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Vale FY'17 earnings up YOY on cash generation, debt reduction efforts

TOP NEWS

Vale FY'17 earnings up YOY on cash generation, debt reduction efforts

Vale SA posted net income of US$5.51 billion in 2017, increasing from US$3.98 billion in 2016 on the back of the group's cash generation and net debt reduction efforts. Free cash flow totaled US$8.60 billion in 2017, the highest level since 2011, while net debt declined by US$6.90 billion to come in at US$18.14 billion as of Dec. 31, 2017. The miner's board approved a dividend of 2.54 billion Brazilian reais, payable March 15.

Nutrien to tweak phosphate unit

Nutrien Ltd. plans to restructure part of its phosphate business, concentrating production at fewer operations and boosting ammonium sulfate output at its Redwater facility in Alberta. Nutrien President and CEO Charles Magro in a presentation at the BMO Global Metals & Mining conference called the decision a post-merger change of plans.

Brazil to order 50% production cut at Norsk Hydro's Alunorte refinery

Norsk Hydro ASA said the Secretariat of Environment and Sustainability, or SEMAS, in Pará, Brazil, plans to order a 50% cut in production at the company's 92.1%-owned Alunorte alumina smelter for violating environmental regulations. The secretariat will also impose daily fines of about 1 million Brazilian reais until the refinery meets the required water level.

DIVERSIFIED

* Roman Abramovich-owned Crispian Investment Ltd., United Co. Rusal Plc and Vladimir Potanin's Whiteleave Holdings Ltd. agreed to delay the sale of a 2% stake in PJSC Norilsk Nickel Co., Reuters reported. Crispian was seeking permission from a court in London to proceed with the stake sale, which Rusal is attempting to block.

BASE METALS

* A preliminary economic assessment for Nautilus Minerals Inc.'s Solwara 1 copper project in Papua New Guinea modeled first production beginning in the third quarter of 2019. The study outlines steady payable metal production of about 20,000 tonnes of copper and 29,000 ounces of gold per quarter.

* Strategic Minerals Plc completed all prerequisite conditions to close the acquisition of the Leigh Creek copper mine in South Australia.

* Heron Resources Ltd. awarded the underground mining contract for the Woodlawn zinc-copper project in New South Wales, Australia, to PYBAR Mining Services.

PRECIOUS METALS

* The board of Fresnillo Plc recommended an increased final dividend of 29.8 U.S. cents per common share, equivalent to about US$219.6 million, from 21.5 cents per share declared in 2016, after the group's 2017 attributable profit rose to US$560.6 million, including the effects of its Silverstream contract. The company attributed the improved profits in 2017 to the revaluation of foreign exchange rates on its deferred taxes and a 9.2% year-over-year increase in adjusted revenue.

* Pan African Resources Plc confirmed looming job cuts at its Evander gold mine in South Africa, saying it has started the consultation process for the potential layoffs in accordance with South African laws. The miner did not disclose the number of employees involved in the process.

* SilverCrest Metals Inc. posted an initial resource estimate for its Las Chispas property in Mexico, with inferred resources containing 402,000 ounces of gold and 32.7 million ounces of silver within 3.4 million tonnes of ore grading 3.66 g/t of gold and 297 g/t of silver.

* Arc Exploration Ltd. agreed to acquire private firm GNR Minerals Pty. Ltd., which owns the Manitou gold project in Ontario.

* Ghana will certify the value of gold exports to tighten controls on the industry and to protect revenues, Reuters wrote, citing the country's vice president Mahamudu Bawumia. The government is also considering passing a bill stating that at least half of the country's gold production would be refined locally within five years.

BULK COMMODITIES

* Siberian Coal Energy Co. OJSC has invested over US$400 million in recent years into clean coal production, including modern high-capacity washing plants and enrichment facilities to produce high efficiency and less polluting coal, Sergei Grigoriev, the company's public relations and communications director, told S&P Global Market Intelligence. The company's new environmental strategy provides for nearly US$2 billion of investments into ecological efficiency between 2017 and 2023, added Grigoriev.

* Mining contractor Downer EDI Ltd. was awarded a US$600 million mining services contract for the BHP Billiton Group and Mitsubishi Corp.-owned Blackwater coal mine in Queensland, Australia, Reuters reported.

* Adani Enterprises Ltd. rejected criticism, saying the quality of the thermal coal at its A$16.5 billion Carmichael mine in Queensland, Australia, is better than that of most of its main competitors in Asia, including China and India, The Australian Financial Review reported. According to an independent report commissioned by Adani, the Carmichael stage-one coal contains energy content of 4,800 kilocalories per kilogram, which places the project between the 25th and 29th percentile of the coal cost curve.

* Glencore Plc will renew a supply contract to purchase aluminum from Rusal in 2019, but the Russian firm is expected to cut the sales volume by 25% to 50% from the 14.5 million tonnes under the current agreement, Reuters reported.

* Cia. Siderúrgica Nacional filed an appeal against the approval of a merger between ArcelorMittal unit ArcelorMittal Brasil and Votorantim Siderurgia SA by Brazilian competition regulator, Cade, Metal Bulletin reported.

* Trade union Unifor urged Compass Minerals International Inc. to delay layoffs at the Goderich salt mine in Ontario and review whether the proper procedures were followed, BlackburnNews.com reported. The company handed notices to 48 workers at the mine on Feb. 21.

* The European Union agreed they would respond with countermeasures if the U.S. decides to go ahead with tariffs on steel and aluminum imports, Reuters wrote, citing German deputy economy minister Matthias Machnig.

* The U.S. government's proposal to impose tariffs on steel and aluminum imports from Hong Kong is "a unilateral and discriminatory act which is based on unfounded allegations," Edward Yau, Hong Kong's Secretary for Commerce and Economic Development, was quoted as saying by the Hong Kong Economic Journal.

* The Japanese steel industry wants the U.S. to exclude the country from its proposed steel import duties, as the country poses no threat to the U.S. national security, Reuters reported, citing Japan Iron and Steel Federation Chairman Kosei Shindo. "Ideally, we want the U.S. to avoid imposing any import restrictions on steel," Shindo was quoted as saying.

* The U.S. Commerce Department made a final determination that imports of some aluminum foil from China are being sold in the U.S. at less than their fair value, Reuters reported, citing an aluminum trade group. The Aluminum Association noted that anti-dumping duties of between 48.64% and 106.09%, and countervailing duty margins of between 17.14% and 80.97% would be applied against certain firms.

SPECIALTY

* Albemarle Corp. posted an attributable net loss of US$218.4 million in the fourth quarter of 2017, swinging from a year-ago net profit of US$602.1 million. The results included US$366.9 million of income tax expense related to U.S. tax reforms. Net sales in the period rose to US$857.8 million from US$696.7 million a year ago.

* POSCO agreed to buy up to 240,000 tonnes of lithium concentrate per year from Australia's Pilbara Minerals Ltd., Reuters reported. POSCO will take a 4.75% stake in Pilbara Minerals for A$79.6 million by acquiring the ASX-listed company's convertible bonds.

* Argosy Minerals Ltd. executed the second earn-in joint venture agreement on the Rincon lithium project in Argentina, confirming that the company has raised its project stake to 77.5%.

* W Resources Plc secured all approvals, including land access, for the first development stage of its Régua tungsten project in Portugal.

INDUSTRY NEWS

* Canada's Bank of Nova Scotia decided to keep its ScotiaMocatta metals trading business, but it will initiate a strategic review of the unit, Reuters reported, citing Dieter Jentsch, the firm's investment banking head.

* Miners in Papua New Guinea, including Barrick Gold Corp. and Ok Tedi Mining Ltd., reported damage to its infrastructure in the wake of a 7.5 magnitude earthquake in the country, Reuters reported.

* Zimbabwe is aiming to boost its revenue from mineral sales to US$1.78 billion this year from US$1.5 billion in 2017, Reuters reported, citing Masimba Chandavengerwa, CEO of the government marketing agency.

* Blackrock's chief investment officer for natural resources, Evy Hambro, expects mining companies to generate a significant amount of cash this year should the commodity prices hold, the Financial Times wrote. "The outlook above should leave the Company and other shareholders at the mercy of management teams in terms of them either remaining disciplined and not overinvesting capital back into the business or reverting to the bad old ways of value destruction," Hambro said.

* Zambia intends to compel miners to transport 30% of their cargo by train under a new law, which is aimed at boosting the country's rail sector, Mining.com reported.

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.