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Randgold CEO: Miners to join forces in opposing DRC's new mining code

TOP NEWS

Randgold CEO: Miners to join forces in opposing DRC's new mining code

International mining companies are gearing up for a coordinated campaign against the Democratic Republic of the Congo's proposed new mining code, looking to establish a formal group that will head lobbying efforts, Randgold Resources CEO Mark Bristow told Reuters. The proposed new mining code has not been signed into action yet, according to the country's Chamber of Mines. However, this could happen within the next couple of days, chamber President Simon Tuma-Waku told S&P Global Market Intelligence on the sidelines of the Mining Indaba in Cape Town, South Africa. "It is on the President's table right now, but it has not been signed yet," Tuma-Waku said.

MMK's Q4'17 profit surges YOY amid steel price rally

Rising metals prices boosted PJSC Magnitogorsk Iron & Steel Works's financial results in the fourth quarter of 2017, pushing profit up year over year to US$375 million from US$208 million a year ago. EBITDA climbed to US$592 million from US$456 million, and revenue increased to US$1.95 billion from US$1.55 billion.

ThyssenKrupp workers approve labor deal for proposed merger with Tata Steel

ThyssenKrupp AG workers voted in favor of a labor deal that will safeguard jobs and plants in the German steelmaker's planned joint venture with Tata Steel Ltd. until 2026, Reuters reported. According to the report, 71% of the about 20,700 members of the IG Metall union participated in the vote, and more than 92% approved the deal.

DIVERSIFIED

* Activist shareholder Elliott Management once again renewed a push for a simpler structure at BHP Billiton Group after commissioning a study that argues dropping the dual-listing structure could add over US$22 billion in shareholder value, Bloomberg News reported. The report projected a US$14.1 billion jump in the company's market valuation and US$8.7 billion via the release of Australian tax credits through dividends and buybacks.

* Mike Fraser, COO of South32 Ltd.'s African operations, said the company has no plans to withdraw from the South African market, following speculation that the creation of South Africa Energy Coal as a stand-alone business might be part of an exit strategy. "I can absolutely assure you, this is not the case," Fraser said at the Mining Indaba in Cape Town.

* An executive at Anglo American Plc's South African unit flagged the possibility of asset acquisitions in the country, Bloomberg News reported. "We no longer have any 'for sale' sign," said Norman Mbazima, deputy chairman of the company's South African unit, adding that there was a possibility Anglo American will invest in the country.

* The Australasian Centre for Corporate Responsibility is seeking to gain support from about 100 investors to co-file a resolution at Rio Tinto's upcoming annual general meeting to ask the miner to quit the Minerals Council of Australia, The Guardian reported.

* Marubeni Corp.'s energy and metals business posted a net income of ¥8.2 billion in the nine months to Dec. 31, 2017, improving by ¥36.6 billion from the same period a year ago, driven by improved returns from its Chilean copper and Australian coal projects, among others. The group's attributable profit in the period rose 53% year on year to ¥164.8 billion.

BASE METALS

* Democratic Republic of the Congo state-miner Gecamines SA intends to renegotiate contracts with its international partners this year to secure a bigger share of revenues for the country, Reuters reported. Gecamines' partners on mining projects include Glencore Plc, China Molybdenum Co. Ltd. and Ivanhoe Mines Ltd.

* The Freeport-McMoRan Inc.-operated Cerro Verde copper mine in Peru posted an 89.4% year-over-year increase in its net profit for the fourth quarter of 2017, coming in at US$217.6 million, as higher copper prices offset a decline in sales volumes, Metal Bulletin reported.

* Duran Ventures Inc. agreed to purchase and process high-grade copper sulfide mineralized material from private Peruvian company Otuzco Copper Mining Corp. SAC, and the companies intend to equally share the profits by unifying operations.

* Jubilee Metals Group PLC intends to exercise its option to acquire a 40% interest in BMR Group Plc's Kabwe zinc-lead project in Zambia, which will conditionally take the company's interest in the project to 57.41%, as it holds a 17.41% stake in BMR.

* An initial JORC-compliant resource estimate for Orion Minerals NL's past-producing Prieska zinc-copper property in South Africa pegged indicated and inferred resources totaling 24.2 million tonnes grading 3.47% zinc, 1.23% copper, 0.21 g/t of gold and 9.36 g/t of silver for 873,655 tonnes of zinc, 297,129 tonnes of copper, 163,340 ounces of gold and 7.3 million ounces of silver. The maiden resource far exceeded the company's expectations.

PRECIOUS METALS

* Randgold Resources Ltd. is looking to drop its relationship with Dan Gertler as the U.S. put sanctions on the Israeli billionaire over charges of corruption, Bloomberg News reported. The company was partnering with Gertler's Fleurette Group for joint development of the Moku-Beverendi gold project in the Democratic Republic of the Congo. "We've called force majeure and given them notice that in our view they are in default because we cannot continue to operate under these terms," Randgold CEO Mark Bristow said.

* Alacer Gold Corp. posted an attributable net profit of US$82 million, or 28 U.S. cents per share, in 2017. The company met its production guidance for the year with output of 168,163 ounces, on a 100% basis, while all-in sustaining costs per ounce, at US$686, were lower than guidance.

* Anglo American Plc unit Anglo American Platinum Ltd. updated the forecast for 2017 and said it expects its headline earnings to jump to between 3.65 billion South African rand and 4.00 billion rand, compared to 1.87 billion rand in 2016.

* The demand for gold was down 7% in 2017 to an eight-year low of 4,071.7 tonnes, Reuters reported, citing the World Gold Council. China bought 953.3 tonnes of gold in 2017, and India purchased 726.9 tonnes. In 2018, demand from China is expected at 900 to 1,000 tonnes, and Indian demand is expected at between 700 and 800 tonnes.

* Gran Colombia Gold Corp. plans to raise up to US$152 million through a unit offering. Each unit is expected to consist of US$1,000 of senior secured gold-linked notes and a number of common share purchase warrants.

* Highland Gold Mining Ltd.'s definitive feasibility study for the Kekura project in Russia pegged a net present value, discounted at 10%, of US$311 million and a 38% internal rate of return. The project's average annual gold production is estimated at 172,000 ounces for the first eight years and 46,000 ounces for the final eight years.

* Anglo Asian Mining Plc expects to produce between 78,000 and 84,000 gold equivalent ounces in fiscal 2018, a 13% increase over full-year 2017 production of 71,461 gold equivalent ounces.

* A preliminary economic assessment for Cardinal Resources Ltd.'s Namdini gold project in Ghana confirmed the project to be a technically and financially robust, low-cost mining opportunity with the potential to generate strong positive cash flows. Depending on the eventual production scenario chosen, average annual production will range from 159,000 to 330,000 ounces, while all-in sustaining costs will be between US$701/oz and US$794/oz.

* Gold Road Resources Ltd. subsidiary Gold Road (South Yamarna) Pty. Ltd. agreed to acquire a 50% stake in the South Yamarna gold project in Western Australia from Sumitomo Metal Mining Co. Ltd.'s Sumitomo Metal Mining Oceania Pty. Ltd. unit for A$7 million in cash.

* Centerra Gold Inc. is partially restarting mill operations at its Mount Milligan copper-gold mine in British Columbia. Mill operations, which were suspended in late December 2017 due to insufficient water resources, are expected to achieve sustainable throughput levels of approximately 30,000 tonnes per day by mid-February.

* A preliminary economic assessment on a two-phase expansion of Maya Gold & Silver Inc.'s 85%-owned Zgounder silver mine in Morocco defined a posttax net present value of US$200.2 million, discounted at 6.5%, with a 118% internal rate of return. The study looks at increasing annual silver production to 1.4 million ounces and subsequently to 4.8 million ounces.

BULK COMMODITIES

* Industrial workers and employers in southwestern Germany reached a deal over wages and working hours, providing for a 4.3% pay hike from April and other payments over 27 months, Reuters reported, citing IG Metall union negotiator Roman Zitzelsberger.

* Traders told The Australian Financial Review that Fortescue Metals Group Ltd. further discounted its high-grade iron ore in China to a record 33% in February after CEO Neville Power had said the December 2017 quarter is expected to see the worst of price discounts.

* Minnesota-based Tacora Resources Inc. filed for an initial public offering on the Toronto Stock Exchange as it looks to restart the Scully iron ore mine in Newfoundland and Labrador, The Globe and Mail reported, citing a prospectus filed Feb 5. According to the report, no figure was specified for the IPO, but the company estimates it needs about C$205.5 million to restart the mine.

* Hainan Mining Co. Ltd. will invest 50 million Chinese yuan to set up an electric power unit in Hainan province, China, in line with the local provincial government's initiative to introduce more private capital to the local power sector.

* European steel association Eurofer estimates that apparent steel consumption in the 28 countries of the European Union will rise 1.9% this year, though consumption growth is seen slowing to 1.4% in 2019, Reuters reported.

* Iron ore shipments from Australia's Port Hedland to China dropped 11.3% month on month to 34.7 million tonnes in January, the lowest since July 2017, Reuters reported, citing port data.

* Nutrien Ltd. expects to book EPS of between US$2.10 and US$2.60 for full-year 2018 from continuing operations, excluding incremental depreciation and amortization related to purchase price allocation of between US$150 million and US$300 million. Consolidated EBITDA for the year is expected to reach between US$3.2 billion and US$3.7 billion.

* JSW Steel Ltd. and Tata Steel Ltd. reportedly submitted bids for debt-laden Bhushan Steel Ltd., Reuters reported, citing three people familiar with the process. ArcelorMittal, which had been reported to be interested in buying Bhushan, opted out of the bidding process.

SPECIALTY

* Michael Austin, vice president of BYD America Corp., said at a recent Bloomberg New Energy Finance event that "cobalt is the new cocaine" and predicted a "ripple effect" in the commodity's pricing amid looming changes in the Democratic Republic of the Congo's mining code.

* Dempsey Minerals Ltd. signed an exclusive option agreement with Australian company Blue Sky Lithium Pty. Ltd. to acquire the latter's interests in mining tenements in the lithium-bearing Hombre Muerto salt flat in Argentina's Catamarca province.

* Senator Minerals Inc. agreed to acquire Uranium City Resources Inc., which holds the Crackingstone uranium project in Saskatchewan, for 4 million shares.

INDUSTRY NEWS

* The Indian government is working on revising rules and establishing deadlines for miners to complete exploration over mineral leases that expire in 2020, Mining Weekly reported. Miners have been invited to comment on the proposed changes and will have until Feb. 16 to do so.

* South African Mining Minister Mosebenzi Zwane, in his opening speech at Mining Indaba, pledged an open-door policy and active engagement with stakeholders to promote growth and investment in the country's mining sector but failed to address the most pressing topic, the controversial reviewed mining charter.

* South Africa and Niger signed a memorandum of understanding to cooperate in geology and mining, South Africa's Department of Mineral Resources announced on the sidelines of Mining Indaba.

* Exploration financing targeted for Africa accounted for 15.9% of the global amount raised in the September 2017 quarter. The US$1.57 billion raised in the quarter was 37% more than the US$1.15 billion raised in the year-ago quarter. Gold was the most valuable commodity produced in the African region in 2017, with an estimated US$18.7 billion in sales revenues, calculated using average 2017 commodity prices and aggregated production data by commodity, the Metals and Mining Research team at S&P Global Market Intelligence said. Copper and iron ore were next, with estimated revenues of US$11 billion and US$6.2 billion, respectively.

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.