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US Commerce Department proposes global tariffs on steel, aluminum

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US Commerce Department proposes global tariffs on steel, aluminum

TOP NEWS

US Commerce Department proposes global tariffs on steel, aluminum

U.S. Department of Commerce Secretary Wilbur Ross recommended that President Donald Trump take "immediate action" to impose tariffs on imports of steel, a move that could be a boon to U.S. metallurgical coal producers. Ross' report recommends that Trump takes one of three actions: a global tariff of 24% on all steel imports, a tariff of at least 53% on steel imports from a targeted list of 12 countries or a quota on all countries' steel imports capped at 64% of their 2017 sales into the U.S. The remedies aim to increase domestic steel production from the current 73% of capacity to an approximately 80% operating rate.

Vale posts record iron ore production in 2017

Vale SA's iron ore production rose 1.1% year over year to 93.4 million tonnes in the fourth quarter of 2017 and 5.1% to 366.5 million tonnes in the full year, driven by record production at its Northern System operations in Brazil, due to the S11D mine and plant ramp-up. The company's pellet output came in at 50.3 million tonnes, which was a record and an 8.8% improvement over 2016 thanks to higher productivity and less scheduled maintenance stoppages. Quarterly pellet production increased 2.2% to a record of 12.9 million tonnes.

Acacia confirms Chinese interest in Tanzania gold assets

Acacia Mining plc confirmed media reports that Chinese buyers are interested in its assets in Tanzania, amid talks with the government to resolve outstanding issues that have forced it to idle production, crippling its cash flow. The company, which is majority-owned by Barrick Gold Corp., said it had received expressions of interest in some or all of its Tanzanian operations.

DIVERSIFIED

* Institutional investors Plato Investment Management and Baring Asset Management are seeking a detailed explanation from BHP Billiton Group on its reluctance to unify the company's dual-listed structure, The Australian Financial Review reported. This follows activist shareholder Elliott Management's renewed push for the simplification of the mining giant's structure.

* BHP spinoff South32 Ltd. appointed Vanessa Torres chief technology officer. An effective date has not been confirmed. Torres is joining from BHP, where she worked for more than 10 years in strategy and operations, most recently as the vice president of operational infrastructure at the mining major's iron ore division.

* Rio Tinto CEO Jean-Sebastien Jacques said the company's productivity drive will also set a foundation for the miner to pursue mergers and acquisition opportunities, The Australian reported. However, the executive added that the company will set a very high threshold on value for any acquisitions.

* Meanwhile, Jacques said the company is engaging with The Australasian Centre for Corporate Responsibility, the activist group demanding a review of Rio Tinto's Minerals Council of Australia membership, The Australian reported. The executive said that while industry bodies have roles to play, it does not mean Rio Tinto always agrees with their position and that the company has its own voice.

BASE METALS

* Rio Tinto will evaluate all viable power options for Turquoise Hill Resources Ltd.'s Oyu Tolgoi mine after the Mongolian government terminated the power sector cooperation agreement. Oyu Tolgoi is now obliged to deliver a domestic power source for the operation within four years, with the cost and means of financing to be finalized between shareholders. The company noted that it has already earmarked US$250 million per year for developing a power station in Mongolia in its 2019 and 2020 CapEx forecasts.

* The prospects of an old dispute among Russian oligarchs over controlling PJSC Norilsk Nickel Co. being rekindled has seen the company's shares drop, along with United Co. Rusal Plc, Bloomberg News reported. Rusal President Oleg Deripaska sought an injunction in a London court to stop Roman Abramovich's Crispian Investment Ltd. from selling a portion of its stake in Norilsk, which is the world's largest palladium producer and produces metals including nickel and copper.

* Mitsui & Co. Ltd. entered into an agreement with JX Nippon Mining Metals Corp. to acquire its 3.60% equity share in the Collahuasi copper mine in Chile. The company separately agreed to sell its entire 1.25% equity share in the Los Pelambres copper mine, 0.79% to JX Nippon and 0.46% to Marubeni Corp. No deal values were provided for the sale and purchase agreements.

* Freeport-McMoRan Inc.'s PT Freeport Indonesia is still waiting for news about when it will obtain a new copper concentrate export permit from the Indonesian government after its current permit expired Feb. 16, The Jakarta Globe reported. Freeport Indonesia spokesperson Riza Pratama said the company does not know if its next copper concentrate delivery to foreign customers will be delayed as a result.

PRECIOUS METALS

* Despite a weaker performance in the first half of its fiscal year, Newcrest Mining Ltd. remains on track to achieve its production, cost and CapEx guidance for the full year. "We remain on track to achieve our annual guidance, with production expected to be stronger in the second half of the year, and [all-in sustaining costs] spend potentially being below the guidance range if copper prices remain around current levels," Managing Director and CEO Sandeep Biswas said on a conference call.

* Brio Gold Inc. shares jumped nearly 10% in early afternoon trading in Toronto on Feb. 16 after the miner's board agreed to back a sweetened offer and struck a definitive deal to be acquired by LeaGold Mining Corp. in an all-share deal valuing the company at C$314 million. In late January, LeaGold made an all-share takeover bid of US$264 million for Brio Gold.

* Australia's gold miners are preparing for a long, tough campaign to convince Queensland's government to lower its gold royalty, which industry says is among the highest in the world and threatens the future of the state's gold production. The campaign kicked off this month with a new discussion paper by advisory firm Grant Thornton, which makes the case for Queensland to move to an "ad valorem" or profit-based regime for gold on par with other Australian jurisdictions.

* Red 5 Ltd. intends to make a conditional off-market takeover of Bullseye Mining Ltd. The company will offer Bullseye shareholders 1 fully paid ordinary share for every 5 Bullseye shares held. The offer will value Bullseye at approximately A$4 million.

* Mexus Gold US said MarMar Holdings, the operating partner of its MexusGold SA de CV unit, produced 8.2 ounces of gold in a test run at the Santa Elena mine in Mexico, which was lower than expected. Mexus believes that MarMar's head engineer introduced chemicals to the heap leach pad that made gold recovery difficult, and the company brought in a new engineer who is making adjustments.

* Millennium Minerals Ltd. awarded an initial three-year mining contract to GBF Underground Mining Co. for the development of the Bartons underground mine, part of its Nullagine gold project in Western Australia. GBF will mobilize to Nullagine later in the month, with underground mining set to commence at Bartons in March.

* Hummingbird Resources Plc kicked off the 2018 exploration program at its Yanfolila gold mine in Mali and intends to spend US$8 million to US$10 million on exploration this year in a bid to extend the mine's life.

BULK COMMODITIES

* Century Aluminum Co. and AK Steel Holding Corp. supported the recommendation by the commerce department to impose tariffs on steel imports. Century Aluminum CEO Michael Bless said the report shows the administration recognizes that swift action is necessary to stop the surge of aluminum imports from affecting the industry. AK Steel CEO Roger Newport, meanwhile, urged prompt action on the recommendations.

* Australian Prime Minister Malcolm Turnbull is expected to request an exemption from potential steel duties by the U.S. government when he meets President Trump this week, The Australian Financial Review reported. Responding to the publication's query, Wilbur Ross said the president retained the discretion to exclude specific countries.

* Japan's Nippon Steel & Sumitomo Metal Corp. and JFE Holdings Inc. are concerned that the potential action by the Trump administration against steel imports could flood the Asian markets and that it may trigger retaliation by other countries, Reuters wrote.

* Norsk Hydro ASA's net earnings in the fourth quarter of 2017 more than tripled year over year to 3.60 billion Norwegian kroner, from 1.01 billion kroner a year ago. EBITDA rose 82% to 6.48 billion kroner as a result of higher realized alumina and aluminum prices that were partly offset by higher raw material prices and fixed costs.

* Whitehaven Coal Ltd. declared an unfranked interim dividend of 13 Australian cents per share for first half of its fiscal 2018 after achieving strong results on the back of higher coal prices. Net profit for the period grew 63% year over year to A$257.2 million. Meanwhile, the company revised down its salable coal production guidance to between 20.5 million and 21.0 million tonnes, from between 22 million and 23 million tonnes previously, following reduced production from the from the Narrabri mine during the first half.

* The Federal Court of Australia rejected a native title group's attempt to ban Adani Enterprises Ltd. from registering an indigenous land use agreement for its A$16.5 billion Carmichael coal development in Queensland's Galilee Basin, according to a social media post by Adani Australia.

* Fortescue Metals Group Ltd. said it achieved the milestone of awarding A$2 billion in contracts and subcontracts to Aboriginal businesses and joint ventures under its Billion Opportunities program.

SPECIALTY

* W Resources Plc entered into an agreement for a previously announced US$35 million secured term loan facility to fund development at the La Parrilla tungsten-tin mine in Spain.

* Latin Resources Ltd. signed a binding term sheet with Kontrarian Resources Fund No. 1 to acquire five lithium concessions covering 44,177 hectares in Argentina's San Luis province that are near the company's existing concession applications.

* PJSC Alrosa launched a 1.5 million-Russian-ruble contest for the best solution to restart underground mining at the Mir deposit, part of its Mirny Division in Russia, Mining Weekly reported. The company selected 33 applications for next stage of the contest.

INDUSTRY NEWS

* To give a boost to U.S. metal production, the Department of the Interior published a draft list of critical minerals in the Federal Register Feb. 16 as called for in a recent executive order by President Donald Trump. The draft list identifies 35 minerals, metals and groups of metals that are critical to the U.S. economy and military but may be vulnerable to dependence on foreign supplies.

* A South African industry group representing mining companies agreed to postpone a High Court challenge against new mining regulations to allow parties to engage in talks with new President Cyril Ramaphosa, Reuters reported.

* Western Australian miners have driven the state's business confidence to its highest single-quarter increase since the end of the global financial crisis, and analysts say their determination to boost production is a welcome respite for investors frustrated by years of disappointment despite back-to-back years of rising profits. The Chamber of Commerce and Industry Western Australia's December-quarter Survey of Business Confidence launched this week revealed that the state's miners were the sector expecting the greatest proportion of capital spend increases next quarter.

* Tropical Cyclone Kelvin hit the north coast of Western Australia, causing floods and forcing the closure of the Great Northern Highway that links Port Hedland with Kimberley region and Perth, Reuters reported. The cyclone is forecast to move south through East Pilbara, which produces an estimated US$15 billion of mining exports per year.

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