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Analysts see income gains for mining giants in 2017

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Analysts see income gains for mining giants in 2017

TOP NEWS

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.

Usmanov not ruling out merger between Metalloinvest, Norilsk Nickel

The principal owner of iron ore producer AO Holding Co. METALLOINVEST, Alisher Usmanov, said he still considers 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.

Junior miners favor ASX

The ASX has been the most active this year for mining IPOs compared to the other major exchanges globally, largely due to a lift in market sentiment but also the sector's preference for the Australian bourse. There have been eight successful IPOs and listings on the ASX this year, compared to two in 2015, according to SNL Metals & Mining data.

BASE METALS

* Vedanta Resources Plc unit Hindustan Zinc Ltd. was granted environment clearance for a 7.4 billion-Indian-rupee expansion project at its Rajasthan, India-based lead-zinc production facility, as well as the Sindesar Khurd underground zinc-lead-silver mine, India Today reported, citing a senior government official.

* 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.

PRECIOUS METALS

* 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.

* Southern Gold Ltd. and Westgold Resources Ltd. each received A$2 million as part of the first profit share distribution from the Cannon gold mine. Southern Gold applied A$1.5 million of the distribution to the repayment of the working capital facility provided by Westgold.

* Lydian International Ltd. said its Armenian operating subsidiary entered a secured credit facility for a maximum amount of US$42 million with Caterpillar Financial Services (UK).

* Silver Bear Resources Inc. said that its major shareholders A.B. Aterra Resources Ltd. and Inflection Management Corp. Ltd. agreed to extend the maturity of their convertible notes to March 31, 2017, from Dec. 31, 2016.

* An Australian Federal Court judge ordered that Quest Minerals Ltd. shares owned by Mutual Holdings Pty. Ltd. and KHV Holdings Pty. Ltd., entities controlled by veteran prospector Roger Nikolaenko, be put under the control of Quest administrator Adam Shepard. The move may clear the way for Shepard and incumbent directors of the company to raise A$1.8 million in 2017 and have a three-year trading halt lifted, The West Australian reported.

* Ausdrill Ltd.'s subsidiary, African Mining Services received a letter of intent from SEMAFO Inc. for a A$370 million, five-year mining contract at the company's Natougou gold project in Burkina Faso, The West Australian reported. African Mining is expected to start mining operations at the project in April 2017, which will employ about 235 workers.

BULK COMMODITIES

* India's mines ministry is considering a 5% increase in basic customs duty on the import of primary aluminum products to help take the pressure off local producers, including Vedanta Ltd., National Aluminium Co. Ltd. and Hindalco Industries Ltd., Mint reported.

* Avenira Ltd. expects to reach full nameplate production of the mine plant at its Baobab phosphate project in Senegal in the first quarter of 2017.

* Rio Tinto awarded a A$50 million contract to Decmil Group for its Amrun bauxite project in Queensland, Australia, 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.

* Bellzone Mining Plc secured up to US$4 million of working capital funding for 2017 from its 61.93% shareholder Hudson Global Group Ltd. The company's 2016 capital requirements were funded by a US$6.5 million loan due for repayment in March 2018.

* The Fair Work Commission ruled that sick leave taken by 81 South32 Ltd. workers at the Appin coal mine from Nov. 28 to Dec. 11 was part of a coordinated illegal industrial action, The Australian Financial Review reported.

* IRC Ltd. agreed to an amendment to the engineering, procurement and construction contract with China National Electric Engineering Co. Ltd., the contractor for its Kimkan iron ore production facility.

* Orbite Technologies Inc. filed a preliminary prospectus in Canada to raise up to C$60 million over the next 25 months. The prospectus will support additional commercial activities related to the company's high purity alumina plant in Quebec, including capacity enhancement and to build up inventory.

* 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 Chinese yuan. Upon completion, the company will own 100% stake in Baoshan. Separately, the company also agreed to sell 36% stake in Tongda coal project to Ordos Huijiabao Investment Co. Ltd. for 129 million yuan.

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

* Prophecy Development Corp. signed two coal sales and purchase agreements to sell a total of 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.

* Japan's aluminum premium for shipments from January to March 2017 was set at US$95 per tonne, up 27% from the previous quarter, as spot premiums rose following a disruption at Alcoa Corp.'s Portland aluminum smelter in Victoria, Australia, Reuters reported, citing six sources directly involved in the pricing talks. The pricing negotiations began last month between Japanese buyers and global producers, including Rio Tinto, South32, Alcoa and United Co. RUSAL Plc.

* 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 has extended the deadline by two months for its final decision in its safeguarding probe into imports of pre-painted 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 the Mine Restructuring Co.

SPECIALTY

* Électricité de France requested additional security from Paladin Energy Ltd. for its US$200 million prepayment under a long-term uranium off-take contract between the companies. EdF already has existing security over 60.1% of Paladin's Michelin uranium project in Newfoundland and Labrador under an August 2012 agreement.

INDUSTRY NEWS

* 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.

* Mexico is set to continue as the world's largest silver producer and a top 10 miner of other metals, including gold and copper, in 2017, Business News Americas reported, citing country's industry chamber Camimex.

SNL Metals & Mining is an offering of S&P Global Market Intelligence.

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.