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BHP posts 9% YOY increase in Q2 iron ore output, maintains FY'17 guidance

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BHP posts 9% YOY increase in Q2 iron ore output, maintains FY'17 guidance

TOP NEWS

BHP Billiton posts 9% YOY increase in Q2 iron ore output, maintains FY'17 guidance

BHP Billiton Group's iron ore output in December 2016 quarter rose 9% year over year to 60 million tonnes, while metallurgical coal output rose 2% to 11 million tonnes. Copper output during the period, however, fell 7% on a yearly basis to 357,000 tonnes. The company's iron ore output guidance for fiscal 2017 remains unchanged at 228 million tonnes to 237 million tonnes, while copper output is now expected to total 1.62 million tonnes from 1.66 million tonnes previously.

Rio Tinto sells Australian coal unit to Yancoal for up to US$2.45B

Rio Tinto struck a deal to sell its Australian subsidiary Coal & Allied Industries Ltd. to Yancoal Australia Ltd. for up to US$2.45 billion. The amount comprises an initial US$1.95 billion in cash payable at completion and US$500 million in deferred cash payments payable over five years after the deal closes.

Alcoa narrows Q4 net loss

In its first reporting period as a standalone, publicly-traded company, Alcoa Corp. posted a net loss of US$125 million in the fourth quarter of 2016, narrowing from a loss of US$826 million booked in the year-ago period. Results include US$151 million in special items related to the permanent closure of the Suralco refinery and mines in Suriname and the impairment of Alcoa of Australia Ltd.'s interests in a Western Australia gas field. For the full-year 2016, Alcoa posted a net loss of US$400 million, narrowing from a year-ago net loss of US$863 million.

DIVERSIFIED

* In order to improve its supply and demand analysis of the commodity markets, Rio Tinto is hiring eight Singapore-based experts, including positions for market analysis, ranging from junior to principal analysts, offering short-term supply and demand analysis as well as competitor analysis, Reuters reported.

BASE METALS

* Unionized workers at the BHP Billiton-majority owned Escondida copper mine in Chile rejected the company's latest wage offer and asked its workers to vote for a strike and prepare for an extended conflict, Reuters reported. The union represents about 2,500 employees at the mine and has been engaged in collective wage discussions with the company since December 2016.

* Based on initial calculations, China Nonferrous Mining Corp. Ltd. expects to book a decrease of about US$270 million in its loss attributable to company owners and may post a profit for the year ended Dec. 31, 2016. The company booked a loss of US$279.9 million for the year ended Dec. 31, 2015.

* Centerra Gold Inc. entered into fixed price forward sales contracts for 24.9 million pounds of expected 2017 copper output from its British Columbia-based Mount Milligan mine, at an average price of US$2.69 per pound.

* Western Areas Ltd. is assessing the effect of Indonesia's decision to to relax an export ban on unprocessed minerals, adding that it would take "several weeks, possibly months," before the impact was fully understood, Mining Weekly reported.

* Regulus Resources Inc.'s wholly owned Peruvian subsidiary, Southern Legacy Peru SAC, executed a definitive agreement with Compañía de Minas Buenaventura SAA unit Compania Minera Coimolache SA to jointly explore the AntaKori copper-gold project in northern Peru.

* Northern Dynasty Minerals Ltd. CEO Ronald Thiessen expects the company to receive environmental approval to develop its long-stalled Pebble copper-gold project in Alaska under the new U.S. administration headed by President Donald Trump, Bloomberg News reported. Thiessen said the ongoing dispute with the U.S. Environmental Protection Agency will be resolved within 100 days.

* Strategic Minerals Plc signed a shareholders agreement with New Age Exploration Ltd. and Cornwall Resources Ltd. to raise its stake in the Redmoor tin-tungsten project in the U.K. to 50%.

PRECIOUS METALS

* Evolution Mining Ltd. produced a record 217,812 ounces of gold in the December 2016 quarter, up from 205,307 gold ounces produced in the previous quarter. The company's average C1 cash cost declined 22% compared to the prior quarter to a record low A$585 per ounce in the period, while all-in sustaining costs declined 15% quarter over quarter to A$900 per ounce.

* Northern Star Resources Ltd. is on track to meet its fiscal 2017 gold production guidance after producing 124,871 ounces in the December 2016 quarter, up from 109,995 ounces produced in the prior quarter. The company's revenue in the quarter totaled A$197.5 million in the period, reflecting an improvement from A$183.2 million reported in the previous quarter.

* South Africa's National Union of Mineworkers said AngloGold Ashanti Ltd. agreed to hold back on its planned job cuts in favor of redeploying most of the affected employees to other operations, while the rest will be reskilled, Reuters reported, citing NUM spokeswoman Livhuwani Mammburu.

* Shandong Gold Mining Co. Ltd. expects its net profit attributable to shareholders for 2016 to surge by between 100% and 150% from the 587.0 million Chinese yuan, or 41 fen per share, posted in 2015, on the back of higher sales prices and volumes of gold.

* Goldcorp Inc. President and CEO David Garofalo stressed the need for gold majors to invest in exploration in order to feed their future project pipelines, as current reserves have declined by about one-third over the past five years, which may lead to gold mining becoming a less attractive industry for investors, Mining Weekly reported. "The majors don't want to take on the risk of greenfields exploration anymore, but will have to partner a lot more, even among seniors," Garofalo added.

* An arbitration tribunal dismissed a claim against Avesoro Resources Inc. regarding the termination of International Construction & Engineering's civil and earth works contract for the New Liberty gold mine in Liberia. The contractor brought the claim against the company after its contract was terminated in August 2014, when the works were 60% to 70% completed.

* Asa Resource Group Plc was served with a claim in the High Court of Zimbabwe by Zindico Consortium to indigenize its 85%-owned Freda Rebecca gold mine. The company believes there is no merit to the claim and said operations at the mine will continue as normal.

* Eastern Platinum Ltd. is seeking to have a notice of civil claim filed against it by Hebei Zhongheng Tianda Platinum Co. Ltd. dismissed with costs. The Chinese group filed a claim against Eastplats in the British Columbia Supreme Court in December 2016 over an alleged repudiation and breach of a share purchase agreement.

* Harte Gold Corp. was issued a phase-one commercial permit for its Sugar Zone property in Ontario, which will allow continued mining at the Sugar Zone deposit of 30,000 additional tonnes and accelerate underground development to prepare for full-scale commercial operations slated to begin in the first quarter of 2018.

* TerraX Minerals Inc. received the land use permit for the Southbelt property within its Yellowknife City gold project in Canada's Northwest Territories.

* Bitterroot Resources Ltd. secured an option to acquire Ely Gold & Minerals Inc.'s North Hackberry claims in Arizona, which host the past-producing Silver King silver mine.

* An initial National Instrument 43-101-compliant resource estimate for Aton Resources Inc.'s Hamama West deposit, part of the company's Abu Marawat gold-silver concession in Egypt, estimated the indicated resources containing 88,000 ounces of gold and 3.4 million ounces of silver within 3.8 million tonnes grading 0.72 g/t of gold and 27.6 g/t of silver.

BULK COMMODITIES

* AK Steel Holding Corp. posted a net loss of US$62.4 million for the fourth quarter of 2016, narrowing from a net loss of US$145.4 million a year earlier. The company returned to positive EBITDA of US$44.6 million from negative EBITDA of US$13.8 million recorded in the year-ago period.

* Russian fertilizer producer PJSC Acron's total commercial output for mineral fertilizers in 2016 jumped 19.8% year over year to about 5.3 million tonnes. Total commercial output for industrial products, however, dropped 8.3% year over year to 869,000 tonnes.

* DaTong Coal Industry Co. Ltd. expected to swing to a net profit attributable to shareholders of about 180 million Chinese yuan in 2016 from the net loss of 1.80 billion yuan, or 1.08 yuan per share, recorded in 2015.

* Chongqing Iron & Steel Co. Ltd. expects to book a net loss attributable to shareholders of the company for full-year 2016.

* On the back of higher prices, Atlas Iron Ltd. realized a 10.8% year-over-year increase in iron ore shipments during the fourth quarter of 2016, Metal Bulletin reported. The company shipped 4 million wet tonnes during the period, compared to 3.61 million wet tonnes recorded a year ago.

* Chinese state-owned steel mills have largely rejected Rio Tinto's plan to charge an extra premium of up to US$2 per tonne for its highest-grade iron ore, The Australian Financial Review reported. However, some of the smaller steel mills with an annual production capacity of up to 5 million tonnes have agreed to the price hike.

* Brazil's flat steel sales declined by 4% year over year to 3.04 million tonnes in 2016, Metal Bulletin reported, citing the country's flat steel association, Inda.

* Thailand's Ministry of Commerce decided to impose import duties on H-beam steel products by 31.43% in 2017 and by 31.05% in 2018, in an effort to safeguard domestic steel product manufacturers after imports of such products have been increasing sharply, Thailand's Daily News reported.

SPECIALTY

* Anglo American Plc's diamonds division, De Beers SA, sold US$720 million worth of rough diamonds in the first sales cycle of 2017. The diamond producer recorded actual rough diamonds sales of US$422 million in the 10th or final sales cycle of 2016.

* Lynas Corp. Ltd.'s production of total rare earth oxides rose to 3,913 tonnes in the second quarter of its fiscal 2017, compared to 3,166 tonnes produced a year earlier, reflecting solid production and operational performance. The company also achieved record sales during the period, with A$65 million in invoiced sales, compared to A$49.5 million in the corresponding year ago quarter.

* Great Lakes Graphite Inc. received an order for 20 tonnes of synthetic graphite from a Middle East-based customer.

INDUSTRY NEWS

* Mining contractor CIMIC made a hostile cash takeover offer of 14.5 Australian cents per share for Macmahon Holdings, valuing the latter at A$174 million, The Australian Financial Review reported. CIMIC already owns a 20.54% stake in Macmahon.

* The British Supreme Court ruled that the government cannot trigger Article 50 of the Lisbon Treaty to leave the EU without parliamentary approval. However, the devolved legislatures of Scotland, Wales and Northern Ireland need not be consulted. The government said the Supreme Court ruling does not impede the process of departure from the European bloc or alter the timetable set out by Prime Minister Theresa May.

* A former minister of mines in Guinea, Mahmoud Thiam, pleaded not guilty to U.S. charges that he laundered US$8.5 million in bribes from a Chinese conglomerate to help the latter secure mining rights in the West African country, Reuters reported.

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.