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BHP Billiton says costs of proposed spinoff would outweigh benefits

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BHP Billiton says costs of proposed spinoff would outweigh benefits

TOP NEWS

BHP not in favor of shareholder proposal to spin off US oil assets, unify structure

BHP Billiton Group said the costs and risks associated with Elliott Management Corp.'s proposal to spin off certain assets would significantly outweigh any potential benefits. The New York-based hedge fund urged the company to spin off about US$22 billion of U.S. oil assets, to return capital through share buybacks and to streamline its corporate structure.

Anglo American selling South African thermal coal operations for 2.3B rand

Anglo American Plc is selling its Eskom-tied domestic thermal coal operations in South Africa to a wholly owned subsidiary of Seriti Resources Holdings Pty. Ltd. for 2.3 billion South African rand. The sale includes the New Vaal, New Denmark and Kriel collieries, as well as four closed collieries.

Argentina regulator calls for full suspension of Barrick's Veladero mine

Argentina's environmental ministry requested a federal court to halt all operations at Barrick Gold Corp.'s Veladero mine "until there is a guarantee that there will be no environmental damages," Reuters reported. In a meeting with Barrick executives including President Kelvin Dushnisky, national and provincial officials told the company that it must overhaul environmental and operating processes at Veladero, following another cyanide spill at the mine.

DIVERSIFIED

* Rio Tinto said it paid US$4 billion in taxes and royalties in 2016 with the majority of its taxes paid in Australia, Canada, Mongolia, Chile, the U.S. and South Africa. Meanwhile, the Financial Times wrote that the mining giant's CFO, Chris Lynch, urged the Australian government to go ahead with its proposal to cut corporate taxes despite the political opposition. "If Australia remains with a 30% corporate tax rate, this will come at a cost to investment and jobs, as other nations leave Australia behind," Lynch said.

BASE METALS

* Nickel mining has been suspended after Category-3 Cyclone Cook hit New Caledonia on April 10, Reuters reported. Eramet unit Societe Le Nickel suspended mining at five sites but continued the smelting operations in the capital at a reduced level.

* Jiangxi Copper Co. Ltd. expects its net profit attributable to shareholders in the first quarter to jump by 140% to 160%, compared to the year-ago net profit of 201.4 million Chinese yuan, or 6 fen per share. The company attributed the anticipated increase to the recent surge in the prices of its main metal products.

* Trilogy Metals Inc. granted an option to form a 50/50 joint venture over its copper-prospective Upper Kobuk Mineral Projects in Alaska to South32 Ltd. by investing at least US$150 million. South32 will be required to fund US$10 million per year for up to three years to keep the option in good standing.

* Chile's state copper commission, Cochilco, sees upcoming contract negotiations between workers and mining companies in the country as being easier compared to the inconclusive end to the 43-day strike at BHP Billiton's Escondida mine, Metal Bulletin reported.

* Antofagasta Plc is expected to reach agreements in the upcoming labor contract renegotiations in May at its Zaldivar, Los Pelambres and Centinela copper mines in Chile, daily El Mostrador reported. Union officials said the company's "open-door" policy and pro-union stance have allowed it to conduct and reach favorable collective negotiation processes, thus avoiding strikes successfully.

* OZ Minerals Ltd. signed an option to earn up to a 75% interest in Avrupa Minerals Ltd.'s Alvito copper-gold exploration project in southern Portugal.

PRECIOUS METALS

* Centamin Plc reported a 13% year-on-year drop in its preliminary gold production for the first quarter, to 109,187 ounces, at the Sukari gold mine in Egypt.

* Pan African Resources Plc said the refurbishment of the 7 and 8 Shaft complex at its Evander gold mines in South Africa is progressing on time and is expected to be complete by April 15 and be within the 40 million South African rand cost estimate.

* Anconia Resources Corp. is exercising the option to fully acquire the Grenfell gold property in Ontario. The company holds a 60% stake in the property under a 2014 earn-in deal and will issue 5 million common shares to acquire the remaining 40% stake in the property.

* Barron's wrote that Barrick Gold's shares could jump 30% in 2018 as the miner develops new projects in Nevada and Peru and increases production, Reuters reported.

* Red Eagle Mining Corp. declared commercial production at the San Ramon gold mine, part of the Santa Rosa property in Colombia, on March 31.

* Hong Kong's Chinese Gold & Silver Exchange Society is in talks to aid the Myanmar government in setting up a precious metals trading market, the South China Morning Post reported.

BULK COMMODITIES

* WL Ross & Co. LLC, China Baowu Steel Group Corp. Ltd.'s Hwabao Investment Corp., U.S.-China Green Fund and China Merchants Finance Holdings Co. Ltd. agreed to form an investment vehicle for steel asset acquisitions in China. The joint venture will be called Four Rivers Investment Management Co. and expects to invest between 40 billion Chinese yuan and 80 billion yuan in the sector with a view to restructure balance sheets and create operational efficiencies.

* China Hanking Holdings Ltd. President and CEO Pan Guocheng said the company is planning to launch a US$100 million fund with joint venture partners for mining asset acquisitions and secure US$200 million in lines of credit. He told S&P Global Market Intelligence that the company may sell high-cost iron ore projects to optimize its asset portfolio.

* High-grade iron ore prices sank April 7 by 6.8%, to US$75.45 per tonne, due to slackening end-use steel demand, Bloomberg reported.

* Hong Kong's Market Misconduct Tribunal determined that CITIC Ltd. and its former directors did not mislead the market in information disclosures made concerning its financial position in a circular dated Sept. 12, 2008.

* Centaurus Metals Ltd. granted a 12-month option over its Conquista iron ore project in southeast Brazil to Ecosinter-Indústria de Beneficiamento de Resíduos Ltda.

* Strategic Minerals Plc unit Southern Minerals Group entered a supply agreement with a private company to provide 400,000 tonnes of magnetite, commencing June 1.

* Adani Enterprises Ltd. plans to ask Australian Prime Minister Malcolm Turnbull during his three-day state visit to India to close a A$900 million deal under the Northern Australia Infrastructure Fund to support the company's Carmichael coal mine in Queensland, The Australian reported.

* ThyssenKrupp AG plans to cut costs at its European steel unit by €500 million over three years, which will cover improving cost efficiency in areas such as personnel, maintenance and repair, logistics, sales and administration, Reuters reported. The German group is seeking to merge the steel unit with Tata Steel Ltd.'s European business.

* The geology and mineral exploration bureau of China's Guizhou province discovered a reserve estimated to contain 203 million tonnes of manganese in the southwest portion of the province, Reuters wrote. The reserve is said to be the largest in Asia and has a potential value of over 100 billion Chinese yuan.

* Meanwhile, Bloomberg News wrote that due to disruptions in the supply following Cyclone Debbie, coking coal ended last week with an 86% increase in its per-tonne price to US$283.10, the biggest gain in four years and the highest price since Dec. 9, 2016.

* Moody's upgraded Ferrexpo Plc's corporate family rating and probability of default rating to Caa2 and Caa2-PD, respectively, from Caa3 and Caa3-PD, with a stable outlook on all ratings. The upgrade reflects expectations of strong cash flow generation through 2018 on the back of improved iron ore prices.

SPECIALTY

* Codelco's board of directors authorized the creation of a subsidiary for the exploration and production of lithium in the Maricunga and Pedernales salt flats in northern Chile. The plan is for the company to develop the deposits in a joint venture with a private partner, daily El Mercurio de Calama reported.

* Bacanora Minerals Ltd. entered an agreement with Japanese company Hanwa Co. Ltd. for the latter to undertake a 10% equity investment and purchase battery-grade lithium carbonate produced at the Sonora lithium project in Mexico.

* Bluejay Mining plc reported a maiden inferred resource of 23.6 million tonnes at 8.8% ilmenite at the Pituffik titanium project in Greenland.

* Image Resources NL increased ore reserves by 39% to 20.0 million tonnes at 7.2% total heavy minerals at the Boonanarring mineral sands project, part of the North Perth Basin property in Western Australia.

* Equitorial Exploration Corp. completed the acquisition of the Tule Valley lithium brine project in Utah and Gerlach lithium brine property in Nevada from Umbral Energy Corp.

INDUSTRY NEWS

* The U.S. Securities and Exchange Commission is partially suspending enforcement of the conflict minerals rule after the U.S. District Court for the District of Columbia remanded it back to the securities regulator, saying the rule violates the U.S. constitution. "The primary function of the extensive and costly requirements for due diligence on the source and chain of custody of conflict minerals ... is to enable companies to make the disclosure found to be unconstitutional," according to the statement.

* The South African government failed to use the mining sector to effect transformation in the country's economy as the industry's share in the GDP has declined, the country's Minister in the Presidency Jeff Radebe said, according to Fin24.

* The number of mining IPOs in Australia this year already surpassed the total in 2016, but some newly listed Australian mining companies are trading significantly below their listing price, while others attempting to list have had to extend the closing dates for their offers.

* Following the first summit between U.S. President Donald Trump and Chinese President Xi Jinping in Florida, both sides emerged agreeing on "100-day plan" to address their trade imbalance, Bloomberg News reported.

* Meanwhile, the Trump administration is reviewing attempts by China to buy sensitive U.S. businesses and is actively trying to thwart a potential takeover of Westinghouse Electric Co.'s nuclear business by Chinese investors, Bloomberg News wrote. The most pressing of the review remains Sibanye Gold Ltd.'s acquisition of Stillwater Mining Co., the sole U.S. source of platinum and palladium, as Sibanye's biggest shareholder is a consortium with ties to the Chinese government.

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.