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Nickel Laterites

Exclusive: After crackdown, Philippines plans fresh mining curbs – by Manolo Serapio Jr and Enrico Dela Cruz (Reuters U.S. – April 23, 2018)

https://www.reuters.com/

MANILA (Reuters) – The Philippines is planning to limit the amount of land that miners can develop at any one time to boost environmental rehabilitation, a move that miners say may cut output of nickel ore in last year’s top supplier to China.

The new curbs, contained in a draft government order reviewed by Reuters and confirmed by senior officials, follow a crackdown last year that has left more than half the country’s mines facing suspension or closure due to environmental breaches.

Mining is a deeply contentious issue in the resource-rich Southeast Asian country after past examples of environmental mismanagement.

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Philippines’ Duterte orders reforestation, threatens open pit mining ban (Reuters U.S. – April 9, 2018)

https://www.reuters.com/

MANILA (Reuters) – Philippines President Rodrigo Duterte on Monday ordered mining companies to conduct tree planting projects and threatened to ban all open pit mining next year.

The Southeast Asian nation’s mining sector has been under fire by Duterte’s government for environmental damage and alleged violations that include building mines in prohibited areas like watersheds. The fiery leader said miners should make an extra effort to plant trees in areas denuded by mining.

“I want trees as tall as me in six months. If there is none, consider your permit revoked. Do not wait for the day of your sorrow,” Duterte told reporters prior to departing for China.

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COLUMN-Is there an electric accelerator to falling nickel stocks? – by Andy Home (Reuters U.S. – April 3, 2018)

https://www.reuters.com/

LONDON, April 3 (Reuters) – Stocks of nickel held in London Metal Exchange (LME) warehouses MNI-STOCKS fell by 46,344 tonnes, or 12.6 percent, over the first quarter.

The downtrend has been running for seven consecutive months but there has been a marked acceleration since the start of January.

Cancellation activity, metal being taken off warrant in anticipation of physical load-out, has also been elevated. There were 54,294 tonnes of net new cancellations last month, most of them at the Malaysian port of Johor.

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Duterte’s Mining Crackdown Is Keeping the Metals World in Suspense – by Andreo Calonzo (Bloomberg News – March 27, 2018)

https://www.bloomberg.com/

The global nickel market will be kept in suspense even longer over the outlook for ore supplies from the Philippines after the country’s mining council again pushed back the deadline for completion of a review of 26 mines ordered shut or suspended last year.

Former Environment Secretary Gina Lopez ordered the closures as part of a mining crackdown led by President Rodrigo Duterte. The new delay could mean the review won’t be ready before August, after an initial pledge to finish it by the end of last year.

The miners have appealed the shutdowns and are still operational, Environment Undersecretary Jonas Leones said Tuesday. “All administrative and judicial remedies have to be exhausted for the orders to be final and executory,” Leones said in a phone interview.

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Indonesia says mining firm cost state US$4 billion – by Konradus Epa (UCA News – March 21 2018)

https://www.ucanews.com/

UCA News is an Asia-based independent Catholic news source.

Indonesia’s anti-graft body has billed environmental destruction as an official state loss for the first time, citing the case of a nickel mining company in Sulawesi province amid fears of mismanagement in the sector.

The Corruption Eradication Commission (KPK) said recently the damage wrought by PT Anugrah Harisma Barakah in Kabena Island, in the southeast of the province, has cost the government an estimated US$4 billion.

The company was granted the right to exploit 3,000 hectares of land but it has destroyed the ecosystem of the island and jeopardized oil deposits, officials claim.

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Indonesia projected to lead in global nickel production – by Viriya P. Singgih (The Jakarta Post – March 9, 2018)

http://www.thejakartapost.com/

Growth in global nickel production is expected to accelerate in 2018, driven by Indonesia’s ongoing recovery since 2017 and a rebound in production from major markets such as Australia, Canada and Russia, according to Fitch Group think tank BMI Research.

BMI Research has forecast global nickel production growth at an annual average rate of 3.5 percent in the 2018-2027 period, slightly slower than the average rate in the previous 10-year period. It expects global annual nickel production to reach 2.9 million metric tons by 2027.

“The best-performing country in terms of nickel production growth during 2018-2027 will be Indonesia, as output there continues to recover following the moderation of its export ban in January 2017,” BMI Research stated in a report published on Thursday.

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Commentary: Why electric vehicles could fracture the nickel market – by Andy Home (Reuters U.K. – March 8, 2018)

https://uk.reuters.com/

LONDON (Reuters) – China’s Ministry of Finance made some minor but significant tweaks to its nickel import tariffs at the start of this year.

The import duty on melting-grade nickel cathode was doubled from 1 percent to 2 percent, while that on nickel sulphate was cut from 5.5 percent to 2 percent. Why the differentiation?

The reason is that nickel sulphate is a form of the metal highly suited to the production of precursor battery materials. China, already a leader in the electric vehicle (EV) battery sector, is evidently laying the ground for stimulating imports of nickel in the most readily usable composition for lithium-ion battery processing.

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Vale aims to cut nickel output costs as world glut looms – by Marta Nogueira and Alexandra Alper (Reuters U.S. – February 28, 2018)

https://www.reuters.com/

RIO DE JANEIRO (Reuters) – Brazil’s Vale, the world’s no. 1 nickel producer, plans to save well over $150 million by reducing costs across its nickel operations, which have notched positive cash flow for the past two months, company executives said on Wednesday.

As the miner strives to diversify away from its massive iron ore presence, it is aiming for base metals to account for at least 30 percent of its financial results by the end of 2019. Last year, base metals stood at about 14 percent of earnings before interest, taxes, depreciation and amortization (EBITDA).

“I hope that the 30 percent estimate turns out to be conservative in terms of the share that base metals have in Vale’s results,” Chief Executive Officer Fabio Schvartsman said in a conference call with analysts, a day after the company reported a 47 percent jump in fourth-quarter earnings.

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Vale CEO eyes first quarter results in line with fourth quarter (Reuters U.S. – February 28, 2018)

https://www.reuters.com/

RIO DE JANEIRO (Reuters) – Brazilian miner Vale should achieve results in the first quarter that are similar to those in the final three months of 2017, the chief executive officer of the world’s top iron ore producer said on Wednesday.

In a conference call after the company reported a nearly 50 percent jump in profit in the fourth quarter, Fabio Schvartsman said the similar financial performance would come despite what is usually a weaker January to March period.

“In terms of Vale’s overall performance for the first quarter of 2018, despite the fact that admittedly the first quarter is seasonally weaker, we still expect to deliver results substantially in line with fourth-quarter results last year,” he said.

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

https://www.reuters.com/

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.

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

http://business.financialpost.com/

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.

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

http://www.miningweekly.com/

VANCOUVER (miningweekly.com) – 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.

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

https://www.platts.com/

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.

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

https://www.reuters.com/

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.

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

http://business.financialpost.com/

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.

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