Archive | Nickel Laterites

COLUMN-Nickel flies on supply hits; Indonesia could ground it – by Andy Home (Reuters U.S. – February 16, 2018)

LONDON, Feb 16 (Reuters) – Nickel has enjoyed a blistering start to 2018. On the London Metal Exchange (LME) three-month nickel has this week punched up through the $14,000 level for the first time since May 2015 to hit a Thursday high of $14,420 per tonne.

It has gained 10 percent since the start of the year and has bounced 34 percent from its December low of $10,740 per tonne. Speculative money has poured into this hot market, fund managers tripling their net long exposure LME-NI-MNET to the London contract over the course of December and January.

Shanghai investors have been equally enthusiastic, albeit with a Chinese twist of treating nickel as a bullish steel rebar derivative. Nickel is basking in the electric vehicle glow but the full demand impact is still in the future. Continue Reading →

A look behind Sherritt’s double financing victory – by Barry Critchley (Financial Post – February 15, 2018)

The Canadian resource company bought back $121.223M of three classes of debt at an aggregate cost of $110.331M plus accrued interest

It looks like a classic win-win, now that the second part of a financing package unveiled one month back by Sherritt International has closed: the issuer raised more equity than originally intended and bought back more debt than anticipated — and at a slightly lower price.

Wednesday, Sherritt announced it had bought back $121.223 million of three classes of debt at an aggregate cost of $110.331 million plus accrued interest. Under normal circumstances, that debt was set to mature over the period of 2021-2025. Because of the buy-back the company now has about $600 million of debt outstanding — down from $720 million previously.

Sherritt bought the debt back through a modified Dutch auction: prior to the auction, it posted maximum prices; asked holders to submit their proposals, indicated those proposals “must be less or equal to the maximum price,” and then picked the so-called market-clearing price. Continue Reading →

Sherritt narrows headline loss as cost savings, higher metal prices boost bottom line – by Henry Lazenby ( – February 14, 2018)

VANCOUVER ( – Canadian diversified miner Sherritt International has narrowed its headline loss for the 12 months ended December 31, as lower costs and higher commodity prices boosted the bottom line.

The Toronto-based miner, which produces nickel, cobalt and oil in Cuba, and nickel and cobalt at the Ambatovy mine, in Madagascar, reported an adjusted net loss of C$317.1-million, or C$1.07 a share outstanding, compared with an adjusted net loss of C$427.9-million, or C$1.46 a share outstanding, for 2016.

Net earnings for the period, including a C$629-million gain related to the Ambatovy Joint Venture (JV) restructuring, were C$293.8-million, or C$0.99 a share outstanding, up from a net loss of C$378.9-million, or C$1.29 a share outstanding, in 2016. Revenue for the period fell 22% to C$54.8-million. Continue Reading →

Analysis: Southeast Asian nickel ore producers may miss the boat on EV demand – by Eric Yep ( – February 8, 2018)

Two key Southeast Asian nickel ore producers that shaped the market in recent years — the Philippines and Indonesia — are poorly placed to take advantage of a boom in battery demand from the growing electric vehicles market.

Their predicament stems from the lack of technology and investment needed to produce Class 1 battery-grade nickel sulphate — a direct outcome of the regulatory policies enforced by the two countries in recent years.

Two years ago, the Philippines and Indonesia were two of the world’s largest producers of nickel ore, accounting for a third of global production. The type of nickel laterite ore produced by them largely feeds the steel industry in China. Continue Reading →

GRAPHIC-China demand and tight supplies set to sustain nickel price rally – by Zandi Shabalala (Reuters U.S. – January 30, 2018)

LONDON, Jan 30 (Reuters) – A combination of surging China imports, tighter supplies and fund interest are expected to sustain prices of stainless steel ingredient nickel, which have reached their highest level in more than two years.

Benchmark nickel on the London Metal Exchange hit $14,040 a tonne on Monday, the highest since May 2015 and a gain of more than 55 percent since June.

“The fundamental story for nickel has started off well and it is looking good for at least the next couple of years,” said Wood Mackenzie analyst Adrian Gardner. Wood Mackenzie forecasts a deficit of between 80,000-90,000 tonnes this year following a deficit of similar levels in 2017. Continue Reading →

Sherritt gets creative with debt and equity financings – by Barry Critchely (Financial Post – January 18, 2018)

For those who like their financings complex, the recent news from Sherritt International will provide sufficient fodder for at least a few meals.

Over two days, it announced: a $100 million offering of units; a plan to purchase, by way of a Dutch auction, up to $75 million of high-yield debentures; and the pricing of the unit offering, which because of strong demand, ended up at $115 million.

And, as a little something on top, the unit offering consisted of a share and half a warrant linked to the high-flying price of cobalt, a metal Sherritt produces. The equity deal is Sherritt’s first in a decade. Continue Reading →

Cobalt and 11% Yields Lure Risk-Takers to This Canadian Miner – by Allison McNeely (Bloomberg News – January 10, 2018)

Sherritt International Corp.’s double-digit bond yields are beginning to lure investors, even as questions linger about whether the Canadian miner has unloaded enough debt and turned around its sputtering projects.

The Toronto-based firm restructured its Ambatovy mining joint venture in Madagascar last month, cutting debt by about C$1.3 billion ($1 billion) and ceding most of its stake in the money-losing business. But the nickel mine has never met production goals, and meanwhile an oil and gas venture with the Cuban state oil company has been delayed after failing to reach its first-round drilling target.

Strengthening commodity prices have spurred investors to push Sherritt’s bonds up from their 2017 lows, but skepticism is still reflected in the yield of nearly 11 percent, about twice the level of high-yield peers. In a world where credit spreads are at 10-year lows, the payout is too good to pass up for some investors. Continue Reading →

Slowing China demand to curb PH nickel ore exports – by Karl R. Ocampo ( – January 6, 2018)

Weaker metal demand from China is expected to affect the local mining industry, which has been the Mainland’s chief supplier when it came to nickel ore.

According to a report by the World Bank entitled “Commodity Markets Outlook,” there is a possibility for the booming Chinese economy’s consumption of metal to flatline as it limits its output and exports due to tighter environmental policies.

Moreover, the shift of that country’s focus from manufacturing to services might bring demand for steel in particular to dip. For the last 15 years, the World Bank said China has accounted for the bulk of global growth in the consumption of metals as it continued to grow its red-hot economy. Continue Reading →

[Philippine Mining] ‘Responsible mining’ key to industry’s survival – by Karl Ocampo ( – December 28, 2017)

n 2016, the mining industry was greeted with the appointment of Regina Paz Lopez as the country’s environment secretary, a staunch environment advocate who had President Duterte as one of her earnest backers.

According to the President, appointing Lopez as environment secretary was a no-brainer. He recalled a passionate woman entering his office in Davao who flew all the way from Manila to show him pictures of environmental destruction caused by mining. He needed no convincing that this woman was right for the job.

It was no surprise then that Lopez’s 11-month tenure, which carried over until the early part of 2017, became the precedent of a tumultuous year for the mining industry. Continue Reading →

Miners Invest $5b in Indonesia Nickel Smelters in First 10 Months – by Sarah Yuniarni (Jakarta Globe – December 28, 2017)

Jakarta. Thirteen mining companies have invested a combined $5.03 billion in the construction of nickel smelters during the first 10 months of this year to comply with Indonesian government requirements, an official at the Ministry of Energy and Mineral Resources said.

President Joko “Jokowi” Widodo issued a government regulation earlier this year to amend several articles in a 2010 mining regulation, which now requires miners to process raw materials within Indonesia before exporting them. To do this, miners must build smelters to produce value-added products.

“Our new regulation, issued [by the president] this year, contributes to the value-added nickel products and it has had a positive impact on smelter investment this year,” Bambang Gatot Aryono, the ministry’s director general of coal and minerals, told reporters on Wednesday (27/12). Continue Reading →

RPT-COLUMN-Blue skies, green cars and a year of revolution for industrial metals – by Andy Home (Reuters U.S. – December 21, 2017)

LONDON, Dec 22 (Reuters) – A little bit of metals history was recorded on March 29 this year. The small Central American country of El Salvador became the first nation to ban all exploration, mining and processing of metals.

Don’t worry if you didn’t notice. El Salvador doesn’t have any operating mines. It was going to have a gold mine, but in a public debate pitting economic growth against clean water supply, water won. Such environmental push-back against mining has become an ever more common feature of the metals industry.

But this year has marked a tipping point with China, a dominant producer of so many industrial metals, launching its own clamp-down on pollution. Multiple supply chains from aluminium to zinc have been disrupted with largely bullish, albeit at times chaotic, price impact. Continue Reading →

Vale’s reality check for nickel’s electric vehicle dreams – by Andy Home (Reuters U.S. – December 12, 2017)

Nickel is one of the materials expected to win from the coming electric vehicle (EV) revolution. Electric vehicles will be powered by lithium-ion batteries, which need cobalt and nickel. Indeed, as cobalt’s potentially fragile supply chain comes under ever-increasing scrutiny, battery-makers are likely to try to use less of the stuff in favor of more nickel.

So it might seem strange that the world’s largest nickel producer is actively curtailing capacity at mines and refineries. Yet that is precisely what Brazil’s Vale is doing, removing around 100,000 tonnes of supply over the next two years.

While “everyone knows there are great opportunities” for nickel in the EV sector, “prices are not there”, according to Vale Chief Executive Fabio Schvartsman, speaking at an investor event last week. Continue Reading →

Vale to mothball New Caledonia nickel mine if no stake buyers found – by Neil Hume (Financial Times – December 8, 2017)

Vale will mothball its troubled nickel project on New Caledonia in the second half of next year if it has not found a strategic partner prepared to purchase a stake of 20 to 40 per cent, according to its chief executive.

Speaking to journalists in London, Vale boss Fabio Schvartsman said the Brazilian miner would not continue to “invest and lose money” on the loss-making mine, which cost billions of dollars to build and has been dogged by problems.

Asked when the sale process would end Mr Schvartsman said June after which time the mine would be put on care and maintenance if a partner had not been found. Continue Reading →

Vale cuts nickel output but is positive on long-term demand – by Christian Plumb (Reuters U.S. – December 6, 2017)

NEW YORK (Reuters) – Brazilian miner Vale SA dialed back its nickel output forecasts for the next five years on Wednesday, although the world’s top producer of the metal praised its longer term prospects on likely soaring demand for electric cars.

Vale cut its nickel output estimate by 15 percent to 263,000 tonnes next year and said it was still seeking an investor for its New Caledonia nickel mine.

However, Vale wants to “preserve its nickel optionality” ahead of an expected boom in electric vehicles in the next decade, said Jennifer Maki, executive director of Vale’s base metals unit, at an annual investor presentation in New York. Continue Reading →

Nickel slides to six-week low on deteriorating fundamentals (Australian Financial Review/Reuters – November 29, 2017)

Nickel prices hit their lowest level in more than six weeks on Tuesday as the market fretted about weaker demand in top consumer China and rising supplies from major producer Indonesia.

Benchmark nickel on the London Metal Exchange ended down 1.9 per cent at $US11,350 a tonne. In earlier trading the metal used mostly in stainless steel fell to $US11,255, its lowest since October 12.

Copper slipped 2 per cent to $US6805, aluminium fell 1.5 per cent to $US2102.5, zinc lost 0.9 per cent to $US3158, lead ceded 1.5 per cent to $US2427 and tin was down 0.1 per cent at $US19,550. Continue Reading →