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PotashCorp FY'16 profit dives to US$336M on weak sales

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PotashCorp FY'16 profit dives to US$336M on weak sales

TOP NEWS

PotashCorp FY'16 earnings plunge to US$336M on weak sales

Potash Corp. of Saskatchewan Inc.'s net profit in the fourth quarter of 2016 plummeted on a yearly basis as lower product prices weighed on profit margins. Net income fell to US$59 million from US$201 million in the period. Revenue, meanwhile, dipped to US$1.06 billion from US$1.35 billion.

Tata's pension scheme deficit may grow to up to £2B, could drive steel maker into insolvency

The trustee for Tata Steel UK Ltd.'s pension scheme warned members that the scheme's deficit is set to grow between £1 billion and £2 billion and could drive the steelmaker into insolvency, Reuters wrote. Meanwhile, Thyssenkrupp CEO Heinrich Hiesinger said Tata Steel must find a way to first address the pension deficit at its British and Dutch operations, before any merger of its steel operations with the German steelmaker.

Anglo American Q4'16 output up except copper, metallurgical coal

Anglo American Plc posted an increase in production in the fourth quarter of 2016 across all commodities, barring copper and export metallurgical coal, compared to the same year-ago quarter.

DIVERSIFIED

* BHP Billiton Group launched an auction-style online platform that shippers can use to offer the best price to haul cargoes of iron ore, copper and other commodities to the mining giant's customers, Reuters reported. The mining major allocated its first cargo using the platform this week and plans to gradually ramp up the platform.

BASE METALS

* First Quantum Minerals Ltd. produced 146,101 tonnes of copper in the fourth quarter of 2016, bringing its full-year total to 539,458 tonnes, increasing from 2015 fourth-quarter output of 115,885 tonnes and full-year production of 411,025 tonnes.

* Freeport-McMoRan Inc. said its PT Freeport Indonesia PT Freeport Indonesia unit will challenge the court decision that imposed US$469 million in surface water taxes and penalties on the company, Reuters reported.

* Separately, Freeport-McMoRan said it paid US$33 million to resolve claims brought against it by Democratic Republic of the Congo state miner Gecamines SARL over the sale of its majority stake in the Tenke Fungurume copper mine to China Molybdenum Co. Ltd.

* Operations at Codelco's Andina District copper mine in Chile were suspended after a worker died in an accident, Reuters reported. Despite a stoppage in mining operations, "critical production processes are still operating," the company noted, adding that a probe into the incident is underway.

* KAZ Minerals PLC's copper cathode output jumped 73% year over year to 140,300 tonnes in 2016, in the middle of its forecast range for the period. The performance reflects the ramp-up of the sulfide concentrator at Bozshakol and the oxide operations at Aktogay.

* Weatherly International Plc said its C1 costs are expected to rise to approximately US$4,600 per tonne, up from July 2016 guidance of US$4,100 per tonne to US$4,200 per tonne for its financial year to June 2017, due principally to the strengthening of the Namibian dollar against the U.S. dollar since the previous guidance was given.

* Peru plans to award the rights to develop the Michiquillay copper deposit in a public tender in 2017, one of 16 public-private projects worth US$4 billion that the country intends to tender this year, Reuters wrote, citing Alvaro Quijandria, the head of the state bidding agency, Proinversion.

PRECIOUS METALS

* PJSC Polyus said 51%-owned SL Gold LLC, a joint venture between the gold miner and state-run Rostec, won the Russian government auction for the rights to develop the greenfield Sukhoi Log gold deposit in the country. The JV submitted a bid of 9.4 billion Russian rubles, which includes the initial 8.5 billion-ruble payment made in December 2016.

* Sibanye Gold Ltd. may let go of about 330 workers, as it looks to achieve 800 million South African rand in cost cuts at its Kroondal and Rustenburg platinum operations in South Africa. The company has started a consultation process at the operations for the proposed restructuring, with a final decision to be made after talks with unions and relevant employees.

* Avesoro Resources Inc. expects to produce between 90,000 ounces to 100,000 ounces of gold in 2017 at all-in sustaining cost of US$925 per ounce to US$975 per ounce of gold produced from its New Liberty mine, part of its Bea Mountain property in Liberia.

* Lonmin Plc produced 148,588 ounces of platinum in the three months to the end of December 2016, compared to 157,579 ounces in the year-earlier period, while platinum group metal production was down to 284,705 ounces from 303,303 ounces.

* Polymetal International Plc's gold equivalent production for 2016 totaled 1,269,000 ounces, beating the year's guidance of 1,260,000 ounces. The year-ago output stood at 1,267,000 ounces. Gold production in the year rose 3% to 890,000 ounces, while silver production fell 9% to 29.2 million ounces, compared to 2015.

* Petropavlovsk PLC produced 416,300 ounces of gold in full-year 2016, compared to 504,100 ounces produced a year ago. In 2017, the company expects gold production of between 420,000 ounces and 460,000 ounces at total cash cost of US$600 per ounce to US$700 per ounce, and all-in sustaining cash costs of US$800 per ounce to US$900 per ounce.

* Nord Gold SE's refined gold production in 2016 dropped 9% year over year to 868,800 gold equivalent ounces but was in line with the year's guidance of 840,000 ounces to 880,000 ounces. Gold doré production was down 6% to 870,400 ounces. Revenue for the year dropped 4% on a yearly basis to US$1.08 billion. The company expects fiscal-2017 production in the range of 900,000 ounces to 950,000 ounces.

* Avocet Mining Plc failed to achieve its gold production guidance for the year of 75,000 ounces to 85,000 ounces, with output totaling 72,485 ounces at a cash cost of US$991 per ounce. The company's operations were negatively affected after its shipments were seized in late October and November 2016.

* Highland Gold Mining Ltd. produced 261,159 ounces of gold and gold equivalents in 2016, hitting the upper end of its guidance of 255,000 ounces to 265,000 ounces. The company expects production of gold and gold equivalents in 2017 to remain steady year over year, with a guidance range of 255,000 ounces to 265,000 ounces.

* Mali's gold output reached 46.9 tonnes in 2016, up slightly from 46.5 tonnes produced in 2015, as nearly all of the country's industrial gold mines exceeded targets, Reuters reported.

* In an ongoing squabble over safety stoppages, South Africa's Department of Mineral Resources accused Sibanye Gold Ltd. and AngloGold Ashanti Ltd. of putting workers' lives at risk, Bloomberg News reported. Mineral Resources Minister Mosebenzi Zwane said in an email statement, "If companies cannot mine safely, they should not be mining at all, and should allow other potential holders."

* Refuting earlier reports that AngloGold Ashanti and unions have reached a deal to hold off on proposed layoffs, trade union Solidarity said it would "do everything in its power" to ensure that as few jobs as possible are affected by the company's restructuring plans, adding that negotiations in this regard are ongoing, Mining Weekly reported.

* Rescue operations are underway to recover at least 13 workers trapped underground after a Chinese-owned gold mine collapsed in Tanzania's northeast region, the Associated Press reported, citing a police official.

* The Court of Appeal for British Columbia said a lawsuit against Tahoe Resources Inc., which was filed by seven Guatemalan men alleging they were shot by the miner's private security guards during a 2013 protest outside the Escobal silver mine, can proceed in the Canadian province, Reuters reported. The court reversed a 2015 Supreme Court ruling, saying the company has not established that Guatemala was a more appropriate forum for the case.

* Eskay Mining Corp. signed a letter of intent to option up to a 60% undivided interest in part of the early stage SIB gold property in British Columbia to an unnamed "senior" mining company.

* Majescor Resources Inc. staked additional ground on its Mirabelli gold project in Quebec, following the review of its exploration database. The new claim block, totaling 6,120 hectares, is southeast of the claims covering a potential banded iron formation.

* Alamos Gold Inc. signed an agreement with a syndicate of underwriters, under which the underwriters agreed to purchase 31.45 million common Alamos Gold shares at US$7.95 apiece on a bought-deal basis, for proceeds of about US$250 million.

BULK COMMODITIES

* Australia's Deputy Prime Minister gave conditional backing to Rio Tinto's sale of its Australian coal unit to Yancoal Australia Ltd., saying that even the unions are in support of the deal, The Australian Financial Review reported. The sale is yet to receive approval from the Foreign Investment Review Board.

* As part of broader reform efforts, the Brazilian government plans to introduce a bill to set a flexible royalty rate for iron ore ranging from 2% to 4% depending on international prices for the commodity, Reuters reported, citing Mines and Energy Minister Fernando Coelho Filho's interview with a local broadcaster. The current iron ore royalty rate is 2%.

* Vietnam plans to penalize four environmental officials over an environmental disaster caused by Formosa Plastics unit Formosa Ha Tinh Steel when its US$11 billion steel plant polluted over 200 kilometers of coastline in April 2016, Reuters reported. The officials will be transferred to other departments and face administrative action, warnings or rebukes.

* French steel pipe maker Vallourec and Asco Industries finalized their acquisition of the Saint Saulve steel mill in northern France, Reuters wrote. The companies' Ascoval vehicle will own the mill, which is targeting yearly production of 275,000 tonnes from the end of 2017.

* Finnish steelmaker Outokumpu Oyj sold its quarto plate mill in New Castle, Ind., to U.S.-based private equity company D'Orazio Capital Partners and to the mill's current management. The cash consideration is expected at about €28 million, depending on the amount of net working capital at closing.

* Shareholders of Adriana Resources Inc. and Sprott Resource Corp. approved the previously announced merger between the companies.

* Alcoa Corp. Global Primary Products head Roy Harvey said the company wants to "dramatically" ramp up its Western Australian bauxite exports as it has been authorized by the state government to export 2.5 million tonnes a year for five years, The West Australian reported.

SPECIALTY

* DiamondCorp Plc is on the verge of being placed into administration after business rescue practitioners failed to reach an agreement with secured lenders for the company's Lace Diamond Mines (Pty) Ltd. on issues related to a previously announced £1.0 million placing. The company's board has delayed the placement and now has until Jan. 30 to resolve outstanding issues to avoid bankruptcy.

* Mountain Province Diamonds Inc. sold 49,420 carats of diamonds at about US$127 per carat for US$6.3 million in proceeds, in its first diamond sale.

* Graphite One Resources Inc. extended the deadline to buy a 2% net smelter returns royalty on 28 mining claims in Alaska, until 2021.

* According to a report by GlobalData, global uranium output is forecast to increase at a compound yearly growth rate of 4.3% to 76,493 tonnes in 2020, Mining Weekly reported. The output increase would be driven by the need to meet upcoming demand from new reactors.

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.