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Rusal's net profit slides to US$440M in Q4'17

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Rusal's net profit slides to US$440M in Q4'17

TOP NEWS

Rusal's Q4'17 net profit slides 31.8% YOY to US$440M; Deripaska to step down as President

United Co. Rusal Plc's fourth-quarter 2017 profit slid 31.8% year over year to US$440 million from US$645 million in 2016 when it recorded a US$299 million gain from the sale of its Alpart alumina refinery in Jamaica to China's Jiuquan Iron and Steel (Group) Co. Ltd., even as revenue increased 35.4% on a yearly basis to US$2.75 billion. Rusal added that Oleg Deripaska will be stepping down as president effective March 15. CEO Vladislav Solovyev will move to the president position, while the CEO role will be taken by current CFO Alexandra Bouriko, who will become the first woman to lead one of Russia's largest mining companies.

Trump to take 'thoughtful, systematic' approach to potential metals tariffs as deadline nears

U.S. Commerce Secretary Wilbur Ross said President Donald Trump will take a "very thoughtful and systematic" approach to making a decision on potential tariffs on steel and aluminum imports, adding that Trump will not rush the directive. According to Bloomberg News, Trump has to make a decision on the recommendations for steel imports by April 11 and on aluminum by April 19. The U.S. Department of Defense agreed with the U.S. Department of Commerce's assessment that foreign imports of the two metals were a threat to national security, CNBC reported.

Oyu Tolgoi mulls power supply options amid uncertainties over planned Tavan Tolgoi plant

Management of the Oyu Tolgoi copper mine in Mongolia will weigh power supply options for the mine, including building its own power plant, to ensure its electricity supply in the coming years after news that the proposed power plant at the neighboring Tavan Tolgoi coal mine is unlikely to be completed in time, Reuters said in a news brief. Majority owner Rio Tinto, however, noted that a power plant will not be covered by the approved US$5.3 billion investment for Oyu Tolgoi's expansion.

DIVERSIFIED

* Anglo American Plc CEO Mark Cutifani agreed to stay with the company he joined in April 2013, Miningmx reported, citing an interview with Cutifani. "I always said I would review my position after five to seven years, but the board agreed that I should keep on going. We've not put an end-date on it yet," he said. The comments came after Anglo American posted a 99% surge in net profit attributable to shareholders for 2017 and a 47% drop in net debt.

* Rio Tinto plans to move some of its London-based support staff as it forms three global hubs as well as a commercial and marketing hub in Singapore, Reuters reported. The company has started consultations with the workers, as some roles are expected to be moved to one of the three hubs. The miner, however, said it was not changing its operating model.

* Kazakh miner Eurasian Resources Group Sàrl is working with VTB Capital and Rothschild on a plan to spin off and list some of its assets to partially repay its debt, Reuters reported, citing sources. "The company needs to raise cash and is looking to spin off some of its assets, most likely the ferrochrome and power ones, and list them," one source said. The company is also said to be looking to tap Chinese or Japanese shareholders to invest in up to a 20% stake in the assets, another source said.

BASE METALS

* A group of concerned citizens in the town of Brooke's Point in Palawan, Philippines, led by mayor Jean Feliciano, demolished the facilities of the Ipilan nickel project, saying it does not have valid permits, Rappler reported.

PRECIOUS METALS

* Centerra Gold Inc. produced 785,316 ounces of gold in 2017, rising from 598,677 ounces for 2016 and meeting the company's guidance for the year. In 2018, the miner targets output of between 645,000 and 715,000 ounces of gold.

* Teranga Gold Corp. posted record gold production of 233,267 ounces in 2017 and booked a 38% rise in the year's attributable full-year net profit to US$31.9 million.

* Great Panther Silver Ltd. aims to produce 4 million to 4.1 million silver equivalent ounces in 2018 at all-in sustaining cash costs of US$12.50/oz to US$14.50/oz.

* Barrick Gold Corp. outlined a potential increase of 1 million ounces in its average annual gold production starting in 2021. Annual gold output between 2019 and 2022 is estimated at 4.2 million to 4.6 million ounces, with all-in sustaining costs of between US$750/oz and US$875/oz. The miner approved three feasibility-level projects at its Turquoise Ridge, Cortez Deep South and Goldrush mines in Nevada, while optimization on a fourth project to extend the life of the Lagunas Norte mine in Peru remains underway.

* Barrick Gold executives said the company will not make acquisitions just to sate growth calls. Chairman John Thornton said the miner considered several deals over the past year that offered growth but passed on them all, Reuters reported.

* Sibanye Gold Ltd. CEO Neal Froneman warned Lonmin Plc that failing to deliver on the restructuring plans would see the withdrawal of Sibanye's all-share offer for the platinum miner, Miningmx reported.

* Venezuelan President Nicolas Maduro said the country plans to launch a cryptocurrency backed by precious metals called "petro gold," Reuters reported.

* GoldMining Inc.'s BRI Mineração Ltda. subsidiary agreed to acquire 66.66% of the existing 4% net production royalty at the Cachoeira gold project in Brazil.

* Orion Metals Ltd. entered into an agreement with PVW Resources NL, allowing the latter to earn up to a 90% interest in the seven gold and rare earth elements exploration tenements in the Tanami West project area in Western Australia by sole-funding and carrying out exploration activity over the tenements.

* Goldplat Plc signed a final settlement agreement with Rand Refinery Pty. Ltd., ending a dispute between the two companies over a silver sulfide processing agreement. Goldplat did not disclose the settlement amount payable by Rand Refinery.

* Focus Minerals Ltd. estimated a maiden resource estimate for its Karridale deposit, part of the Laverton gold project in Western Australia, of 12.7 million tonnes at 1.3 g/t of gold for 538,000 contained gold ounces.

* B2Gold Corp. posted an initial resource estimate for the Toega deposit at its Kiaka gold project in Burkina Faso. At a cutoff of 0.6 g/t of gold, the deposit hosts inferred resources containing 1.13 million ounces of gold within 17.5 million tonnes of ore grading 2.01 g/t, indicating open pit potential.

BULK COMMODITIES

* A global aluminum producer offered Japanese buyers a premium of US$135 per tonne for shipments during the June quarter, raising premiums for the metal 31% on a quarterly basis, sources involved in the pricing talks told Reuters. The newswire said the premium would be the highest in three years if approved.

* According to The Guardian, India's customs department renewed allegations of a US$600 million tax fraud by Adani Enterprises Ltd. parent Adani Group and is now challenging a ruling that cleared the company of wrongdoing in 2017.

* En+ Group plc said Oleg Deripaska resigned as president and was redesignated as a nonexecutive director, effective March 15. Vladislav Solovyev was named CEO and redesignated as executive director following his appointment as Rusal's president. Maxim Sokov was named group president.

* Bangkok-based coal miner Banpu PCL posted a 55.4% year-over-year increase in net profit for the fourth quarter of 2017 to US$66.2 million. The profit included a foreign exchange loss of US$21.4 million due to the strengthening of the Thai baht, compared to forex gains of US$7.8 million a year ago. Sales revenue jumped to US$891.3 million, from US$652.0 million in the fourth quarter of 2016, on the back of higher coal sales volumes and prices.

* South Africa's power producer, Eskom, said the Optimum coal mine started business rescue proceedings, without detailing what the proceedings entailed, Reuters reported. The Gupta family-owned mine supplies coal to one of the utility's power stations.

* Meanwhile, South Africa's National Union of Mineworkers said its members who work at the Optimum coal mine were not paid on time and will not return to work, Reuters reported. The NUM members will remain on strike until their wages are paid and they get more information on the mine's future.

* Afarak Group Plc's fourth-quarter 2017 profit improved to €3.5 million, from €2 million a year ago, leading the company to return to a full-year profit of €6.7 million compared to a €900,000 loss in 2016. Higher production, sales volumes and prices helped drive the company's 2017 revenue to €198.8 million from €153.6 million in 2016.

* U.S. Senator Sheldon Whitehouse of Rhode Island sent a letter to the assistant secretary for mine safety and health, David Zatezalo, asking the latter to clarify his relationship with Murray Energy Corp. CEO Robert Murray, who is allegedly lobbying to relax the enforcement of a mine dust safety rule in coal mines that was meant to curb black lung disease cases in miners, CNN reported.

* Champion Iron Ltd. subsidiary Québec Iron Ore Inc. restarted operations at the Bloom Lake iron ore mine in Quebec on Feb. 16, ahead of schedule and within budget.

SPECIALTY

* The Indian government is considering whether to encourage state-owned mining and mineral processing companies to set up joint ventures to acquire strategic mineral assets overseas, Mining Weekly reported, citing senior government officials. These strategic metals include rare earths and battery minerals, such as lithium.

* Risks abound for technology metals investors being kept in the dark about pricing while some exploration executives are deluding themselves about graphite grade and flake size, market players said. Mike Rosenstreich, managing director of emerging specialty metals junior Hexagon Resources Ltd., said many people do not understand the immature, fragmented, segmented and "very opaque" nature of the graphite market. BDO corporate finance partner Adam Myers told S&P Global Market Intelligence that the pricing structure of technology metals was private, as they are traded under contracts, so "what you see in the public domain versus how the companies negotiate is very hard to get a handle on."

* Orocobre Ltd.'s posttax net profit slightly rose to US$8.2 million in the first half of fiscal 2018, from US$7.4 million a year ago, reflecting its US$13.1 million profit from the Salar de Olaroz joint venture with Toyota Tsusho Corp. and a US$1.9 million impairment at Borax Argentina.

* Graphite One Resources Inc. said the Alaskan Senate took up a bill that would allow the Alaska Industrial Development Export Authority to issue bonds to finance infrastructure and construction costs of the company's Graphite Creek project in the state.

* PAO NOVATEK completed the purchase of PJSC Alrosa's gas assets, including JSC Geotransgaz and Urengoy Gas Co. LLC. Novatek recently won the auction for the assets with a bid of 30.3 billion Russian rubles, Vedomosti reported.

* PepinNini Lithium Ltd. secured an option from LSC Lithium Corp. unit LitheA Inc. to acquire the Mina Patilla lithium project in Argentina's Salar de Pular.

INDUSTRY NEWS

* According to a survey by Canada's Fraser Institute, Finland outranked Saskatchewan as the top jurisdiction for mining investment, Mining Weekly reported. Several Australian mining territories' rankings fell in the survey, with Association of Mining and Exploration Companies CEO Warren Pearce attributing the drop to increased red tape in Australia coupled with regulatory uncertainty and possible royalty hikes.

* A looming overhaul of Canada's environmental permitting regime has stoked fears of delays and a slump in investment in the natural resource sectors, while some in the industry expect that companies will adapt to the proposed legislation without major consequences. The country plans to reshape the federal permitting process for major natural resource projects through a new bill that was first outlined Feb. 8.

* The success of China's environmental drive has surprised analysts who predicted it would take longer to flow through to commodity prices, but the broader economic climate remains "highly volatile" as China has clamped down on the housing market, according to ANZ senior commodities strategist Daniel Hynes. Hynes told attendees at the RIU Explorers Conference in Fremantle, Western Australia, this week that China's big environmental push has been "the biggest issue" that has changed to impact commodity markets over the past year.

* The business-friendly stance of new South African President Cyril Ramaphosa affected business for miners selling commodities in U.S. dollars and paying local costs in South African rand, as the local currency rose 6% over the dollar in 2018, the Financial Times 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.