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Analysts flag income gains for mining giants in 2017


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Analysts flag income gains for mining giants in 2017


Analysts forecast income gains in 2017 for mining giants

On the back of a recent rally in commodity prices, BHP Billiton Group, Rio Tinto, Vale SA and Glencore Plc may earn a combined US$26 billion in the six months through December, a two-year high and up 40% from the first half, according to forecasts compiled by Bloomberg News. Meanwhile, analysts see more income gains in 2017, which would bolster balance sheets and enable mining companies to pursue acquisitions, increase dividends and reduce debt.

Fortescue to develop Eliwana iron ore deposits

Fortescue Metals Group Ltd. seems to have decided to develop its Eliwana iron ore deposits in Western Australia, The West Australian reported. The US$1.5 billion project will replace the company's 27 million-tonne-per-year Firetail iron ore mine.

Antam to exceed FY'16 ferronickel, gold output targets

PT Antam (Persero) Tbk expects full-year 2016 production of ferronickel and gold, its two main commodities, to exceed the company's targets. Ferronickel production reached 20,080 tonnes of nickel contained in ferronickel, as of the beginning of the last week of December, compared to the full-year 2016 target of 18,500 tonnes of nickel contained in ferronickel.


* The principal owner of iron ore producer AO Holding Co. METALLOINVEST, Alisher Usmanov, said he is still considering a proposal to form a Russian metals and mining giant by combining Metalloinvest and PJSC MMC Norilsk Nickel, Reuters reported, citing Usmanov's interview with Rossiya-24 TV network.


* Analysts see an extremely tough 2017 for Chinese zinc smelters due to depressed concentrate supply and lower demand growth for the metal, Metal Bulletin reported. Meanwhile, the competition for business amid higher smelting capacity is weighing on treatment charges, impacting profitability at the smelters.

* Codelco's share in the world molybdenum market will decline from 55% to 49% in 2017, although the Chilean state miner would remain a global leader, according to a report by the Chilean Copper Commission, daily Pulso reported.

* Pacific Ridge Exploration Ltd. agreed to option a 100% interest in the Fyre Lake copper-gold-cobalt massive sulfide deposit in Canada's Yukon Territory to BMC Minerals (No. 1) Ltd., a Canadian subsidiary of BMC (UK) Ltd.


* The Russian government received two bids during the auction for the Sukhoi Log gold deposit in Russia, Reuters reported, citing Interfax. The bids were from SL Gold and Zoloto Bodaibo, and bidding is now closed. SL Gold is a joint venture between PJSC Polyus and Rostec Corp.

* Centerra Gold Inc. received all the necessary permits and approvals for its 2017 mine plan for the Kumtor gold project in Kyrgyzstan.

* OceanaGold Corp. started milling operations at its Haile gold mine in South Carolina. The company expects to produce 150,000 ounces to 170,000 ounces of gold at Haile in 2017 at all-in sustaining costs of between US$500 per ounce and US$550 per ounce.

* Barrick Gold Corp. postponed its decision over whether to continue or stop operations at its Lama mine, part of the Pascua Lama project in Argentina's San Juan province, until February next year, sources told daily Diario del Cuyo.

* Vital Metals Ltd. intersected gold and copper mineralization at the Peninsula copper prospect and the Elephant Creek gold project in Queensland, Australia. Assay results included 9 meters at 1.48 g/t gold at Elephant Creek and up to 16.7% copper at the Peninsula copper prospect.

* A court in Perth, Australia, imposed a A$65,000 fine on the contractor for the ball mill at the Newmont Mining Corp.'s Boddington gold mine in Western Australia over an incident that left a worker severely injured in July 2012, the Australian Associated Press reported.

* The Shangahi Gold Exchange plans to lower the offer limit to 500 kilograms from 1,000 kilograms on some spot gold contracts starting next year, Reuters reported.

* Hummingbird Resources Plc appointed Ausdrill Ltd. subsidiary African Mining Services as the mining contractor for its Yanfolila gold project in Mali. Mine construction is underway, and first gold pour is expected to occur in 2017.

* Workers of Aruntani SAC decided to hold a peaceful protest Jan. 10, 2017, in the city of Puno in Peru to support their claim for higher wages and other economic benefits, daily Diario Correo reported.

* Monument Mining Ltd. secured a six-month exclusive option to acquire a 51% stake in the Matala gold project in the Democratic Republic of the Congo from Panex Resources Inc.

* Taung Gold International Ltd. struck a deal to acquire an exploration license for copper, gold and other minerals in Pakistan for HK$146 million. Separately, Taung Gold selected MCC International Inc. Ltd. to negotiate an EPC contract to develop the EL127 exploration license in Pakistan.

* Fairmont Resources Inc. was granted an extension until Feb. 22, 2017, to pay for its €4.3 million acquisition of the assets of Granitos de Badajoz SA.


* China Construction Bank Corp. agreed to swap nearly 30 billion Chinese yuan worth of debt for equity in the state-controlled coal and steel companies in the eastern Anhui province, Reuters wrote, citing Xinhua News Agency. The bank signed deals with Huainan Mining Industry (Group) Co. Ltd., Huaibei Mining Group and Magang (Group) Holding, the parent of Maanshan Iron & Steel Co. Ltd., among others. The bank will also provide Huainan Mining, Huaibei Mining and Wanbei Coal-Electricity Group with more than 30 billion yuan of credit in the next five years.

* Rio Tinto awarded a A$50 million contract to Decmil Group for its Amrun bauxite project in Queensland, The West Australian reported. The contract involves the design, fabrication, supply, delivery, construction, installation, testing and commissioning of the mine infrastructure area at the project.

* Inner Mongolia Yitai Coal Co. Ltd. agreed to acquire a 27% stake in the Baoshan coal project in China from Beijing Jielongda for 129 million yuan. Upon completion, the company will own a 100% stake in Baoshan. Separately, the company also agreed to sell a 36% stake in the Tongda coal project to Ordos Huijiabao Investment Co., Ltd. for 129 million yuan.

* China Coal Energy Co. Ltd. subsidiary Shanghai Energy Co. entered an agreement with Datun Coal and Electricity to transfer the assets and liabilities of the Longdong coal mine, including the coal preparation plant to Datun Coal, for nearly 237 million yuan.

* Prophecy Development Corp. signed two agreements to sell 16,000 tonnes of coal sourced from its wholly owned Ulaan Ovoo coal mine in Mongolia. The company will sell 10,000 tonnes to Erdenet Mining Corp. and 6,000 tonnes to Selenge Energo Heat Plant.

* Recent reports about a potential reduction in the import duty imposed on flat steel products by Iran has led to a trading halt, Metal Bulletin wrote. The exact date for the regulation to take effect is unclear, so potential customers took a wait-and-see position.

* Vietnam's Ministry of Industry and Trade extended the deadline by two months for its final decision in its safeguarding probe into imports of prepainted galvanized steel, Metal Bulletin reported.

* Kompania Weglowa SA's Makoszowy coal mine in Poland, which will cease operations this week, sold coal worth 129 million Polish zlotys in 2016 while also receiving 138 million zlotys of budget subsidies for production losses, Puls Biznesu reported, citing information from Mine Restructuring Co.


* With less than three months until the Western Australian election, it is still unclear as to what the two major political parties will do to bolster the state's resources sector. While the Liberal Party appears to have no clear mandate, the Labor Party has outlined its plan to introduce the Skilled Local Jobs Bill to support the growth of jobs in industries complementary to the resource sector.

* The government of Argentina's Chubut province will conduct a popular consultation process for citizens to decide whether to remove or keep the current ban on open-pit operations under Law 5001, daily El Inversor Energético reported.

* Bolivia's mining exports grew 3.5% year over year between January and November, totaling US$1.68 billion, daily El Diario reported.

* Zambia is withholding 2.4 billion Zambian kwacha of the 5 billion kwacha owed to mining companies in tax refunds, as firms have not provided the correct documentation, Reuters reported, citing the Zambia Revenue Authority.

* The Office of the Comptroller of the Currency issued a final rule, effective April 1, 2017, barring national banks and federal savings associations from dealing or investing in industrial or commercial metals.

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.