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Glencore's FY'17 dividend soars after profit surges to US$5.78B

TOP NEWS

Glencore FY'17 net income surges 319% to US$5.78B

Glencore Plc's net income attributable to shareholders for 2017 surged 319% to US$5.78 billion from $1.38 billion in 2016, leading to a cash distribution of 20 cents per share, totaling about US$2.9 billion. Earnings improved thanks to higher commodity prices combined with strong unit cost performance. Revenue in the year swelled to US$205.48 billion, from US$152.95 billion a year ago, while CapEx increased to US$4.23 billion from US$3.50 billion. During its earnings call, CEO Ivan Glasenberg said the company would consider M&A opportunities, as Glencore has headroom to grow when it makes economic sense.

Fortescue Metals' fiscal H1'18 net profit slumps 44% YOY to US$681M

Fortescue Metals Group Ltd.'s net profit and revenue in the first half of its fiscal 2018 slumped 44% and 18% on a yearly basis, respectively, to US$681 million and US$3.68 billion. The group declared an interim fully franked dividend of 11 Australian cents per share. Fortescue, meanwhile, secured a US$1.4 billion term loan facility to redeem a portion of the company's senior secured notes maturing 2022 through a tender and/or redemption, lowering annual borrowing costs by about US$80 million.

DRC president yet to sign mining code into law despite nearing deadline

Joseph Kabila, president of the Democratic Republic of the Congo, has not yet signed the country's proposed mining code into law, despite its looming deadline, Reuters reported, citing a senior aide. The president has 15 days to sign the new code from the time parliament passed on the bill to him or return the bill to parliament for further deliberation. According to the country's laws, the bill automatically becomes law if Kabila takes no action.

DIVERSIFIED

* Responding to a question about whether BHP Billiton Group would consider "out of cycle" shareholder returns after the sale of shale assets, CEO Andrew Mackenzie said any decisions regarding the use of sale proceeds would be influenced by the status commodity markets and the company's priorities at the time, The Australian Financial Review reported. According to Bloomberg News, Royal Dutch Shell Plc could be interested in BHP's oil assets in the Permian basin of the U.S. as Shell looks at "opportunities to bulk up" its shale position.

* Trilogy Metals Inc.'s pre-feasibility study for its Arctic copper-zinc-lead-silver-gold project in Alaska estimated an after-tax net present value, discounted at 8%, of US$1.41 billion and a 33.4% internal rate of return, with a two-year payback period. Average annual payable production is expected to be more than 159 million pounds of copper, 199 million pounds of zinc, 33 million pounds of lead, 30,600 ounces of gold and 3.3 million ounces of silver over a 12-year mine life.

BASE METALS

* Apple Inc. is seeking contracts to directly buy long-term supplies of cobalt from miners for the first time, Bloomberg News reported, citing sources familiar with the matter. The company is said to be in talks to secure several thousand tonnes of cobalt per year from miners for five years or longer, in a bid to ensure sufficient supplies for manufacturing lithium-ion batteries used in its iPhone and iPad devices.

* Grupo México SAB de CV-owned Southern Copper Corp. won a tender to develop the Michiquillay copper mine in Peru, Reuters reported. Southern Copper's proposal included transferring US$400 million to the government and paying 3% in royalties, beating Cía. Minera Milpo SAA's offer of US$250 million in transfers and 1.875% in royalties.

* First Quantum Minerals Ltd. increased the offering amount of its senior notes due 2024 and 2026 to US$1.85 billion from US$1.50 billion previously. The offering will include US$850 million of senior notes due 2024, which will accrue interest at 6.500% per annum, and US$1.00 billion of senior notes due 2026, which will accrue interest at 6.875% per annum.

* Tahoe Resources Inc.'s preliminary economic assessment for its La Arena II copper-gold porphyry project in Peru pegged an after-tax net present value of US$824 million, discounted at 8%, a 14.7% after-tax internal rate of return and a 4.6-year payback. Average annual production during the 21-year mine life is estimated at 149,000 ounces of gold and 207 million pounds of copper, plus an additional 226,000 ounces of gold and 115 million pounds of copper recovered over a two-year preproduction period.

* Alexander Mining Plc partnered with Turkey-based Proses Mühendislik, Danismanlik, Insaat ve Tasarim AS to investigate the commercial use of the company's proprietary base metals leaching technology in the Middle East.

PRECIOUS METALS

* Randgold Resources Ltd. CEO Mark Bristow told Reuters that the company is targeting its first acquisition outside of its home continent, looking at assets in the Americas with US$900 million of "ammunition" for potential deals.

* Sibanye Gold Ltd. flagged a 2017 attributable loss of 4.44 billion South African rand, swinging from a 2016 profit of 3.47 billion rand, mainly due to heavy losses booked in the first half of 2017 amid factors including impairment losses, provisions for healthcare claims and restructuring costs.

* China Hanking Holdings Ltd. tabled a A$37.5 million takeover bid for Primary Gold Ltd.

* Kirkland Lake Gold Ltd. booked record quarterly gold output of 166,579 ounces in the fourth quarter of 2017, 56% more than production a year ago. The miner booked net earnings of US$41 million, surging from US$3.1 million in the same period of 2016. Full-year gold output totaled 596,405 ounces, which was 90% higher on a yearly basis.

* Pan American Silver Corp.'s hiked its quarterly cash dividend by 40% to 3.5 U.S. cents per share after net earnings in the fourth quarter of 2017 more than doubled year over year. The company posted quarterly net earnings of US$49.7 million, which included a US$60.2 million reversal of the 2015 impairment on the Morococha mine in Peru, compared to net earnings of US$22.3 million a year ago.

* New Gold Inc.'s net loss in the fourth quarter of 2017 widened to US$195.6 million from a year-ago net loss of US$22.3 million, despite revenues climbing to US$193.5 million from US$140.7 million. The deeper loss included an after-tax impairment charge of US$181 million on its Rainy River mine in Ontario and a noncash pretax loss of US$17 million on the revaluation of a gold stream obligation.

* Hochschild Mining Plc's profit from continuing operations attributable to shareholders for full year 2017 declined to US$41.6 million from US$45.6 million a year ago. The company proposed a final dividend of 1.965 cents per share, up 42% from the 2016 final dividend.

* Antioquia Gold Inc.'s preliminary economic assessment for the Cisneros gold project in Colombia pegged a posttax net present value of US$16.8 million, discounted at 5%, an 18.7% internal rate of return and a 3.2-year payback period. The company expects to recover 150,900 ounces of gold during the five-year mine life. The total preproduction and sustaining capital costs are estimated at US$75.5 million.

* Polymetal International Plc signed the first off-take contract for concentrate from the Kyzyl gold-copper project in Kazakhstan. The buyer, one of the company's established trading partners, will purchase 50% of forecast Kyzyl production this year.

BULK COMMODITIES

* Adani Enterprises Ltd. abandoned its March deadline to complete the funding for the first stage of its proposed Carmichael coal mine in Queensland after a government loan for the project was completely taken off the table in late 2017. "It's no longer the timeline," an Adani Australia spokeswoman told The Australian Financial Review, adding that the company remains "100% committed" to the project.

* According to Sanjeev Gupta, his GFG Alliance vehicle will continue its buying spree this year, particularly targeting assets in the auto and steel sectors in India, and could raise capital through debt or equity markets, Reuters reported. GFG also plans to build out its Australian business, and Gupta said the pace of acquisitions would be the same as 2017, "if not faster."

* Tata Steel UK Ltd. CEO Bimlendra Jha said the British steel sector remains vulnerable despite its recovery from a 2015 crisis, with business rates still about 18 times higher than in neighboring EU nations and 50% more expensive electricity costs, Reuters reported.

* Ternium SA's profit attributable to shareholders in the fourth quarter of 2017 jumped to US$180.2 million, from the year-ago net income of US$118.4 million. Net sales in the three-month period surged 50% year over year to US$2.77 billion, mainly on the back of higher steel shipments, which rose 43% to 3.4 million tons.

* Eramet booked attributable net income of €203 million in 2017, swinging from a year-ago net loss of €179 million on the back of a favorable metals market. The group's results included an impairment of €42 million, compared to €167 million recorded in 2016. Meanwhile, Eramet CEO Christel Bories said the group is eyeing an expansion in cobalt, lithium and nickel salts linked to energy transition markets such as electric vehicles and is actively seeking acquisition opportunities after buying a lithium deposit in Argentina, Reuters reported.

* The fertilizer market is nearing the end of a large cycle of phosphate capacity additions in 2018, which will result in a "long gap" while new projects are being developed, buoying prices, said Tom Luigs, EuroChem Mineral Chemical Co. OJSC's global product manager of phosphates and potash. "This gives time for any phosphate capacity increase to be digested by the market and be caught up by the demand growth that we are seeing for the years to come, especially considering the grain stock situation," Luigs said in an interview with S&P Global Market Intelligence.

* BHP Billiton CEO Andrew Mackenzie said the company remains interested in establishing a joint venture for the Jansen potash project in Saskatchewan to share development costs, the Financial Times reported. However, he added that chances of a deal in the near term are slim.

* Mongolia can develop a power plant at the Tavan Tolgoi coal mine by 2021 to supply Rio Tinto's Oyu Tolgoi copper mine, Reuters reported, citing the country's energy officials.

* South Africa's Department of Mineral Resources warned that the Optimum coal mine will be suspended if its managers fail to comply with the site's social and labor plan, Bloomberg News reported.

* Legal and accounting advisers reviewing bids for Essar Steel India Ltd. are recommending that all bids be disqualified, Bloomberg News reported, citing anonymous sources. Global steel giant ArcelorMittal and a consortium led by Russia's VTB Group were the only two bidders for the insolvent steel company.

SPECIALTY

* Walkabout Resources Ltd. received approval from the China Export Credit and Insurance Agency for funding 80% of the China-sourced project equipment for its Lindi Jumbo graphite project in Tanzania.

* Lucara Diamond Corp.'s net income in the fourth quarter of 2017 shrunk to US$1.7 million from US$11.2 million a year ago, while revenues dropped to US$37.1 million, from US$66.0 million in the fourth quarter of 2016, due to a lower average price per carat sold of US$535, compared to US$743 in the prior-year quarter. Operating expenses per carat sold increased to US$255 in the quarter from US$197 million a year ago.

* A Chilean appeals court accepted two protection claims filed by indigenous communities in Atacama region against the recent agreement reached between Sociedad Quimica y Minera de Chile SA and Chilean development agency Corfo over the development of lithium deposits in northern Chile. Claimants argue that the deal was reached without the consent of local indigenous communities, in severe violation of Convention 169 by the ILO, daily La Tercera reported.

* Thor Mining PLC decided to accelerate the development of its Pilot Mountain tungsten project in Nevada and kicked off the second phase of metallurgical testing and scoping study work. The decision came after the U.S. Department of the Interior published a draft list of critical minerals in the Federal Register, which includes tungsten.

INDUSTRY NEWS

* The Tanzanian government implemented new mining regulations that will limit foreign ownership of mining-related operations as the country looks to take more of the sector's profits. According to Reuters, the new rules took effect in January, restricting the way in which foreign-owned banks, insurance companies and law firms conduct business with mining companies.

* South Africa's parliament plans to investigate allegations of influence peddling against the country's mines minister, Mosebenzi Zwane, Reuters reported.

* The government of Rwanda will release 50 new licenses for metals mining, including gold, tin and tantalum, in a bid to bolster investment in the country this year. According to Bloomberg News, the Rwanda Development Board expects to attract US$2 billion of investments this year from US$1.67 billion last year.

* The National Stock Exchange of Australia, or NSX, launched an assault to take on the ASX "head to head" with a bid to lure the country's mining explorers to list. "A wave of entrepreneurial activity coupled with high retail investor participation rates in Australia has opened up significant opportunities for us," NSX CEO Ann Bowering said at the RIU Explorers Conference in Fremantle, Western Australia.

The Daily Dose is updated as of 7 a.m. ET and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.