Iron Ore Crisis Could Be Followed By A Nickel Crisis For BHP Billiton And Vale – by Tim Treadgold (Forbes Magazine – November 13, 2015)

The last thing two of the world’s biggest mining companies, BHP Billiton and Vale , need today is speculation that after the disaster at their jointly owned Samarco iron ore mine in Brazil they might also have to close big nickel-mining operations to stem a tide of heavy losses.

That, however, is precisely what has been suggested by research analysts at the investment bank Credit Suisse who have painted a depressing picture of demand for the metal which is largely used to make stainless steel.

Vale, as well as being the world’s biggest iron ore miner is the world’s biggest nickel producer thanks largely to its 2006 takeover of Canada’s Inco.

BHP Billiton is also a big nickel producer via its Australian business unit, Nickel West. The attraction of nickel to both is that buyers are essentially the same, with companies that buy iron ore also buyers of nickel to make stainless steel.

Rocked To Their Cores

Last week’s dam burst and mudslide at Samarco rocked BHP Billiton and Vale to their cores because both were proud of their safety records but it now appears that the dam which failed had been the subject of an unfavorable stability report about two years before it gave way.

The death toll from the dam failure has rise to nine with 19 people still missing.

But, even as the search continues and accusations are made about unsafe mining practices, the spotlight is switching to nickel once a major profit contributor for both BHP Billiton and Vale but now a problem which needs to be fixed.

50% Of The World’s Nickel Mines Are Losing Money

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