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Glencore FY'16 production in line with guidance

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Glencore FY'16 production in line with guidance

TOP NEWS

Glencore FY'16 production in line with guidance

Glencore Plc's full-year 2016 production was in line with guidance, reflecting production suspensions in copper, zinc and coal, with solid fourth-quarter 2016 production across the board. For the full year, own-sourced copper production decreased 5% to 1.4 million tonnes, own-sourced zinc production fell 24% to 1.1 million tonnes and coal production dropped 5% to 124.9 million tonnes compared to 2015. Own-sourced nickel production jumped 20% year over year to 115,100 tonnes.

Severstal FY'16 net profit surges 188.3% YOY

PAO Severstal's net profit for 2016 surged 188.3% year over year to US$1.62 billion, despite a 7.5% drop in revenue to US$5.92 billion. The net profit increase was mainly the result of a foreign exchange gain of US$483 million in the year, compared to a US$624 million loss a year ago.

Grupo Mexico swings to profit in Q4'16 on higher revenue

Grupo México SAB de CV posted a net profit of US$95.9 million for the fourth quarter of 2016, swinging from a year-ago loss of US$17.1 million, Reuters reported. Revenue for the miner increased 3.5% year over year to US$2.1 billion in the three months.

BASE METALS

* Labor contracts with fewer benefits for new employees is the latest issue causing conflict between BHP Billiton Group's Escondida mine in Chile and its union, which voted to stage a strike at the world's largest copper mine, daily La Tercera reported.

* Meanwhile, copper prices at the London Metal Exchange increased to over US$6,000 per tonne following the announcement of the voting results for the strike at Escondida, Bloomberg News reported. "The strength of the vote closes the door to any attempt by the company to introduce its disastrous plans to lower costs through making the workforce cheaper," the union said.

* Panoramic Resources Ltd.'s feasibility study at its Savannah nickel-copper-cobalt project in Western Australia estimated that the mining of Savannah North will extend the mine life to 10.25 years. Annual metal-in-concentrate production is expected at 9,700 tonnes of nickel, 5,000 tonnes of copper and 670 tonnes of cobalt for total life-of-mine production of 99,200 tonnes of nickel, 51,500 tonnes of copper and 6,900 tonnes of cobalt.

* Cobalt Blue Holdings Ltd. reached an intraday high of 28 Australian cents, 40% more than its IPO price, on its first day on the ASX. The Australian explorer lit up the boards Feb. 2, with investors trading about 11.2 million shares during the session.

* Peruvian environmental authority OEFA ordered Aruntani SAC to suspend the acid drainage waters deposit system at its operations in the Puno region because it did not comply with regulation. The company has 10 weekdays to submit a new water treatment and remediation plan, daily Diario Correo reported.

* Operations have been suspended at Mitsubishi Materials Corp.'s majority-owned Gresik copper smelter in Indonesia since Jan. 19 amid a worker strike, Metal Bulletin reported, citing a company executive.

* Glencore Plc unit Katanga Mining Ltd. reported that waste mined in 2016 totaled about 8.1 million tonnes, representing a 79.7% drop on a yearly basis, due to a revised mining plan following the suspension of copper and cobalt processing at the end of the third quarter of 2015. Ore mined came in at 825 tonnes at KOV and is related to incidental ore mined during waste mining.

PRECIOUS METALS

* Royal Gold Inc. booked net income of US$28.1 million in the second quarter of its fiscal 2017, increasing from US$15.1 million reported in the year-ago period. The improvement was driven by a 9% year-over-year increase in revenue, which came in at US$107.0 million. The company also reported record operating cash flow of US$69.7 million during the period, representing a 34% increase on a yearly basis.

* The government of Mali has agreed to pay Hummingbird Resources Plc about US$11 million for an additional 10% stake in the Yanfolila gold project.

* StratMin Global Resources Plc executed a binding heads of agreement with Signature Gold Ltd. to acquire all of the latter's issued share capital. StratMin will issue up to £9.5 million worth of equity, to be allocated pro rata to Signature shareholders.

* OceanaGold Corp. said the suspension of its Didipio gold project in the Philippines, proposed by Department of Environment and Natural Resources secretary Gina Lopez, was illegal. "The Didipio operation is not in violation of any laws, rules or regulations, and the operation is not posing any threat to public, security, health, safety or otherwise," the company said.

* Anglo American Platinum Ltd. launched a chrome recovery plant at its Amandelbult operation in South Africa to produce commercial-grade chromite concentrate.

* Luna Gold Corp. and JDL Gold Corp. have agreed to merge and establish a multiasset mining company to be called Trek Mining Inc., which will be well funded and strongly positioned to advance the Aurizona gold project in Brazil to production. Under the terms, Luna Gold shareholders will receive 1.105 JDL shares for each share held.

* SEMAFO Inc. reported full-year 2016 production of 240,200 ounces at an all-in sustaining cost of US$720 per ounce at its Mana gold mine in Burkina Faso. Gold sales for the year totaled 240,600 ounces of gold, resulting in annual revenues of US$300 million.

* Major shareholders of Banro Corp. agreed to support the company's recapitalization plan, which will see it refinance US$207.5 million of outstanding debt, equitize outstanding preferred shares and raise US$45 million through a forward gold sale.

* Harmony Gold Mining Co. Ltd. suspended all scraper-related operations at its Masimong mine in Free State, South Africa, after an employee was killed in an accident.

* Orca Gold Inc. struck a deal to acquire Kinross Gold Corp.'s two wholly owned exploration companies, which collectively own the Morondo and Korokaha North exploration licenses, along with five exploration license applications covering 2,268 square kilometers in Ivory Coast.

* Nickel One Resources Inc. signed a definitive agreement with Finore Mining Inc. to fully acquire the Lantinen Koillismaa platinum group elements-copper-nickel project in Finland.

* PJSC Polyus controlling shareholder Polyus Gold International Ltd. priced its US$800 million 5.250% notes due Feb. 7, 2023. The closing and settlement of the notes is expected Feb. 7.

* Employees who had staged a sit-in at Randgold Resources Ltd.'s Tongon gold mine in Ivory Coast returned to work Feb. 1, after management and local and central authorities negotiated a settlement.

BULK COMMODITIES

* PAO Severstal's board recommended a dividend of 27.73 Russian rubles per share for 2016, up from 20.27 rubles per share proposed a year earlier.

* Meanwhile, Severstal plans to invest about 43 billion Russian rubles across its operations this year, primarily focusing on increasing production of high-value-added products, enhancing safety and customer care, and cost control.

* Although the U.S. is on the attack against China over subsidies provided to some of its aluminum producers, the Asian powerhouse has far greater worries than the penalties it faces from the World Trade Organization case. China is more focused on the government's move to reduce pollution and shut down up to 30% of aluminum capacity in Henan, Shandong and Shanxi.

* Russian fertilizer group PJSC PhosAgro's overall fertilizer production in 2016 increased 9.4% year over year to 7.4 million tonnes, after a 13.4% jump in output in the 2016 fourth quarter to 2.0 million tonnes.

* Beowulf Mining Plc shares crashed after the County Administrative Board for the County of Norrbotten referred the company's exploitation concession application for the Kallak iron ore project back to the Mining Inspectorate of Sweden. The company lodged a revised exploitation concession application with the Inspectorate in 2016, which was sent to the county board to respond to the Inspectorate's questions until Feb. 28.

SPECIALTY

* Cameco Corp. expects to lose about C$1.3 billion in revenues through 2028 after Tokyo Electric Power Co. Holdings Inc., or TEPCO, served a termination notice for a uranium supply contract. TEPCO alleged that force majeure has occurred, as it was unable to operate its nuclear generating plants for 18 consecutive months due to government regulations arising from the Fukushima nuclear accident in March 2011.

* Uranium One Inc., a subsidiary of Russian nuclear giant Rosatom, won the contract to supply uranium concentrate to Brazilian state-owned nuclear company Industrias Nucleares Do Brasil. The contract was disclosed in the Brazilian Official Gazette on Feb. 1, daily Valor Econômico reported.

* Core Exploration Ltd. has been granted two exploration licenses that expand the granted tenure by 250% at the company's wholly owned Finniss lithium project in Australia's Northern Territory.

* Australia's AVZ Minerals Ltd. has agreed to a US$6 million deal to acquire a 60% interest in the Manono lithium-tin-tantalum mine in the Democratic Republic of the Congo.

* Supreme Metals Corp. entered into two separate agreements: An exclusive option from Anstag Mining Inc. to acquire a 100% undivided interest in and to the 1,600-acre Silver Shadow property located in the northwest part of the Clayton Valley, and a 100% undivided interest in the 1,920-acre Columbus property in Esmerelda County, from Doctors Investment Group Inc., both of which are lithium-prospective properties in Nevada.

INDUSTRY NEWS

* India is planning to use drones to track illegal miners in a move to curb unsanctioned diggers, Bloomberg reported. According to the technical secretary at Indian Bureau of Mines in Nagpur, Piyush Sharma, the illegal miners usually manage to run away before the authorities can catch them. "Drones will be effective in a way that we will have pictures, which can be used as evidence," Sharma said.

* Dean Cunningham, CEO of Omani gypsum exporter Kunooz Oman Holding, said he expects Oman to issue a new mining law this June, Muscat Daily reported. The new law would permit companies to mine for a longer period and ease the process to secure a license.

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.