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South32 will not exit South Africa, says COO

TOP NEWS

South32 will not exit South Africa, COO says

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, South Africa.

Simpler BHP structure would boost shareholder value, Elliott says

Activist shareholder Elliott Management once again urged BHP Billiton Group to immediately review its dual-listed structure after commissioning a study that argues reorganizing as a single-listed entity in Australia would add over US$22 billion in shareholder value, Bloomberg News reported. A single entity allow greater flexibility to use stock in any acquisitions, make future spinoffs easier, reduce costs and bolster transparency, according to the FTI Consulting study. The report projected a US$14.1 billion jump in market valuation and US$8.7 billion via the release of Australian tax credits through dividends and buybacks.

Randgold doubles FY'17 dividend as profit rises YOY

Randgold Resources Ltd. doubled its dividend to US$2 per share for 2017 after posting a profit attributable to shareholders of US$278.0 million up from US$247.5 million recorded in 2016. Gold production increased 5% to 1.32 million ounces, exceeding the stated guidance on the back of higher throughput and recoveries, while gold sales increased 7% year over year to US$1.65 billion, thanks to a 6% increase in gold sold across the group and higher average gold prices.

DIVERSIFIED

* Anglo American Plc flagged the possibility of asset acquisitions in South Africa, Bloomberg News reported, citing Norman Mbazima, deputy chairman of the company's South African unit. The miner, however, added that any purchases would have to be competitive and deliver the right return on investment.

* 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 third 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 stated. Copper and iron ore were next, with estimated revenues of US$11 billion and US$6.2 billion, respectively.

* Bold Baatar, Rio Tinto's head of energy and minerals, said the company will compete with companies such as Facebook and Google for workers that will help with its mining automation project, Bloomberg News reported. Baatar said two-thirds of Rio Tinto's engineers are miners but this number will be halved within a decade.

* 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.

BASE METALS

* 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.

* 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 Deep Sulfide deposit hosts the bulk of the resource, with 22.6 million tonnes in the inferred category.

* Landore Resources Ltd. reported a higher nickel equivalent resource estimate in the indicated and inferred categories at the B4-7 deposit on its Junior Lake polymetallic project in Ontario. Drilling at the deposit, which is prospective for nickel, copper, cobalt, platinum, palladium and gold, increased the total resource by 43% over the previous estimate to 3.3 million tonnes grading 1.20% nickel equivalent in the indicated category and 568,000 tonnes in the inferred category, for a total of 46,661 tonnes of contained metal.

* Galway Metals Inc. bought 14 claims next to its Estrades project in Quebec, where it is exploring for base and precious metals.

PRECIOUS METALS

* Sibanye Gold Ltd. produced 1.4 million ounces of gold from South Africa in 2017, exceeding its guidance of between 1.35 million and 1.38 million ounces, after output in the second half rose 4% over the first half.

* 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.

* Silver Viper Minerals Corp. signed a nonbinding letter of intent to acquire Pan American Silver Corp.'s La Virginia gold project in Mexico.

* Gold Road Resources Ltd.'s Gold Road (South Yamarna) Pty. Ltd. subsidiary 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.

* Saturn Metals Ltd. aims to raise up to A$7 million in an IPO of up to 35 million shares at 20 cents each. The proceeds will fund exploration on the Apollo Hill and Ra Resource areas in Western Australia.

BULK COMMODITIES

* Nutrien Ltd. expects to book earnings of between US$2.10 and US$2.60 per share in 2018 from continuing operations, excluding incremental depreciation and amortization related to purchase price allocation of between US$150 million and US$300 million. EBITDA in 2018 is expected to reach between US$3.2 billion and US$3.7 billion.

* 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. The approval was seen as a precondition to getting the deal done as it removes the risk of strikes and potential delays.

* Tata Steel and JSW Steel Ltd. have reportedly submitted bids for debt-laden Bhushan Steel Ltd., while ArcelorMittal, which was previously reported to be interested in the Indian firm, did not submit an offer, Reuters wrote, citing sources.

* Mitsubishi Corp.'s net income for its metals segment in the nine months that ended Dec. 31, 2017, jumped 37% year over year to ¥178.7 billion thanks to higher realized prices and dividend income from Australian coal and other mineral resources. Citing higher market prices for coal and other minerals, the Japanese trading house now expects its metals segment to post an attributable profit of ¥240 billion in its fiscal 2018, up from previous expectations of ¥195 billion.

* As fertilizer prices continue to recover, PJSC PhosAgro boosted its overall production in the fourth quarter of 2017 by over 13% to 2.3 million tonnes. Nitrogen-based products registered the largest increase in the quarter, of 38% to 561,500 tonnes, while output of phosphate-based fertilizers climbed 7% to 1.7 million tonnes. Production of phosrock and nepheline also showed improvement, growing to 2.6 million tonnes from 2.5 million tonnes a year ago.

* United Co. Rusal Plc's aluminum production increased 1.4% quarter over quarter to 944,000 tonnes in the fourth quarter of 2017, and alumina and bauxite production improved 1.3% and 7.4%, respectively, to 1.99 million tonnes and 2.95 million tonnes. Nepheline production 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.

* Industrial workers and employers in Germany made progress in discussions after a series of 24-hour strikes over pay and working hours, and the parties are expected to complete a deal at another round of meeting, Reuters reported.

* 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 completing the largest debt restructuring deal in Southeast Asia in 2017, according to Director and Corporate Secretary Dileep Srivastava, who 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.

* Police raided POSCO's plant in Pohang, South Korea, and confiscated documents and other materials in connection with a deadly gas leak that killed four workers, The Korea Times wrote. Authorities suspect the workers might have inhaled nitrogen gas from a leak in the facility.

* Adani Enterprises Ltd. will fight a A$12,000 fine for alleged contamination of wetlands near its Abbot Point coal terminal in Queensland, Australia, during Cyclone Debbie in 2017, The Australian Financial Review reported. The company has also been accused of tempering with samples sent to the Queensland Department of Environment during the investigation last year.

* ASX-listed Avenira Ltd. reported a higher inferred mineral resource estimate at its Baobab phosphate project in Senegal, and the resource area is now continuous over 20 kilometers from the Gandal to Gadde Escale prospects. Inferred resource tonnage rose almost 11% over the October 2017 estimate to 173 million tonnes grading 18% phosphorous pentoxide at a cutoff of 15% phosphorous pentoxide. The indicated resource at the project remained unchanged.

SPECIALTY

* PJSC Alrosa is actively looking to expand its footprint globally, the company's vice president for Africa told S&P Market Intelligence on the sidelines of the Mining Indaba in Cape Town, South Africa. "We are looking to expand," Vladimir Marchenko said in an interview, noting that even areas such as Latin America were not ruled out. "At the moment, we are mostly focused on Angola [outside of Russia], but the company is actually actively looking for opportunities to expand the business worldwide."

* Phillip Barton, CEO of De Beers SA's South African operations, said the company secured 16 licenses out of 52 pending diamond exploration applications in South Africa and is working to get the others approved, Reuters reported. Barton said the company believes that South Africa is a "prime exploration destination" and still holds potential for new diamond finds.

* Senator Minerals Inc. agreed to acquire Uranium City Resources Inc. for 4 million shares. Uranium City holds the Crackingstone uranium project in Saskatchewan, which covers about 2,407 hectares and hosts the historic Gulch mine.

* Anson Resources Ltd. signed a deal to acquire the existing oil and gas well and lease at its Paradox lithium project in Utah, potentially reducing the project's infrastructure costs.

INDUSTRY NEWS

* South African Mining Minister Mosebenzi Zwane 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. "We continue to prioritize the promotion of good working relations with right holders, and we engage on a continuous basis on issues which will advance the growth and development of the sector," Zwane told delegates in his opening speech on the first day of this year's Mining Indaba in Cape Town, South Africa.

* 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 the Mining Indaba conference in Cape Town, South Africa. The cooperation will focus on the entire value chain of mining, from exploration to beneficiation, and teams from both countries are due to meet at the conference to assess first steps to implement the memorandum.

* 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 see a lot of progress.

* 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 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.