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BHP hikes dividend as US tax reforms push fiscal H1'18 profit down 37% YOY

TOP NEWS

BHP hikes dividend as US tax reforms push fiscal H1'18 net profit down 37% YOY

BHP Billiton Group hiked its interim dividend to 55 U.S. cents per share, compared to 40 cents per share a year ago, despite a 37% drop in net profit. The company posted a profit of US$2.02 billion for the six months ended Dec. 31, 2017, down from US$3.20 billion recorded a year ago. The results included after-tax exceptional losses totaling US$2.04 billion, including US$1.83 billion from U.S. tax reforms and US$210 million related to the tailings dam failure in November 2015 at the Samarco iron ore mine in Brazil.

Eramet swings to €203M profit in 2017 on favorable metals market

Eramet booked attributable net income of €203 million in 2017, swinging from a year-ago net loss of €179 million on the back of a favorable metals market. The group's results included an impairment of €42 million, compared to €167 million recorded in 2016. Operating income, meanwhile, soared 624% year over year to €608 million, helped by price developments in manganese as well as €99 million in productivity gains. Meanwhile, Eramet CEO Christel Bories said the group is eyeing an expansion in cobalt, lithium and nickel salts linked to energy transition markets like electric vehicles, and is actively seeking acquisition opportunities after previously buying a lithium deposit in Argentina, Reuters reported.

EuroChem: Phosphates market to hit end of capacity expansion in 2018

The fertilizer market is nearing the end of a large cycle of phosphate capacity additions in 2018, which will result in a "long gap" while new projects are being developed, buoying prices, said Tom Luigs, EuroChem Mineral Chemical Co. OJSC's global product manager of phosphates and potash. "This gives time for any phosphate capacity increase to be digested by the market and be caught up by the demand growth that we are seeing for the years to come, especially considering the grain stock situation," Luigs said in an interview with S&P Global Market Intelligence.

DIVERSIFIED

* BHP CEO Andrew Mackenzie said he is meeting with Elliott Management Corp. this week to discuss the activist shareholder's demand for BHP's business overhaul, Bloomberg News reported. Mackenzie reiterated that the costs of abolishing its dual-listing structure outweighed any current benefits, pushing back on investor calls for the simplification of the structure at the company, the Financial Times wrote.

* BHP plans to open data rooms for its U.S. shale assets in March as it expects to close the sale of the assets before the year's end, Mining Weekly reported. Responding to a question about whether BHP would consider "out of cycle" shareholder returns after the sale of shale assets, CEO Andrew Mackenzie said that any decisions regarding the use of sale proceeds would be influenced by the status of commodity markets and the company's priorities at the time, The Australian Financial Review wrote.

* S&P Global Market Intelligence's Metals and Mining Research group found that the number and nominal value of initial resources were both down in 2017 after an uptick in 2016. The number of initial resources reported at new projects and at new deposits within existing projects announced by junior and intermediate companies slipped to 53, from 55 in 2016. The nominal value of all metals contained in new resources fell nearly 57% to just US$46 billion, from US$106 billion in 2016.

BASE METALS

* Vedanta Resources Plc could expedite the expansion of its African zinc operations to capitalize on the recent price rally, Reuters wrote, citing the CEO of the group's Zinc International unit. Zinc International CEO Deshnee Naidoo expressed optimism over South Africa after Cyril Ramaphosa recently replaced Jacob Zuma, noting improving zinc market conditions as demand grows amid supply deficits for both zinc concentrate and metal.

* Mongolia can develop a power plant at its Tavan Tolgoi coal mine by 2021 to supply Rio Tinto's Oyu Tolgoi copper mine, Reuters wrote, citing the country's energy officials.

* Copper Mountain Mining Corp.'s attributable earnings in the fourth quarter of 2017 jumped to C$16.5 million from C$2.1 million a year ago, pushing full-year earnings to about C$48.0 million, from C$7.7 million in 2016.

* Grupo México SAB de CV-owned Southern Copper Corp. won a tender to develop the Michiquillay copper mine in Peru, Reuters reported. Southern Copper's proposal included the transfer of US$400 million to the government and 3% royalties, beating Cía. Minera Milpo SAA's offer, which proposed US$250 million in transfers and 1.875% royalties.

PRECIOUS METALS

* AngloGold Ashanti Ltd.'s loss attributable to shareholders for the fourth quarter of 2017 widened to US$73 million from a loss of US$7 million in the year-ago quarter. The company sold about 1 million ounces of gold at an average price of US$1,276 per ounce in the quarter, compared to sales of 945,000 ounces at an average of US$1,216 per ounce a year ago.

* Harmony Gold Mining Co. Ltd.'s acquisition of the Moab Khotsong gold project in South Africa from AngloGold Ashanti became unconditional after all the conditions precedent were met. The transaction will become effective March 1.

* Independence Group NL's net profit attributable to shareholders in the first half of fiscal 2018 dropped 84% year over year to A$3.2 million amid a depreciation and amortization expense of A$123 million in the half, including a A$69.9 million charge on the Nova mine, compared to A$47.9 million a year earlier.

* China Hanking Holdings Ltd. unit Hanking Australia Investment agreed to make a recommended conditional takeover bid for all of the issued shares of Primary Gold Ltd. at 5.75 Australian cents per share, valuing the Australia-listed miner at about A$37.5 million.

* Newmont Mining Corp. declared a fourth-quarter 2017 dividend of 14 U.S. cents per share, which is nearly three times higher than the dividend of 5 cents per share announced in the year-ago period.

* Tahoe Resources Inc. revised the terms of its revolving credit facility, now consisting of a US$175 million revolving credit facility and a US$25 million accordion feature maturing July 19, 2021.

* Fancamp Exploration Ltd. entered two separate deals to acquire the Woman River occurrence and Brunswick North property, prospective for gold and base metals in Canada.

* Paramount Gold Nevada Corp. exercised its option to reduce the existing net smelter royalty on the Grassy Mountain gold property in Oregon from 6% to 1.5% and acquire all of the rights to the private land at the site.

* Canadian Orebodies Inc. purchased the Goodchild lake mining property that covers highly prospective landholding in the middle of its Black Raven gold project in Ontario.

* Evrim Resources Corp. signed a letter of intent with a unit of Coeur Mining Inc., allowing the latter to acquire up to an 80% stake in the Sarape epithermal gold-silver project in Sonora, Mexico.

* Saturn Metals Ltd.'s A$7 million IPO closed earlier than its expected Feb. 23 closing date and was heavily oversubscribed.

BULK COMMODITIES

* Russia's PJSC Novolipetsk Steel posted a 39% year-over-year jump in net income for the fourth quarter of 2017 to US$428 million thanks to higher steel prices. Revenue in the quarter increased 43% on a yearly basis to US$2.82 billion on the back of a 20% improvement in steel product sales to 4.36 million tonnes.

* Fortescue Metals Group Ltd.'s net profit and revenue in the first half of its fiscal 2018 slumped 44% and 18% on a yearly basis, respectively, to US$681 million and US$3.68 billion. The group declared an interim fully franked dividend of 11 Australian cents per share. Fortescue, meanwhile, secured a US$1.4 billion term loan facility from Chinese, Australian and European financial institutions, which will be used to redeem a portion of the company's senior secured notes maturing 2022 through a tender and/or redemption, lowering annual borrowing costs by about US$80 million.

* Ternium SA's net income in the fourth quarter of 2017 rose to US$198.0 million, up from net income of US$144.8 million in the year-ago period. Steel shipments in the period rose 43% year over year to 3.4 million tons, while iron ore shipments increased 2% to 875,000 tons. Sales in the quarter jumped 50% to US$2.78 billion on a yearly basis.

* BHP CEO Andrew Mackenzie said the company remains interested in establishing a joint venture for the Jansen potash project in Saskatchewan to share development costs, the Financial Times wrote. However, he added that chances of a deal in the near term are slim.

* United Co. Rusal Plc and En+ Group plc denied recent media speculation that Russian billionaire Oleg Deripaska will step down as the companies' president, saying no such executive changes have been made or discussed yet. According to the Russian industrial giants, possible executive changes will be considered in board meetings scheduled for Feb. 22.

* Legal and accounting advisers reviewing bids for Essar Steel India Ltd are recommending that all bids be disqualified, Bloomberg News reported, citing anonymous sources. Global steel giant ArcelorMittal and a consortium led by Russia's VTB Group were the only two bidders for the insolvent steel company.

* India approved a plan to allow private companies to participate in bidding for coal mines for commercial production, Reuters reported, citing Coal Minister Piyush Goyal. The move is expected to end state-owned Coal India Ltd.'s near-monopoly on mining and selling coal in the country, after more than four decades of restrictions.

* South Africa's Department of Mineral Resources warned that the Optimum coal mine in the country will be suspended should its managers fail to comply with the site's social and labor plan, Bloomberg News reported, citing an emailed statement from the department. The mine was given 60 days to achieve compliance or face a suspension.

* Steel Dynamics Inc. proposed a first-quarter cash dividend of 18.75 U.S. cents per share, a 21% increase over the company's 2017 quarterly rate.

* Adding to concerns over U.S. metals tariffs, a German economy ministry representative said the European Union will respond "appropriately" if the charge also applies to European steel imports, Reuters reported.

* Canada is hopeful that it will be exempt from the recommendation of the U.S. Department of Commerce for tariffs on aluminum and steel imports, Bloomberg News reported, citing Aluminum Association of Canada President Jean Simard.

SPECIALTY

* Thor Mining PLC decided to accelerate development of its Pilot Mountain tungsten project in Nevada and kicked off the second phase of metallurgical testing and scoping study work. The decision came after the U.S. Department of the Interior published a draft list of critical minerals in the Federal Register, which includes tungsten.

* Mustang Minerals Corp. agreed to acquire mineral rights to several lithium and rare metal bearing pegmatites in Manitoba from Cabot Corp. unit Tantalum Mining Corp. of Canada Ltd.

* Rock Tech Lithium Inc. signed a letter of intent through its Minerales de Baterias SA de CV unit for the acquisition of the Nogalito lithium property in Mexico.

* Fission Uranium Corp. posted an updated resource estimate for the Triple R deposit, part of the Patterson Lake South uranium property in Canada's Athabasca Basin. The deposit now hosts indicated resources of 87.8 million pounds of U3O8 based on 2.2 million tonnes at an average grade of 1.82% U3O8 as well as an inferred resource of 52.9 million pounds of U3O8 within 1.3 million tonnes at an average grade of 1.80% U3O8.

* PJSC Alrosa plans to hold two auctions for the sale of rough and polished diamonds at the Hong Kong International Diamond, Gem & Pearl Show, which is organized by the Hong Kong Trade Development Council, from Feb. 27 to March 3.

INDUSTRY NEWS

* The Republic of the Congo will start debt relief talks with creditors including Glencore Plc and Trafigura Beheer BV for restructuring over US$2 billion in debt and appointed Lazard as an adviser in upcoming talks with the companies, Reuters reported, citing sources familiar with the matter.

S&P Global Market Intelligence is owned by S&P Global Inc.

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.