TOP NEWS
Rusal's Q4'17 aluminum, alumina, bauxite output up QOQ
United Co. Rusal Plc's aluminum production increased 1.4% quarter over quarter to 944,000 tonnes in the fourth quarter of 2017, while alumina and bauxite production improved 1.3% and 7.4%, respectively, to 1.99 million tonnes and 2.95 million tonnes. Nepheline production, however, dropped 7.4% on a quarterly basis to 1.04 million tonnes, while aluminum foil and packaging products registered a 2.1% increase to 26,100 tonnes.
Bumi Resources on cautious path after US$4.2B debt restructuring
Indonesian coal major PT BUMI Resources Tbk. is taking a cautious path after it reduced its US$4.2 billion in outstanding debts by almost half through completion of the largest debt restructuring deal in Southeast Asia in 2017, according to Director and Corporate Secretary Dileep Srivastava. Srivastava said in an interview with S&P Global Market Intelligence that the company has no plans for further M&A, financing or expansion in the next two to three years, as it focuses on generating revenue from existing operations to repay debt.
Buoyant mood at Mining Indaba; regulatory uncertainties remain
While debt and financing issues dominated 2017's conference, the agenda for this year's Mining Indaba points to a remarkably buoyant mood among industry participants. Exploration and junior miners take center stage, alongside sustainability and innovation themes. However, some topics, especially on the regulatory horizon, are unlikely to undergo a lot of progress.
* AWE Ltd. unanimously recommended a previously announced A$594-million off-market takeover bid by Mitsui & Co. Ltd., following Mineral Resources Ltd.'s failure to match the competing bid. The company's board determined that the Mitsui bid, which valued the company at 95 cents per share, was superior than the all-share bid of 80 cents each by Mineral Resources, structured as 1 new Mineral Resources share for every 22.325 AWE shares.
BASE METALS
* A group of workers are trying to set up a new union at BHP Billiton Group's Escondida copper mine in Chile to supplant Union No. 1, as they are being "intimidated and insulted" by members of the existing union, Bloomberg News reported. The breakaway group needs at least 10% of the mine's workers to join their ranks by Feb. 8 to hold separate wage negotiations with the company.
* Grupo México SAB de CV posted a net profit of US$125.3 million for the fourth quarter of 2017, down 4% from US$130.5 million a year earlier. In a note released the same day, GBM Research analysts Rodrigo Garcilazo and Guillermo Estrada said the quarterly results were the strongest since the first quarter of 2012, thanks to increasing copper prices while costs remained under control. The analysts wrote that Grupo México's stock price was not taking into account a long-term copper price of US$2.65/lb and maintained a "market outperformer" rating on the company.
* On a stand-alone basis, Hindalco Industries Ltd. posted a net profit of 3.76 billion Indian rupees for the third quarter of its fiscal 2018, representing a 17% year-over-year increase resulting from an 18% decrease in interest costs due to the prepayment and repricing of project loans.
* Víctor Gobitz, the president of Peru's mining association IIMP, said that expansion plans in 2018 for the Antapaccay, Toquepala, Cerro Verde, Las Bambas, Toromocho and Antamina copper projects are expected to increase the country's annual copper production by 500,000 tonnes, Andina reported. Gobitz, who is also president and CEO of Cia. de Minas Buenaventura SAA, noted that Peru's current yearly output is 2.5 million tonnes.
* Intrepid Mines Ltd. shareholders voted in favor of selling the Kitumba copper project in Zambia to Weatherly International Plc. Weatherly, meanwhile, said that it changed the development plan for Kitumba and now intends to carry out development in two phases, with the initial focus on an area with higher-confidence mineralization and better grades.
* Bankers Cobalt Corp. struck a deal to earn up to a 70% stake in six cobalt and copper concessions in the southern Democratic Republic of the Congo.
PRECIOUS METALS
* Randgold Resources Ltd.'s fourth-quarter 2017 profit decreased by 7.7% year over year to US$87.1 million, while gold production also declined by 9.9% to 340,958 ounces. The company, however, booked a 13.9% yearly increase in net profit to US$335.0 million in full-year 2017 as a result of its 5.0% year-on-year gold output increase to 1.32 million ounces, at a 3.0% lower cash cost of US$620 per ounce. The company's board recommended a US$2.00 per share dividend, doubling its 2016 dividend. Production for 2018 is expected to fall between 1.30 million and 1.35 million ounces at a total cash cost per ounce in the range of US$590 to US$640.
* Separately, Randgold Resources said that it will engage in discussions with the Democratic Republic of the Congo over the enactment of a new mining code, which the company believes will limit the growth of the country's mining industry and its economic prospects.
* Saturn Metals Ltd aims to raise up to A$7 million in an IPO of up to 35 million shares at 20 cents each, with the proceeds to fund exploration on the Apollo Hill and Ra Resource areas in Western Australia.
* Yamana Gold Inc. said that two employees of a local contractor died after an accident at the Las Vacas exploration site, which forms part of its Gualcamayo operation in Argentina. An investigation is underway, and the company is working with local authorities and the contractor to determine the exact cause of the accident.
* Guyana Goldfields Inc. plans to inject US$120 million in investments into the Aurora gold mine in Guyana to conduct underground mining activities, a first in the country's history, Mining.com reported.
* Indonesian miner PT J Resources Asia Pasifik Tbk. allocated US$300 million for capital expenditure this year to develop two gold mines, Doup in Sulawesi and Pani in Gorontalo, Kontan reported.
* Kin Mining NL secured all necessary approvals to begin the process plant construction for the Leonora gold project in Western Australia. Gold production is on track to begin in the second half of the year.
BULK COMMODITIES
* Adani Enterprises Ltd. will not receive federal funding from the Northern Australia Infrastructure Facility for the construction of a rail link to the company's controversial Carmichael coal mine in Queensland, Reuters reported. This is a major blow for Adani, which was looking to secure a A$900 million concessional loan for rail to link Carmichael to port, and could spell the end of the project entirely if Adani will not be able to secure private finance.
* JSW Steel Ltd. confirmed that it is pursuing to acquire Bhushan Steel Ltd, Bhushan Power and Steel Ltd and Monnet Ispat & Energy Ltd., and has already submitted the resolution plan for Monnet Ispat and finalized the bidding process for Bhushan Steel and Bhushan Power and Steel, Press Trust of India reported, citing joint managing director and group CFO Seshagiri Rao. JSW Steel is also seeking permission to acquire 2,980 acres to set up a steel plant at Paradip in Odisha. The company has filed an application to seek forest clearance, and will decide on the plant capacity once it secures approvals, Rao added.
* The profit of the metal business of Toyota Tsusho Corp. for the third quarter of fiscal 2017 rose 24.7% year-on-year to ¥22.7 billion, from ¥18.2 billion, due to higher metal market prices.
* Mitsui & Co.'s mineral and metal resources segment posted a profit attributable to shareholders of ¥229.3 billion for the nine months ended Dec. 31, 2017, more than doubling year over year from ¥100 billion. The group attributed the increase mainly to higher coal and iron ore prices in Australia.
* Sojitz Corp.'s metals and coal segment recorded a profit attributable to shareholders of ¥15.06 billion for the nine months ended Dec. 31, 2017, up ¥10.44 billion from a year ago. The increase was attributed to higher sales prices for coal and an increase in the share of profit from investments in steel business and other companies.
* Itochu Corp.'s metals and minerals segment posted a net profit attributable to shareholders of ¥57.1 billion for the first nine months of its fiscal 2018, compared to the ¥24.7 billion profit recorded in the year-ago period. The segment achieved a ¥27.1 billion increase year over year in gross trading profit in the nine months to ¥66.1 billion, thanks to higher prices for coal and iron ore as well as higher sales volume in iron ore business.
* France will inject €5 million to support operations at the Ascoval steel plant at Saint-Saulve for a year, Reuters reported, citing Finance Minister Bruno Le Maire. The move is expected to save several hundred jobs.
INDUSTRY NEWS
* The 24th annual Mining Indaba kicked off in Cape Town, South Africa, at a time when the Western Cape area is facing a severe water crisis as a result of the worst drought on record. The organizers of the event have pledged to align with the situation and flagged that reducing water will be a priority at the four-day event. "We have been closely following the development of the water crisis and have engaged with local government structures extensively on the issue," the Indaba's Managing Director Alex Grose flagged ahead of the event. "After much consideration, it was agreed to keep the event in Cape Town as it attracts significant investment to the local economy – conservatively estimated at around 700 million South African rand over the past 10 years."
* Mining operations have not been directly affected by the ongoing water crisis in the Western Cape province, according to the South African Chamber of Mines. However, mines have implemented mitigation measures which focus on improved water efficiency. "Given the current situation in the Western Cape, even greater emphasis is placed not only on mines adhering to their water allocations in terms of their licenses, but also to adhere to the water restrictions currently in place as a result of the drought," said the chamber's head of environment, Stephinah Mudau, in an email to S&P Global Market Intelligence ahead of Mining Indaba.
* Shares of BHP and Rio Tinto both fell by over 2% on the ASX, as the bourse recorded its biggest fall since August 2017, Reuters reported.
* Australian mining contractor Downer EDI Ltd. will flag a A$77 million impairment for the first half of fiscal 2018 due to the non-renewal of two mining services contracts and delays in securing alternative contracts, Reuters reported.
* Mining investment in Peru grew 15.7% year over year to US$4.92 billion in 2017, according to official government figures from the country's Energy and Mines ministry. Investment in mining infrastructure and exploration led the way with annual growths of 44.3% and 34.2%, respectively.
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