Oyj reported a net profit of €144 million for 2016, up from €86 million booked a year earlier, after it booked a €189 million deferred tax income gain owing to losses in previous years. Sales however, dropped to €5.69 billion from €6.38 billion recorded in 2015. Stainless steel deliveries reached 2.44 million tonnes, compared to 2.38 million tonnes a year ago. The company proposed a dividend of 10 euro cents per share for 2016.

* Mitsubishi Corp.'s metals group recorded a profit of ¥130.3 billion for the nine months that ended Dec. 31, 2016, an increase of ¥153.6 billion on a yearly basis. The rise was mainly due to higher earnings in the Australian coal business due to lower production costs and higher market prices, as well as larger dividends from investments, and one-off gains from the company's withdrawal from a nickel project.

* Western Potash Corp. will undergo a corporate restructuring through a plan of arrangement with newly created entity Western Resources Corp. Western Resources will acquire all of Western Potash by issuing 0.2 share per share of the latter. Completion of the arrangement, expected March 2017, will result in Western Resources becoming the Toronto-listed successor company to Western Potash.

* Although the U.S. is on the attack against China over subsidies provided to some of its aluminum producers, the Asian powerhouse has far greater worries than the penalties it faces from the World Trade Organization case. China is more focused on the government's move to reduce pollution and shut down up to 30% of aluminum capacity in Henan, Shandong and Shanxi.

* Russian fertilizer group PJSC PhosAgro's overall fertilizer production in 2016 increased 9.4% year over year to 7.4 million tonnes, after a 13.4% jump in output in the 2016 fourth quarter to 2.0 million tonnes.

SPECIALTY

* Uranium One Inc., a subsidiary of Russian nuclear giant Rosatom, won the bidding process to supply uranium concentrate to Brazilian state-owned nuclear company Industrias Nucleares Do Brasil. The contract was disclosed in the Brazilian Official Gazette on Feb. 1, daily Valor Econômico reported.

* Graphex Mining Ltd. reported an 80% increase in the mineral resource at its Chilalo graphite project in Tanzania. The Chilalo resource now stands at 16.9 million tonnes grading 10.2% total graphitic carbon, comprising 5.2 million tonnes of indicated and 11.7 million tonnes of inferred resources.

* Australia's AVZ Minerals Ltd. is acquiring a 60% interest in the Manono lithium-tin-tantalum mine in the Democratic Republic of the Congo.

* Supreme Metals Corp. signed two separate agreements: An exclusive option from Anstag Mining Inc. to acquire a 100% undivided interest in and to the 1,600-acre Silver Shadow property located in the northwest part of the Clayton Valley, and a 100% undivided interest in the 1,920-acre Columbus property in Esmerelda County, from Doctors Investment Group Inc., both of which are lithium-prospective properties in Nevada.

INDUSTRY NEWS

* India is planning to use drones to track illegal miners in a move to curb unsanctioned diggers, Bloomberg reported. According to the technical secretary at Indian Bureau of Mines in Nagpur, Piyush Sharma, the illegal miners usually manage to run away before the authorities can catch them. "Drones will be effective in a way that we will have pictures, which can be used as evidence," Sharma said.

* Dean Cunningham, CEO of Omani gypsum exporter Kunooz Oman Holding, said he expects Oman to issue a new mining law this June, Muscat Daily reported. The new law would permit companies to mine for a longer period and ease the process to secure a license.

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.