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All foreign suppliers will 'feel the pain' if Trump imposes metal tariffs

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All foreign suppliers will 'feel the pain' if Trump imposes metal tariffs

TOP NEWS

All foreign suppliers will 'feel the pain' if Trump imposes metal tariffs

President Donald Trump's threat to impose expansive tariffs on steel and aluminum is already boosting customer inquiries at U.S. mills, along with U.S. metal prices. But how much the direct U.S. aluminum and steel sectors may benefit from a tariff remains an open — and fraught — question, according to metals experts. "Steel mills are reporting they're getting a lot of communication from buyers that come around occasionally or never at all," said Doug Hilderhoff, CRU Group's principal analyst on steel. The implication is that customers that rely on imports are already seeking alternative metal sources from U.S. suppliers. But getting it may not be easy. Hilderhoff said steel mills will likely help existing customers first, rather than those that rely on imports and all of a sudden want U.S. supply.

Franco-Nevada swings to Q4'17 profit

Franco-Nevada Corp.'s net income in the fourth quarter of 2017 totaled US$43.5 million, swinging from a year-ago net loss US$4.5 million. Revenue came in at US$167.2 million on 119,839 gold equivalent ounces of sold, compared to US$155.3 million on 121,910 gold equivalent ounces sold in the year-ago period.

Higher commodity prices help push MMG into the black in FY'17

MMG Ltd. swung to a net profit of US$348.4 million in 2017 from a year-ago net loss of US$98.7 million. The company attributed the reversal to higher commodity prices, its focus on cash generation and the contribution from its Las Bambas copper mine in Peru.

DIVERSIFIED

* Bloomberg LP Executive Chairman Peter Grauer retired as nonexecutive director of Glencore Plc, effective immediately.

BASE METALS

* In 2018, PT Antam (Persero) Tbk. is targeting increasing the production of nickel contained in ferronickel by 19% year over year to 26,000 tonnes, while output of nickel ore is expected to surge 101% to 11.3 million tonnes.

* Eurasian Resources Group Sàrl renewed efforts to sell its Frontier copper mine in the Democratic Republic of the Congo even as the asset's value has dropped to US$400 million, Reuters reported, citing two banking sources. One of the sources said the Kazakh miner is targeting exiting the DRC within two years.

* S&P Global Market Intelligence estimates that in the final quarter of 2017, global production of nickel slipped slightly compared with the previous quarter. The company's estimate of 553,000 tonnes for the latest three-month period brings the annual total to almost 2.19 million tonnes, which is fractionally higher than the amount produced in 2016. Meanwhile, production of zinc increased to 3.20 million tonnes after the disappointing 3.13 Mt registered in the three months to end-September 2017. Although mined output in the December quarter was down 1.7% on the year-ago figure, it brought the annual total to 12.39 Mt of contained metal, up 1.2% from 2016.

* The Indonesian government collected US$756 million in revenue from Freeport-McMoRan Inc. unit PT Freeport Indonesia in 2017, The Jakarta Post reported.

* Bunker Hill Mining Corp. signed an agreement with the U.S. Environmental Protection Agency and Department of Justice to allow for its operation of the Bunker Hill zinc-lead-silver mine in Idaho without being liable for the mine's past contamination incidents.

* A preliminary economic assessment on Cardero Resource Corp.'s Zonia copper oxide deposit in Arizona defined a posttax net present value, discounted at 8%, of US$192 million, with a 29% internal rate of return and a 2.89-year payback period.

* Quest Minerals has re-emerged on the ASX as High Grade Metals Ltd., switching its project focus from vanadium in Australia to mainly cobalt and gold in Austria, leveraging off what analysts see as an increasing push within the EU to own battery minerals resources.

* Horizonte Minerals Plc completed the acquisition of the Vermelho nickel-cobalt project in Brazil from Vale SA. Meanwhile, a feasibility study for the Araguaia nickel project, which is targeting production of 14,500 tonnes of nickel per annum, is due for completion by mid-2018.

* Havilah Resources Ltd. estimated an inferred resource for cobalt in its Kalkaroo copper-cobalt-gold deposit in South Australia of 193.3 million tonnes at 120 parts per million cobalt containing about 23,200 tonnes at a 20-ppm lower cutoff grade.

* Aeris Resources Ltd. subsidiary Tritton Resources Pty. Ltd. entered into a copper hedging contract for 12,000 tonnes of copper, to be delivered in monthly installments of 1,000 tonnes up to February 2019 at an average price of A$8,670 per tonne.

PRECIOUS METALS

* Shandong Gold Mining Co. Ltd.'s net profit attributable to shareholders dropped 12% to 1.14 billion Chinese yuan in 2017, while operating revenues edged up 2% to 51.04 billion yuan. The decline was due to lower production volumes at some mines as the company conducted investigations and a facility upgrade program to improve mine safety. Total gold output went up 20% to 35.88 tonnes of gold in 2017. 2018 guidance is set at 39.86 tonnes.

* Westgold Resources Ltd. agreed to sell its South Kalgoorlie gold operations in Western Australia to Northern Star Resources Ltd. for A$80 million in cash and shares.

* Alloy Resources Ltd. signed a binding heads of agreement with Jindalee Resources Ltd. for an option to acquire exploration license 53/1962, dubbed the Millrose tenement, adjacent to its Horse Well gold project in Western Australia.

* St Barbara Ltd. entered into gold hedging contracts for production of 25,000 ounces from its Simberi project in Papua New Guinea, to be delivered in monthly installments from July 2018 to December 2019 at a forward price of A$1,750 per ounce.

BULK COMMODITIES

* U.S. President Donald Trump reiterated his commitment to the planned tariffs on steel and aluminum imports as leaders of several other countries expressed concern over the move, Bloomberg News reported. Trump also downplayed the possibility of U.S. tariffs starting a global trade war, saying "when we're behind every single country, trade wars aren't so bad" and "the trade war hurts them, not us." EU Trade Commissioner Cecilia Malmstrom said, "A trade war has no winners," urging the U.S. to reconsider imposing the tariffs. The tariffs are seen impacting EU steel and aluminum exports that were valued at €5.3 billion and €1.1 billion, respectively, in 2017 and the EU plans to impose punitive retaliatory tariffs on U.S. goods. IMF head Christine Lagarde said trade wars generally lead to "losers on both sides," Reuters wrote.

* The White House indicated the possibility that the U.S. could exclude certain countries from its planned tariffs on steel and aluminum imports, other than Canada and Mexico, Reuters reported. Trump is expected to sign a presidential proclamation establishing the tariffs March 8.

* President Trump may not have made his final decision on placing tariffs on imported steel and aluminum, Energy Secretary Rick Perry said, speaking at an industry conference where energy executives railed against the proposals.

* Coal India Ltd. missed its production target for the 11th straight month, bringing its total from April 2017 through February 2018 to 495.1 million tonnes, which is 7% below the target of 531.3 million tonnes set by India's coal ministry, Business Standard reported.

* U.S. Steel Corp. will restart the steelmaking facilities and one of two blast furnaces at its Granite City Works property in Illinois ahead of an anticipated surge in demand in the U.S. related to the government's plans to enforce tariffs on steel imports. The company expects to call about 500 employees back to the site starting this month, with the restart process expected to take up to four months.

* BSG Resources Ltd. entered into voluntary administration to protect itself as it faces legal action in connection with a scandal over the Simandou iron ore project in Guinea. "It's very, very simple. This is not a liquidation. This is not a bankruptcy. We have voluntarily put ourselves into administration," BSG Resources director Dag Cramer said.

* Coal's share of China's primary energy mix will be slashed to 59% in 2018 and will be further reduced to just half by 2020 as part of the country's efforts to transition to cleaner energy sources, Reuters reported, citing China's National Energy Administration. Coal production this year is expected to reach an all-time high, at 3.7 billion tonnes, an increase of 7.3% year over year.

* Tata Steel Ltd. said it was the winning bidder for a controlling stake in insolvent Indian steelmaker Bhushan Steel Ltd, beating rival JSW Steel Ltd. Reuters reported that Bhushan's creditors claimed they were owed 559.89 billion Indian rupees.

* Gary Cohn is resigning as Trump's top economic adviser amid the administration's planned tariffs on U.S. steel and aluminum imports.

* The Indonesian Trade Ministry plans to impose import duties on steel and aluminum products in response to planned tariffs by the U.S. government, Bisnis Indonesia reported.

* China's Shanxi Province looks to slash 16 million tonnes of backward mining capacity in state-owned coal mines in 2018, Xinhua Net reported.

* Mitsubishi Corp. completed the sale of its 28.9% stake in the Warkworth coal mine in New South Wales, Australia, to Yancoal Australia Ltd.

* Ghana plans to launch a series of infrastructure projects in the country, including constructing alumina refineries and railways, which will be paid off using refined bauxite in barter trade, Bloomberg News reported, citing President Nana Akufo-Addo.

SPECIALTY

* Russia's PJSC Alrosa increased diamond sales in February to US$541.9 million from US$504.5 million in January, driven by higher sales in China on the eve of Chinese New Year and the diamond-cutting sector replenishing stocks.

* Ucore Rare Metals Inc. is forming a joint venture with Kentucky River Properties LLC to process rare earth elements and strategic metals from the Appalachian coal region in the U.S.

* Technology Metals Australia Ltd.'s mineral resource estimate for the Northern Block deposit within the Gabanintha project in Western Australia increased 57% to 98.4 million tonnes at 0.8% vanadium oxide and 9.7% titanium dioxide including 21.6 million tonnes at 0.9% vanadium oxide and 11.2% titanium dioxide in the indicated category.

* Gem Diamonds Ltd. recovered a 152-carat, top white color, Type IIa diamond from its majority-owned Letseng mine in Lesotho. This is the sixth diamond of more than 100 carats recovered from the mine this year.

* Frontier Diamonds Ltd. discovered the first diamonds of up to 1.45 carats at the Bellsbank kimberlite pipe project in South Africa.

INDUSTRY NEWS

* Anglo American Plc CEO Mark Cutifani said South Africa's future is looking "a lot more positive" following the election of Cyril Ramaphosa as president, Reuters reported. "We've continued to invest in South Africa, we believe in the future of South Africa and from our point of view it just got a lot more positive," Cutifani said.

* The Zimbabwean government is open to reversing certain mining policies under former President Robert Mugabe, including indigenization laws except for diamonds and platinum, Bloomberg News reported.

* Democratic Republic of the Congo President Joseph Kabila is expected to sign a widely criticized new mining code into law, Reuters reported, citing the government and mining companies. The announcement follows discussions between the mining firms and Kabila.

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.