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South32 Q2 alumina output up QOQ; remains on track to meet FY'17 guidance

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South32 Q2 alumina output up QOQ; remains on track to meet FY'17 guidance

TOP NEWS

South32 Q2 alumina output up QOQ; remains on track to meet FY'17 guidance

Despite a challenging December 2016 quarter, South32 Ltd. remains on target to achieve the production guidance for most of its operations. The company produced 1.3 million tonnes of alumina and 249,000 tonnes of aluminum during the three-month period, representing a 2% increase on a quarterly basis. Manganese output, meanwhile, rose 6% quarter on quarter to approximately 1.3 million tonnes, which was achieved by drawing down Wessels concentrate stockpiles in South Africa and ramping up PC02 ore production at GEMCO to full capacity.

Freeport, US govt in US$600M deal to clean up uranium mines in Navajo Nation

Freeport-McMoRan Inc. subsidiaries, the United States and the Navajo Nation have reached a settlement for the cleanup of 94 abandoned uranium mines in Navajo Nation territory, comprising parts of Utah, New Mexico and Arizona. The settlement is valued at over US$600 million, with the U.S. government to bear about half of the costs.

Rio Tinto, Chinalco terminate Chinese copper JV

Rio Tinto and Aluminum Corp. of China, or Chinalco, have terminated the joint venture they established in 2011 to find copper deposits in China, Bloomberg News reported. Based on Rio Tinto's website and filings, the joint venture company had focused on the northern Xinjiang, Inner Mongolia and Heilongjiang provinces and employed about 30 full-time staff. The venture was also supposed to expand its search for deposits to coal and potash.

DIVERSIFIED

* Vale SA's principal shareholders, the pension funds Previ, Funcef, Petros and Funcesp, Bradespar, BNDES, and Mitsui & Co. Ltd., are reportedly planning to renew the current shareholder agreement, daily Valor Econômico reported. The shareholders are expected to agree to a shorter contract, instead of the 20 years the current arrangement extended since Vale's privatization in 1997. The shareholders are also allegedly discussing merging the company's two share classes, preferred and common, into a single type with voting rights, the sources said.

* Hawkeye Gold & Diamond Inc. signed a deal to purchase the 123.8-hectare Bonanza property, which encompasses the historical Bonanza Pit, a copper, gold, silver, zinc and magnetite skarn prospect, on British Columbia's Vancouver Island for C$5,000 and 250,000 shares.

BASE METALS

* Vedanta Resources Plc's Konkola Copper Mines Plc unit has agreed to pay a first tranche of US$20 million as part of a US$100 million fine that was granted to ZCCM Investments Holdings Plc relating to a copper price agreement the companies signed in 2013, Firstpost reported.

* Afarak Group Oyj's 90%-owned Afarak Mogale unit has agreed to repurchase the remaining 10% of its shares from the Mogale Alloys Workers Trust for 64.9 million South African rand. The trust's beneficiaries have been requesting Afarak Group to acquire the remaining Afarak Mogale stakes for the past five years.

* Freeport-McMoRan's PT Freeport Indonesia unit is expected to pay "slightly" more taxes once it secures a new mining permit, Reuters reported, citing Suahasil Nazara, head of the Indonesian fiscal policy office.

* Meanwhile, Metal Bulletin wrote that Freeport-McMoRan expects to be allowed to continue exporting copper concentrates from Indonesia while talks over the country's new mineral export policy are ongoing.

* A definitive feasibility study at Central Asia Metals Plc's Chanaral Bay tailings project in Chile estimated a posttax net present value, discounted at 8%, of US$34.1 million, and a 19.1% internal rate of return. The study expects initial capital of US$88.5 million and anticipates average annual copper production of 8,640 tonnes for seven years.

* Union workers at BHP Billiton Group's Escondida copper mine in Chile have reaffirmed that they will not agree to any cut in benefits, Metal Bulletin wrote.

PRECIOUS METALS

* Hochschild Mining Plc's attributable gold production totaled 35.5 million silver equivalent ounces in full-year 2016, up 31% compared to last year, including 17.3 million ounces of silver and 246,080 ounces of gold. For 2017, the company set an attributable production target of 37.0 million silver equivalent ounces.

* Jaguar Mining Inc. exceeded its 2016 production guidance as full-year output reached 96,536 ounces of gold. For 2017, the company expects to produce 100,000 ounces to 110,000 ounces of gold at all-in sustaining costs of US$900 per ounce to US$1,000 per ounce of gold sold.

* A stage-one bankable feasibility study for the Julius deposit within Echo Resources Ltd.'s Yandal project in Western Australia generated a life-of-mine EBITDA of A$41 million and a 117% internal rate of return. The study, using a base case gold price of A$1,600 per ounce, estimated an initial ore reserve of 868,000 tonnes at 2.44 g/t of gold for 63,965 recovered ounces at a C1 cash cost of A$832 per ounce.

* Primero Mining Corp. produced 176,139 gold equivalent ounces in 2016 to meet its revised output guidance for the year. Primero anticipates that 2017 production levels will also be in line with 2016 but at reduced unit costs.

* Gold Resource Corp. is acquiring the East Camp Douglas gold-silver property in Nevada from Diversified Inholdings LLC for US$2 million, comprising US$1.0 million worth of restricted common stock and US$1.0 million cash.

* Metalla Royalty & Streaming Ltd., formerly Excalibur Resources Ltd., signed a letter of intent to acquire 15% of the issued shares in Silverback Ltd. and an option to invest in a second gold stream for US$2 million.

* A rockfall at Impala Platinum Holdings Ltd.'s 20 shaft in Rustenburg, South Africa, killed one worker and injured another, Mining Weekly reported, citing Johan Theron, the company's spokesperson.

BULK COMMODITIES

* Baoshan Iron & Steel Co. Ltd.'s net profit attributable to shareholders for 2016 is expected to surge by about 770% from 1.01 billion Chinese yuan, or 6 fen per share, posted a year ago, on the back of sales exceeding targets, reduced operational costs and improved efficiency.

* Anglo American Plc has shortlisted bidding companies, led by a number of South Africa's most prominent black businessmen, for several of its coal mines in the region, Bloomberg News reported, citing "two people familiar with the discussions." Rand Merchant Bank Nigeria Ltd. is involved in the process, the sources noted.

* Styx Coal Pty Ltd, a subsidiary of Clive Palmer's Mineralogy Pty Ltd., is seeking approval for a coal mining license on Queensland Nickel Inc.'s Mamelon cattle station, after administrators failed to sell the property last year. According to ABC, the move outraged former workers of Queensland Nickel, which still owes A$300 million.

* Wesfarmers Ltd. expects its resources business to report EBIT of between US$135 million and US$140 million for the first half of fiscal 2017.

* Brazil's mines and energy minister, Fernando Coelho Filho, said the BHP Billiton Group and Vale joint venture Samarco Mineração SA is expected to resume operations within two months, The Australian reported.

* U.K. financier Edi Truell has renewed an offer to take over Tata Steel Ltd.'s British Steel Pension Scheme to allow its members to keep their full benefits, Reuters reported. Tata is in discussions with shareholders to cut pension benefits for the 130,000 members of the scheme via a spinoff into a standalone entity.

* The U.S. Commerce Department finalized its finding of dumping of certain imports of carbon and alloy steel cut-to-length plate from China, Reuters reported. A final dumping margin of 68.27% was set for Jiangyin Xingcheng Special Steel Works Co. Ltd., the only respondent in the case, the department stated.

* An updated pre-feasibility study for Potash Ridge Corp.'s Blawn Mountain potash project in Utah estimated average after-tax life-of-mine cash flow of US$128 million per annum for a surface mining operation that will produce 232,000 tons of potassium sulfate per year.

* OJSC Magnitogorsk Iron & Steel Works, kicked off shipments of flat steel products to Iran through Kazakhstan's port of Aktau, Metal Bulletin wrote, citing the company's spokesman.

* IRC Ltd. announced that it secured a new core investor with the completion of share subscription by Tiger Capital Fund, raising US$25 million.

SPECIALTY

* Paladin Energy Ltd. generated US$40.1 million in sales during the quarter ended Dec. 31, 2016, a 166% jump from the preceding quarter, as sales volumes reached about 1.5 million pounds of U3O8 at an average selling price of US$26.26 per pound. The company expects its sales to fall to between 700,000 pounds and 800,000 pounds of U3O8 in the March quarter.

* Pilbara Minerals Ltd. awarded RCR Tomlinson Ltd. the engineering, procurement and construction contract for a 2 million-tonne-per-annum lithium-tantalum plant at its Pilgangoora project in Western Australia. The contract contains an incentivized target cost of A$138 million, with a guaranteed maximum price of A$148 million.

* Lithium Energy Products Inc. inked a memorandum of understanding for lithium off-take with Sichuan Zhiyuan Lithium Industries, a subsidiary of cathode manufacturer Shehong Zhiyuan Industry Co. The MOU calls for the supply of 200 tonnes per month each of industrial-grade lithium chloride and lithium carbonate, and 1,500 tonnes per month of industrial-grade lithium chloride brine.

* De Beers SA CEO Bruce Cleaver urged the global diamond and mining industry to collaborate and "increase impact of combined efforts to grow industry value," Mining Weekly reported. The group also plans to launch a new diamond verification instrument in late 2017, Cleaver noted.

INDUSTRY NEWS

* The Indian government's recent mineral lease auctions, covering limestone, iron ore, diamonds and gold, raked in 733 billion Indian rupees from companies like Essar Steel India Ltd. and JSW Ltd., among others. According to Live Mint, another 150 to 200 mines will be put up for auction in 2017 and 2018.

* The Philippine government canceled the environmental permits for four more mining projects, including the environmental compliance certificate for Intex Resources ASA's Mindoro nickel project, as the crackdown on erring mines and companies in the country continues, Reuters reported.

* Capping a year of recovery for the mining sector, S&P Global Market Intelligence's Pipeline Activity Index rose an impressive 53% in 2016. The index was off slightly in December 2016, after reaching a 44-month high in November 2016, as an increase in financings was offset by declines in drilling activity, initial resources and project milestones.

* Rescuers worked to free seven miners trapped for two days in a tunnel covered by a landslide in southern Peru, Reuters reported. The mine's owner was unconfirmed, according to the report.

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.