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All foreign suppliers will 'feel the pain' if Trump imposes metal tariffs

TOP NEWS

All foreign suppliers will 'feel the pain' if Trump imposes metal tariffs

President Donald Trump's threat to impose expansive tariffs on steel and aluminum is already boosting customer inquiries at U.S. mills, along with U.S. metal prices. However, how much the direct U.S. aluminum and steel sectors may benefit from a tariff remains an open — and fraught — question, according to metals experts. "Steel mills are reporting they're getting a lot of communication from buyers that come around occasionally or never at all," said Doug Hilderhoff, CRU Group's principal analyst on steel. The implication is that customers that rely on imports are already seeking alternative metal sources from U.S. suppliers. Getting it may not be easy though, as Hilderhoff said steel mills will likely help existing customers first, rather than those that rely on imports and all of a sudden want U.S. supply.

Franco-Nevada swings to profit in Q4'17, meets higher end of FY'17 guidance

Franco-Nevada Corp. swung to a net profit of US$43.5 million in the fourth quarter of 2017, from a loss of US$4.5 million in the same period a year ago. The Toronto-based company's total revenue increased 7.7% year over year to US$167.2 million. For 2017, net income increased 59% to US$194.7 million, from US$122.2 million. Total revenue for the year ended Dec. 31, 2017, increased 10.6% to US$675.0 million as a result of a record 497,745 gold equivalent ounces sold in the 12-month period, reflecting a 7.2% increase and meeting the higher end of its guidance.

Higher commodity prices help push MMG into the black in FY'17

MMG Ltd. swung to a net profit of US$348.4 million in 2017 from a year-ago net loss of US$98.7 million. The company attributed the reversal to higher commodity prices, its focus on cash generation and the contribution from its Las Bambas copper mine in Peru. Meanwhile, the base metals miner is aiming to produce between 560,000 and 590,000 tonnes of copper and between 190,000 and 220,000 tonnes of zinc in 2018.

DIVERSIFIED

* Anglo American Plc unit Anglo American Capital plc has put up US$1.20 billion to purchase €1.67 billion of outstanding notes. The tender offer includes €750.0 million of 2.750% notes due June 7, 2019, €600.0 million of 1.50% notes due April 1, 2020, €600.0 million of 2.875% notes due Nov. 20, 2020, and €750.0 million of 2.50% notes due April 29, 2021.

BASE METALS

* PT Antam (Persero) Tbk. is targeting to produce and sell 26,000 tonnes of nickel contained in ferronickel in full year 2018, 19% higher than the 21,762 tonnes and 21,813 tonnes of nickel contained in ferronickel produced and sold, respectively, in full year 2017.

* Eurasian Resources Group Sàrl renewed efforts to sell its Frontier copper mine in the Democratic Republic of the Congo even as the asset's value has dropped to US$400 million, Reuters reported, citing two banking sources. One of the sources said the Kazakh miner is targeting exiting the DRC within two years.

* Jinchuan Group International Resources Co. Ltd. expects to book a consolidated profit attributable to owners of at least US$30 million for full-year 2017, an increase from approximately US$8 million in the previous year, partly as a result of an increase in the average selling price of cobalt and copper.

* S&P Global Market Intelligence estimates that in the final quarter of 2017, global production of nickel slipped slightly compared with the previous quarter. The company's estimate of 553,000 tonnes for the latest three-month period brings the annual total to almost 2.19 million tonnes, which is fractionally higher than the amount produced in 2016. Meanwhile, production of zinc increased to 3.20 million tonnes after the disappointing 3.13 Mt registered in the three months to end-September 2017. Although mined output in the December quarter was down 1.7% on the year-ago figure, it brought the annual total to 12.39 Mt of contained metal, up 1.2% from 2016.

* PT Timah Tbk.'s full-year 2017 profit doubled to 502 billion Indonesian rupiah, from 252 billion rupiah, with revenue rising 32% to 9.217 trillion rupiah, as the company's refined tin production increased 27% to 30.25 billion tons.

* The Indonesian government collected US$756 million in revenue from Freeport-McMoRan Inc. unit PT Freeport Indonesia in 2017, The Jakarta Post reported.

* Clean TeQ Holdings Ltd. will undertake an underwritten A$150 million share placement of up to approximately 130 million shares at A$1.15 each to institutional, accredited, sophisticated and professional investors to fund early works and long lead items to accelerate development at the Clean TeQ Sunrise nickel project in New South Wales, Australia.

* Bunker Hill Mining Corp. signed an agreement with the U.S. Environmental Protection Agency, or EPA, and Department of Justice to allow for its operation of the Bunker Hill zinc-lead-silver mine in Idaho without being liable for the mine's past contamination incidents.

* A preliminary economic assessment on Cardero Resource Corp.'s Zonia copper oxide deposit in Arizona defined a posttax net present value, discounted at 8%, of US$192 million, with a 29% internal rate of return and a 2.89-year payback period.

PRECIOUS METALS

* The price of gold will benefit no matter what President Donald Trump decides to do about tariffs on steel and aluminum, Jeffrey Christian, CPM managing partner, said on the sidelines of the Prospectors & Developers Association Conference in Toronto.

* The London Precious Metals Clearing Ltd., a consortium responsible for clearing transactions in London's gold market, is opening up to accepting new member banks, which may help the market become more competitive, The Australian Financial Review reported.

* The United Steelworkers union Local 5114 rejected a proposal to end the yearlong strike at Hecla Mining Co.'s Lucky Friday silver mine in Idaho.

* Westgold Resources Ltd. agreed to sell its South Kalgoorlie gold operations in Western Australia to Northern Star Resources Ltd. for A$80 million in cash and shares. The sale is in line with the Westgold's strategy to focus on its Murchison gold assets, which are also in Western Australia.

* Crater Gold Mining Ltd. resumed underground mining operations at the Crater Mountain gold project in Papua New Guinea after receiving approval from the country's Mineral Resources Authority.

BULK COMMODITIES

* The White House indicated the possibility that the U.S. could exclude certain countries from its planned tariffs on steel and aluminum imports, other than Canada and Mexico, Reuters reported. Trump is expected to sign a presidential proclamation establishing the tariffs March 8.

* Rio Tinto is expecting that its US$2 billion in annual aluminum sales from its Quebec and British Columbia smelters to the United States will be spared from the proposed tariffs, The Australian Financial Review reported.

* The Indonesian Trade Ministry plans to impose import duties on steel and aluminum products in response to planned tariffs by the U.S. government, Bisnis Indonesia reported.

* President Donald Trump may not have made his final decision on placing tariffs on imported steel and aluminum, Energy Secretary Rick Perry said, speaking at an industry conference where energy executives railed against the proposals.

* Exxaro Resources Ltd. booked headline earnings per share of 502 South African cents for full year 2017, down 61% from the previous year, and declared a final dividend of 400 cents per share, compared to 410 cents in 2016. Exxaro also expressed interest in acquiring the coal assets of Tegeta Resources, owned by the Gupta family, against other bidders, including former CEO Sipho Nkosi, Miningmx reported, citing CEO Mxolisi Ngojo during a conference call for its full-year 2017 results.

* PJSC Novolipetsk Steel's board recommended a dividend of 3.36 Russian rubles per share dividend in the fourth quarter of 2017, lower than its third quarter dividend of 5.13 rubles per share.

* Coal India Ltd. missed its production target for the 11th straight month, bringing its total from April 2017 through February 2018 to 495.1 million tonnes, which is 7% below the target of 531.3 million tonnes set by India's coal ministry, Business Standard reported.

* Jupiter Mines Ltd. is contemplating a A$200 million relisting bid on the ASX, as manganese prices have significantly improved since the company's delisting in 2013, The West Australian reported.

* U.S. Steel Corp. will restart the steelmaking facilities and one of two blast furnaces at its Granite City Works property in Illinois ahead of an anticipated surge in demand in the U.S. related to the government's plans to enforce tariffs on steel imports. The company expects to call about 500 employees back to the site starting this month, with the restart process expected to take up to four months.

* BSG Resources Ltd. entered into voluntary administration in a bid to guard itself as it faces legal action as part of the bribery probe over the Simandou iron ore project in Guinea, Reuters reported. The billionaire investor Beny Steinmetz-owned company is also suing financier George Soros for damages of US$10 billion over lost contracts.

* Universal Coal Plc agreed to acquire the North Block Complex, an open cast coal operation in South Africa, from Exxaro Resources Ltd. for 170 million South African rand.

* Coal's share of China's primary energy mix will be slashed to 59% in 2018, and will be further reduced to just half by 2020 as part of the country's efforts to transition to cleaner energy sources, Reuters reported, citing China's National Energy Administration. Coal production this year is expected to reach an all-time high, at 3.7 billion tonnes, an increase of 7.3% year over year.

* Tata Steel Ltd. said it was the winning bidder for a controlling stake in insolvent Indian steelmaker Bhushan Steel Ltd., beating rival JSW Steel Ltd. Reuters reported that Bhushan's creditors claimed they were owed 559.89 billion Indian rupees.

* Mining contractor NRW Holdings Ltd is leading the race to secure the mining contract for the restart of Baralaba Coal Co. Ltd.'s Baralaba North thermal coal project in Queensland, Australia, The West Australian reported.

* China's Shanxi Province looks to slash 16 million tonnes of backward mining capacity in state-owned coal mines in 2018, Xinhua Net reported.

SPECIALTY

* Ucore Rare Metals Inc. is forming a joint venture with Kentucky River Properties LLC to process rare earth elements and strategic metals from the Appalachian coal region in the U.S.

* Image Resources NL intends to raise A$50 million by issuing senior secured loan notes to advance the Boonanarring mineral sands project in Western Australia.

INDUSTRY NEWS

* Anglo American Plc CEO Mark Cutifani said South Africa's future is looking "a lot more positive" following the election of Cyril Ramaphosa as president, Reuters reported. "We've continued to invest in South Africa, we believe in the future of South Africa and from our point of view it just got a lot more positive," Cutifani said.

* Democratic Republic of the Congo President Joseph Kabila is expected to sign a widely criticized new mining code into law, Reuters reported, citing the government and mining companies. The announcement follows discussions between the mining firms and Kabila, as confirmed by Randgold Resources Ltd., which said that discussions with the government over the issues in the current agreement will continue.

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.