TOP NEWS
Top Vale shareholders aim to distribute company control in new shareholder pact
Major Vale SA shareholders are close to endorsing a new shareholder pact that would disperse share ownership in Vale within six years, under which no major shareholder will control the decision making for the company, Reuters reported, citing sources. Vale's current 20-year shareholder pact is set to expire in April, and talks among leading shareholders, including Bradespar SA, Mitsui & Co. Ltd. and Brazilian pension fund Previ, are underway for the replacement. Vale, however, clarified that there is no discussion or deliberation within the company about any possible unification of its preferred and common shares.
Ma'aden's FY'16 profit slides 33.8%
Saudi Arabian Mining Co.'s net profit in full-year 2016 fell 33.8% year over year to 400.6 million Saudi Arabia riyals, or 0.34 riyals per share. In the fourth quarter of 2016, the company swung to a net profit of 15.7 million riyals, compared to a 5.7 million riyal net loss in the year-ago quarter.
Alcoa Corp.'s Portland aluminum smelter in Victoria, Australia, will be able to continue operations until 2021, after the company secured a funding package of over A$200 million from the Australian government, The Australian reported.
BASE METALS
* Yunnan Tin Co. Ltd. expects to swing to a net profit of between 76 million Chinese yuan and 114 million yuan, or between 5.16 fen per share and 7.74 fen per share, in 2016, compared to a net loss of about 1.97 billion yuan, or 1.34 yuan per share, in 2015.
* TNG Ltd. is on track with its planned spinout of its noncore Australian base metal assets, with a listing on the ASX set for early in the second quarter. The company is demerging its base metals assets in the Northern Territory into subsidiary Todd River Resources Ltd.
* Australian Vanadium Ltd. agreed to sell its precious and base metals rights in the Gabanintha project in Western Australia, and its 100% equity in the Peak Hill project located in the Bryah Basin.
* On the back of increased production volumes, Finland's state-owned Terrafame swung to €12.2 million operating profit in the fourth quarter of 2016, from a €42.5 million loss in the previous quarter, Reuters reported. Nickel output in the quarter jumped 63% over the third quarter to 3,875 tonnes, while zinc production rose 37% to 8,680 tonnes.
* Copper miner Antofagasta Plc is exiting the Alto Maipo hydroelectric power project by selling its entire 40% stake to partner AES Gener, the Chilean arm of U.S. power group AES Corp., Reuters reported, citing CEO Ivan Arriagada. The company signed up to the Alto Maipo project to secure power for its Los Pelambres mine in Chile.
* A civil court ruled that Antofagasta Plc's Los Pelambres and contractor company Fraser Alexander Chile will have to pay 40 million Chilean pesos to the family of a worker who died in an accident in November 2010, daily Diario Financiero reported.
* Moody's released upward adjustments to its pricing sensitivities for base metals this year, expecting political issues and speculation to continue driving short-term market activity and high volatility. Moody's expects increasing base metal prices to fall back over the course of 2017, except zinc prices, in the absence of "meaningful improvement in supply/demand fundamentals."
PRECIOUS METALS
* White Cliff Minerals Ltd. acquired an additional 1% of the Aucu gold project in Kyrgyz Republic from an external shareholder, Somerley Ltd., by issuing 12 million new ordinary shares.
* OceanaGold Corp. poured the first gold dore bars at its Haile gold mine in South Carolina, producing 445 ounces.
* AngloGold Ashanti Ltd. is in talks with unions over its plan to lay off 849 workers out of its 25,000 employees in South Africa, Reuters reported, citing a letter signed by AngloGold Ashanti COO Chris Sheppard. The letter, addressed to unions, attributed the planned layoffs to "operational requirements."
* S&P Global Ratings revised its outlook on Russian gold miner Polyus Gold International Ltd. and its subsidiary PJSC Polyus to positive from stable, while the affirming long-term corporate credit rating on both companies at BB-. The outlook revision reflects the expectation that Polyus Gold will maintain a conservative financial policy as it moves forward with a new dividend policy and a planned secondary public offering.
* An independent preliminary economic assessment for Geologix Explorations Inc.'s Tepal gold-copper project in Mexico estimated an after-tax net present value of US$169 million, at a 5% discount rate, and an internal rate of return of 24%. The project will require initial CapEx of US$214.2 million to establish an open-pit contract mining operation.
BULK COMMODITIES
* PAO Severstal's crude steel production increased 2% to 11.6 million tonnes and hotel metal production improved 1% to 9.2 million tonnes in full-year 2016, compared to the previous year. Sales for consolidated steel products and Russian Steel products each declined 1% year over year to about 10.7 million tonnes.
* CITIC Ltd. may be forced to suspend its Sino-Iron mine in Western Australia as Clive Palmer continues to delay the approval of an expansion for the US$10 billion project, The Australian reported. "Unless that is approved, the project will have to come to a halt in a few months' time," CITIC lawyer Charles Scerri QC said.
* Hesteel Co. Ltd.'s net profit attributable to shareholders is expected to range between 1.50 billion Chinese yuan and 1.60 billion yuan for full-year 2016, representing an increase of between 161.57% and 179.01% from the 573.5 million yuan posted a year ago.
* Gansu Jiu Steel Group Hongxing Iron & Steel Co. Ltd. expects to swing to a net profit of around 78 million Chinese yuan in full-year 2016, from a net loss of 7.36 billion yuan posted a year ago, due to a rebound in steel prices and reduced operational costs in 2016.
* Strategic Minerals Plc witnessed record domestic sales of magnetite in full-year 2016 from its Cobre mine in New Mexico. Domestic magnetite sales increased 24% year over year to about US$1.6 million, for 25,385 short tons.
* SouthGobi Resources Ltd. received a lawsuit notice from the Khan-Uul district civil court of first instance in Mongolia, filed by a fuel supplier of its subsidiary, SouthGobi Sands LLC, regarding the nonpayment of 22.2 billion Mongolian tugriks. The subsidiary disputes the amount claimed by MT in the proceedings and has filed an application with the court to dismiss the litigation.
* Usinas Siderúrgicas de Minas Gerais SA CEO Rômel de Souza plans to open arbitration proceedings against Sumitomo Corp. as a result of the Japanese group's decision to reject a capital reduction for 1 billion Brazilian reais in iron ore unit Mineração Usiminas SA, a joint venture in which Sumitomo owns a 30% stake with the remaining held by Usiminas. The funds are crucial to the Brazilian steelmaker because they are part of the creditors' demands in its debt renegotiation, daily Valor Econômico reported.
* The environmental regulator of Brazil's Sao Paulo state, Cetesb, fined Vale's fertilizers unit Vale Fertilizantes SA 8 million Brazilian reais over the emission of pollutants, including nitrate gases and particulate matter, during a Jan. 5 fire incident at its Cubatão facility, daily Valor Econômico reported.
* Mineração Morro do Ipê, formerly known as MMX Mineração, owner and operator of the Tico Tico and Ipê mines in Serra Azul province in Minas Gerais state, will resume operations in March this year, Notícias de Mineração reported.
* Davenport Resources Ltd. traded as low as 20% below its IPO price of 20 Australian cents on its first day on the ASX. However, the Australian potash explorer recovered most of its losses, closing 2.5% lower at 19.5 cents on Jan. 20.
* Aluminum Corp. of China Ltd. expects its net profit attributable to shareholders to increase about 85% year over year to 380 million Chinese yuan in 2016. Total profit in the period is expected to increase about 7.3 times the prior year's profit, to 1.60 billion yuan, based on initial calculations.
* OJSC Novolipetsk Steel's crude steel output in the fourth quarter of 2016 increased 8% year over year to 4.2 million tonnes due to improved productivity following repairs and strong demand for its products, including billet exports. However, group sales in the quarter dropped 4% to 3.6 million tonnes, attributed to a 17% decline in semifinished product sales.
* CITIC Resources Holdings Ltd. transferred US$89.8 million plus interest to the Qingdao Public Security Bureau, in line with a civil court ruling, for allegedly breaching an aluminum ingots supply contract with Shanxi Coal Import & Export Co. Ltd.
* Yanzhou Coal Mining Co. Ltd. unit Yancoal Australia Ltd.'s attributable coal output totaled 4.51 million tonnes in the fourth quarter of 2016, up 21% from the corresponding year-ago period. Sales volume during the period came in at 6.18 million tonnes, reflecting a 25% year-over-year increase.
SPECIALTY
* Kidman Resources Ltd. and Marindi Metals Ltd. have been ordered by the Supreme Court of Western Australia to attend mediation to resolve a dispute over the lithium rights at Kidman's Mount Holland lithium project. Marindi launched legal action against Kidman in mid-November 2016, claiming that the two companies struck a deal under which it holds an option to acquire the lithium rights at the Earl Grey deposit.
* Canada's Lithium Americas Corp. has landed a US$112 million investment by The Bangchak Petroleum Public Co. Ltd. to fund the construction of its Cauchari-Olaroz lithium project in Argentina.
* De Beers SA is set to pilot fixed-price forward contracts in its auction sales in a bid to give customers price certainty and to guarantee their access to future supply, Mining Weekly reported.
* Mustang Resources Ltd. sent its first commercial batch of rubies to U.S. service providers and customers, comprising 6,221 carats, including two rare 24-carat stones. Meanwhile, the company completed the commissioning of the relocated processing plant at its Montepuez ruby project in Mozambique, with first sales revenue expected in the first half.
* Albemarle Corp.'s bondholders submitted €533.3 million in principal amount of 1.875% senior notes due 2021 under its cash tender offer by the early tender date of Jan. 18. Based on the results, the company will not accept for repurchase the 4.150% senior notes due 2024 as the €533.3 million will exceed the maximum repurchase amount of about US$325.2 million. The tender offer has been closed.
INDUSTRY NEWS
* In 2016, Africa produced nearly 17 million ounces of gold, representing almost 18% of worldwide total production. Gold production in the region is in a state of flux, as the geopolitical boundaries of top gold-producing countries are beginning to shift.
* The developing countries that rely heavily on mining are expected to be hit the hardest by automation in the mining industry, with as much as a 4% decline in national GDP, The Guardian wrote, citing a recent study on the impact of automation in the mining sector. "If you're moving from mines that employ 5,000 to 10,000 people down to 500 or 1,000, then you're obviously not going to get the same amount of local jobs," a co-author of the study, Howard Mann, said.
* The number of employees in Chile's mining sector doubled between 2006 and 2015, from 132,807 to 238,454, but copper production only increased from 5.36 million tonnes to 5.76 million tonnes in the period, according to Chilean copper commission Cochilco's figures, daily El Mercurio reported.
* The U.K.'s exit from the European Union is slowing down Hong Kong Exchanges & Clearing Ltd.'s launch of a London-Hong Kong connect, which aims to introduce futures products of the London Metal Exchange to Hong Kong and mainland investors, according to CEO Charles Li.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
The Daily Dose is updated as of 7 a.m. London time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.