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Global zinc inventories to reach 'critically low levels' in 2017

TOP NEWS

Global zinc inventories to reach 'critically low levels' in 2017

A continued tightening in the zinc concentrate market is set to deplete global inventories further this year and push the price of the base metal up to levels not seen since 2007. Jonathan Leng, Wood Mackenzie principal analyst for zinc markets, said in an interview with S&P Global Market Intelligence that the refined market for zinc has been in deficit for the past five years, with the shortfall expected to continue this year before the market returns to balance in 2018.

Barrick contains leakage at Veladero gold mine in Argentina

A pipe carrying gold and silver solution ruptured at Barrick Gold Corp.'s Veladero gold mine in Argentina. The company said the leakage was contained and does not pose any threat to the environment. News agency Télam reported that a team of inspectors from Argentina's environment ministry will examine the site, which reported its third leakage in less than a year.

EU hints at Ukraine-style deal for Brexiting UK

Now that the U.K. has filed for divorce, the EU is keen to ensure that its former partner continues to pay its share of the bills. But European parliamentarians have also left the door open to a looser-binding future agreement along the lines of the deal with Ukraine, which could allow a high degree of continued access to the single market.

BASE METALS

* Chilean copper commission Cochilco does not expect national copper production to reach the initially expected 5.6 million tonnes this year, mainly due to the recent strike at BHP Billiton Group's Escondida mine, Cochilco executive vice president Sergio Hernández told Bloomberg. Cochilco expects the stoppage to result in a loss of production of between 220,000 and 230,000 tonnes, Hernández said.

* Vedanta Resources Plc agreed to extend the executive service agreement of CEO Tom Albanese until Aug 31. The company's executive chairman, Anil Agarwal, is leading the succession process to identify the successor to Albanese, whose three-year contract was due to expire on March 31.

* Vale SA unit PT Vale Indonesia Tbk. is planning to construct a previously reported US$2 billion ferronickel smelter in Pomalaa, Southeast Sulawesi, The Jakarta Post reported, citing the company's president director, Nico Kanter.

* Jiangxi Copper Co. Ltd. posted a profit attributable to shareholders of 840.8 million Chinese yuan, or 24 fen per share, in 2016, up from the year-ago profit of 689.6 million yuan, or 20 fen per share. The company's revenue totaled 201.73 billion yuan in the year, up from 185.23 billion yuan in 2015, on the back of increased sales.

* Mitsubishi Materials Corp. expects to incur a ¥23.9 billion extraordinary loss, related to a provision for environmental measures, in the fourth quarter of its fiscal year ending March 31. The company is carrying out work at its abandoned and suspended mines to prevent mining-induced pollution.

* Trevali Mining Corp. raised C$264.5 million through a previously reported bought-deal private placement of subscription receipts, including the full exercise of an overallotment option by the underwriters. Net proceeds are earmarked to help fund a portion of the cash consideration of the US$400 million deal with Glencore Plc.

* Cobalt Power Group Inc. signed an option agreement to acquire the Bende and Kingston patented cobalt mining claims, covering 89 hectares in Ontario.

PRECIOUS METALS

* Alexco Resource Corp.'s preliminary economic assessment for the Keno Hill silver project in Canada's Yukon estimated a post-tax net present value, at a 5% discount rate, of C$79.4 million and an internal rate of return of 75%. Total payable production from the mine is estimated at about 25.1 million ounces of silver, 77.3 million pounds of zinc, 67 million pounds of lead, and 4,870 ounces of gold over the eight-year mine life.

* Dragon Mining Ltd. reached an agreement with Agnico Eagle Mines Ltd. to transfer its ownership of the Hanhimaa gold project to the latter for a 2% net smelter royalty on future mineral production.

* Evolution Mining Ltd. said operations at its Mount Carlton gold mine in north Queensland resumed after Tropical Cyclone Debbie passed to the south of the mine. The company reported no significant damage to the mine's infrastructure, though access is expected to be restricted for a brief period.

* Aurvista Gold Corp. exercised an option to acquire the remaining 10% interest in the Douay West zone in Quebec from Société d'Exploration Minière Vior Inc. for C$12,500.

* The World Bank's International Centre for Settlement of Investment Disputes ordered OceanaGold Corp. to pay interest on US$8 million in legal costs awarded to El Salvador in October 2016, after the miner's unit lost a lawsuit against the country, Agence France-Presse wrote.

* Luna Gold Corp. secured approval from the Supreme Court of British Columbia to merge with JDL Gold Corp. to create a multiasset mining company named Trek Mining Inc. As all required conditions for the transaction were fulfilled, the deal is now expected to close March 31.

* Petropavlovsk PLC increased the amount of gold in its hedging program to 573,000 ounces at US$1,254 per ounce. A US$100 million gold loan facility was also approved, with final documentation scheduled for April.

* Jubilee Platinum Plc shares rose by more than 9% in afternoon trading in London on March 29, after the company announced that platinum concentrate production has begun at its Hernic tailings project in South Africa.

* Orvana Minerals Corp. made the first commercial shipment of gold-silver doré after recently recommissioning the carbon-in-leach circuit at its Don Mario mine in Bolivia.

BULK COMMODITIES

* Kibo Mining Plc decided to implement a diversified production strategy for the Mbeya coal mine in Tanzania. The Mbeya power plant will be the coal mine's primary client, with the domestic coal market as a secondary client.

* Ohio representative Marcy Kaptur, in an interview with CNBC, said the real danger to the steel industry was the vast oversupply in the market caused by unfair trade practices, and not the rise of automation.

* The three-month aluminum price on the London Metal Exchange climbed to its strongest since May 2015 at US$1,960 per tonne, supported by optimism that China would carry out plans to cut supply and an oil price rebound, The Sydney Morning Herald reported.

* Backed by South African Chamber of Mines President Mike Teke, Masimong Minerals (Pty) Ltd. is said to have emerged as the lead bidder during the auction of some of Anglo American Plc's South African coal mines, Bloomberg News reported, citing "two people familiar with the matter."

* Teck Resources Ltd. has not agreed to the contract price for steelmaking coal for the second quarter of 2017, as the market awaits the outcome of the cyclone event in Australia, but expects sales to be at least 6.8 million tonnes and site costs in the range of C$47 to C$51 per tonne.

* Moody's said the completion of the sale of Vale's interest in the Moatize coal mine and in the Nacala Logistics Corridor to Mitsui & Co. Ltd., resulting in US$733 million in proceeds to the mining major, improved its liquidity and is credit positive.

* Brazilian steelmaker Gerdau SA entered an agreement to form a joint venture with Putney Capital Management in Colombia. The company will sell 50% of its stake in the Gerdau Diaco mill to Putney Capital.

* The Indonesian government's plans to boost domestic coal consumption and curb production of the commodity will weigh on exports from the country, which is the largest coal exporter in the world, according to Hendra Sinadia, deputy executive director of the Indonesian Coal Mining Association.

* The Competition Commission of India said the proposed merger between Canadian fertilizer producers Agrium Inc. and Potash Corp. of Saskatchewan Inc. will likely have an adverse effect on competition, Reuters reported, citing a government statement.

SPECIALTY

* Petra Diamonds Ltd. intends to offer US$600 million in aggregate principal amount of senior secured second lien notes due 2022 to refinance the company's existing US$300 million 8.25% senior notes due 2020.

* Metals Australia Ltd. entered an agreement to acquire the Lac Rainy Est graphite project, representing 39 mineral claims across an area of 2,040 hectares in Quebec, Canada.

* Centurion Minerals Ltd. executed a letter of intent with a private concession owner to acquire up to an 85% interest in two lithium brine salar projects, with areas of about 3,000 hectares each, located in Catamarca, Argentina.

* A definitive feasibility study for the first stage of Lithium Americas Corp.'s Cauchari-Olaroz lithium project in Argentina estimated construction CapEx of US$425 million, with payback in three years and five months.

* Orocobre Ltd. entered into a deal to off-load its Salinas Grandes lithium exploration properties in Argentina's Salta and Jujuy provinces to LSC Lithium Ltd.

* Lithium Australia NL has freed its off-market takeover offer for Lepidico Ltd. from the defeating conditions. The offer is expected to close April 18.

INDUSTRY NEWS

* Both the U.S. and China are showing restraint to avoid ending up in a full-blown trade war, Citi Research chief economist Paul Brennan said at the Global Iron Ore and Steel Forecast conference in Perth, Australia.

* Indonesia may be heading toward an oversupply of processing capacity, according to Norman Bissett, a foreign legal consultant with Indonesia-based Hadiputranto Hadinoto & Partners.

* More change is on the horizon for global mining companies, a market that has seen its share of flux and volatility in recent years, outgoing Anglo American Chairman John Parker said. He added that the industry has been somewhat slow to embrace digitization and automation to boost productivity and improve operations, but it will have to, and soon.

* The president of the Federal Reserve Bank of San Francisco said he "would not rule out" the prospect of more than three rate increases in 2017.

* Following a recent ban by the Tanzanian government on exports of gold and copper concentrates, President John Magufuli called for a special audit of mining companies to verify if they pay their fair share of taxes, Reuters reported.

* El Salvador's Congress passed a law prohibiting all metal mining projects, including open pit and underground, in a bid to protect the country's environment and natural resources, Reuters reported.

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.