Twitter

Nickel Laterites

Canadian miner Sherritt posts wider loss as nickel prices drop (Reuters Canada – July 28, 2015)

http://ca.reuters.com/

(Reuters) – Canadian miner Sherritt International Corp S.TO reported a bigger loss for the second quarter, hurt by lower nickel prices.

The Toronto-based company said on Tuesday its adjusted net loss from continuing operations widened to C$75.2 million ($58.2 million), or 25 Canadian cents per share, in the three months ended June 30 from C$56.2 million, or 19 Canadian cents per share, a year earlier.

Sherritt operates nickel mines in Madagascar and Cuba. Average realized prices for nickel fell about 19 percent to $7.13 per pound in the quarter, the company said.

Sherritt, which also produces oil and gas, said its combined revenue fell about 12 percent to C$268.4 million.

Sherritt said it expected total production of 78,000-82,000 tonnes of nickel in 2015, down from a previous estimate of 80,000-86,000. The company cut the estimate for the Ambatovy mine in Madagascar to 45,000-48,000 tonnes from 47,000-52,000.

Read more

Vale’s Nickel IPO Chances Wane as Fires, Shutdowns Hurt Output – by Juan Pablo Spinetto(Bloomberg News – July 23, 2015)

http://www.bloomberg.com/

A fire in Canada, disruptions in Indonesia and shutdowns in Brazil and New Caledonia: it was tough getting nickel out of the ground last quarter for Vale SA.

Output of the metal at Vale, the world’s largest producer, missed estimates for a second consecutive quarter. The lower-than-expected production comes as a plunge in metal prices makes the Rio de Janeiro-based company’s plan to sell as much as 30 percent of the unit in an initial public offering less likely.

Vale said in its second-quarter output report Thursday that nickel production rose less than 9 percent to 67,100 metric tons, missing a 73,900-ton average forecast by seven analysts surveyed by Bloomberg. The result, called “poor” by BMO Capital Markets in a research note, puts production for the first half at 136,000 tons, or less than 45 percent of the company’s annual target of 303,000 tons.

Operations in the quarter were affected by a fire at its operations in Sudbury, Ontario, which reduced nickel and copper production by 5,000 tons each, furnace maintenance in Indonesia and a “brief shutdown” for plant improvement at the Onca Puma project in Brazil, Vale said. The miner is planning to close facilities at Sudbury and Thompson in August for maintenance, it said.

Read more

Only half of nickel smelters to be built in Indonesia this yr-industry (Reuters U.S. – July 8, 2015)

http://www.reuters.com/

JAKARTA – Nickel producers in Indonesia may only build half of the 12 new smelters anticipated this year and some may not commence production immediately due to low global prices, a senior industry official said.

Indonesia, which had been China’s top nickel ore supplier, brought in export restrictions last year aimed at forcing mining firms to build smelting and processing facilities so the country could earn more from raw ores and concentrates.

I.D. Susantyo, chairman of the Indonesian Nickel Association, expected only five or six nickel smelters would be completed by the end of the year. That is half the number anticipated by the mining ministry in April.

Susantyo said not all of the smelters built this year would start production as global prices drop to six-year lows of around $10,700 a tonne, nearly half of their peak last year.

“With nickel prices dropping like this, even though they are completed, they may not be able to produce because the market price is lower than the cost of production,” he said.

Read more

Two-Month Low Nickel Prices Continue to Slide Further Amid Nickel Glut – by Anne Lu (International Business Times – June 25 2015)

http://www.ibtimes.com.au/

A jump in nickel stockpiles has brought the metal to a two-month low as production continues to outstrip consumption, especially in China, the world’s biggest consumer of nickel. According to London Metal Exchange (LME) data, inventories rose 0.6 percent to 461,436 metric tonnes on Monday, its biggest gain in two weeks. Nickel for delivery in three months settled at US$12,410 [$16,000] a tonne — the lowest price since April 20.

“More metal continuing to show up in LME warehouses points to the fact that maybe the underlying demand isn’t as strong, and that has bearish implications,” Mike Dragosits, a senior commodity strategist at TD Securities, said in an interview with Bloomberg.

Analysts think that nickel prices still have further to fall, with many investors looking to get out of their positions at the earliest sign of a nickel rally. Many investors who were lured into nickel during the metal’s rally in early 2014 didn’t get out fast enough when the slide began, so they are lightening their positions every time the metal rallies, keeping a ceiling on the price.

Prices surged to 50 percent from January to mid-May 2014 as Indonesia, then the world’s top nickel exporter, banned exports of the metal, leading many analysts and investors believing that global nickel stockpiles are soon to be depleted.

Read more

The Potential Impact Of Easing Indonesian Nickel Export Restrictions On Vale – by Trefis Team (forbes Magazine – June 23, 2015)

http://www.forbes.com/

Vale is a diversified mining company and the world’s largest iron ore producer. Though iron ore sales account for a majority of the company’s revenues, Vale also has interests in the mining of base metals, particularly copper and nickel. Vale is among the world’s largest producers of nickel, and prices of the metal can have a significant impact upon the company’s stock price.

Nickel is mainly used in the production of stainless steel. With demand for stainless steel mainly correlated with industrial activity, prices of the metal have suffered due to weakness in Chinese economic growth.

However, there is a chance of a sharper fall in nickel prices, if the Indonesian government revokes a ban on unprocessed nickel exports instituted in 2014. The Indonesian government had banned unprocessed mineral exports in January, in order to boost domestic mineral processing capacity. Though the country relaxed restrictions on exports of copper, the ban on unprocessed nickel and aluminum exports still remains.

With the Indonesian government considering a relaxation of export restrictions on bauxite, which is the precursor for aluminum production, there is a chance that the Indonesian government may also consider relaxing restrictions on unprocessed nickel exports.

Read more

Workers at Madagascar Ambatovy nickel mine consider strike over jobs – by Lovasoa Rabary (Reuters U.S. – June 8, 2015)

http://www.reuters.com/

ANTANANARIVO – Workers at Sherritt International Corp’s Ambatovy nickel project in Madagascar are considering strike action over possible job cuts, a trade union official said on Monday.

The crisis at one of Madagascar’s biggest foreign investment projects comes as the poor but mineral-rich Indian Ocean state faces a political crisis after its parliament moved to sack President Hery Rajaonarimampianina late last month.

Rajaonarimampianina’s peaceful election victory in late 2013, the first vote since a 2009 military coup, was seen as a chance for stability after years of post-coup isolation.

“We could go up on strike, but we have to be careful before deciding to move in this direction,” said Richard Rakotovao, the head of union’s legal department, saying workers were concerned about a wave of job cuts.

But he added: “We fear that Ambatovy could decide to leave Madagascar, saying that there have been too many strikes here.” Representatives at Ambatovy and Sherritt, which is headquartered in Toronto and holds a 40 percent interest in the Ambatovy venture, had no immediate comment.

Read more

Nickel Mine, Lead Bullets: Maya Q’eqchi’ seek justice in Guatemala and Canada – by Sandra Cuffe (Mongabay.com – May 19, 2015)

http://www.mongabay.com/

German Chub faces the judge as he responds calmly and evenly to question after question during cross-examination. He uses his arms to lift himself up and shift a little in his wheelchair. Other young Maya Q’eqchi’ men had to carry him up the stairs to the second-floor courtroom in Puerto Barrios, a bustling Caribbean port city in eastern Guatemala.

Five and a half years ago, Chub was playing soccer in the community of La Unión, in the department of Izabal, when security guards from the Guatemalan Nickel Company (CGN), a mining corporation, showed up, he told the court. Chub heard a commotion coming from the direction of company-owned hospital property and approached the fence separating the company complex from the soccer field to see what was going on, he said.

“I saw Mynor Padilla pointing his pistol at me,” Chub testified. “When I turned around, I heard the gunshot.”

Chub is one of several Maya Q’eqchi’ community members shot on September 27, 2009 during a crackdown on protests over threats that a group would be evicted from its ancestral lands near CGN’s Fenix ferro-nickel mining project. Chub is paralyzed from the chest down as a result, and doctors determined it too risky to remove the bullet lodged near his spine.

Read more

Sherritt’s CEO optimistic about future nickel prices – Business Network News (The Street – April 29, 2015)

  http://www.bnn.ca/ David Pathe, Chief Executive Officer of Sherritt International, joins BNN’s “The Street” to discuss the mining industry, nickel, and relations with Cuba. He says that he sees a shift from excess nickel supply to surplus demand over the next several years, which will help the company’s bottom line. Despite lower production costs, Sherritt …

Read more

Philippine mining regulator cautious on nickel prices – by Erik dela Cruz (Reuters U.S. – April 27, 2015)

http://www.reuters.com/

MANILA – (Reuters) – The Philippines’ mining industry regulator said on Monday two new nickel mines would help boost production of the country’s top metal export this year, but prices may remain weak amid tepid demand from top consumer China.

The Southeast Asian country was last year’s biggest nickel ore supplier to China’s producers of nickel pig iron, used in stainless steel production, after previous top supplier Indonesia banned exports of unprocessed metallic minerals.

Leo Jasareno, director of the Mines and Geosciences Bureau (MGB), said nickel output this year should rise with the entry of the Libjo and Agata mines in the south.

“These new nickel mining projects are expected to boost the 2015 nickel production of the country, with the expected mine output of Libjo and Agata about 714,000 dry metric tons and 1,360,000 dry metric tons respectively,” he said in a statement.

Average nickel prices rose 11.6 percent last year to $7.56 per pound, boosting the value of the country’s overall metallic output to a record high 137.53 billion pesos ($3.1 billion), MGB data released on Monday showed.

Read more

Recent Trends in Cuba’s Mining and Petroleum Industries (United States Geological Survey – April 2015)

http://www.usgs.gov/

On December 17, 2014, President Obama announced that the United States would begin discussions to restore diplomatic relations with the Government of Cuba and embark on a longer term process of normalization of relations between the two countries.

The U.S. Government had officially severed diplomatic relations with Cuba in 1961 in response to political
changes after the Cuban Revolution. In 1962, President Kennedy declared an embargo on all trade between the United States and Cuba, which was implemented through regulations published in 1963.

On January 15, 2015, the U.S. Departments of Commerce and the Treasury published regulatory amendments to the Cuba sanctions (U.S. Department of the Treasury, 2015) in accordance with President Obama’s December 2014 policy announcement (The White House, 2014). These measures made changes in the implementation of the embargo but did not lift the embargo.

Most transactions involving Cuba, including private and public investment in mineral production, continue to be prohibited. This Fact Sheet provides information regarding the current supply of and demand for mineral commodities produced in Cuba (fig.1).

Read more

Nickel miner TVI may delay Philippine IPO due to weak metal prices – by Erik dela Cruz (Reuters U.S. – April 17, 2015)

http://www.reuters.com/

Manila – (Reuters) – TVI Resources Development Phils. Inc (TVIRD), a Philippine nickel miner partly owned by Canada’s TVI Pacific Inc, may push back a planned initial public offering to next year if metal prices remain depressed, its chairman said on Friday.

After a sterling performance in 2014, shares in Philippine nickel miners have fallen this year because of a slump in metal prices and an economic slowdown in China. Shares in top producer and exporter Nickel Asia Corp have lost nearly 39 percent.

“The target is to list in the fourth quarter. But right now I would not be recommending to the board that we do it,” TVIRD Chairman Clifford James told reporters after speaking at an industry forum. “When market conditions are good, that’s when we’ll list.”

In October, TVIRD began nickel ore exports from its newly developed Agata mine in Surigao province in southern Philippines, a major nickel-producing region supplying ore to processing plants in Australia, China, South Korea and Japan.

Last year the Southeast Asian country became the biggest ore supplier to China’s producers of nickel pig iron, which is used in stainless steel production, after Indonesia banned exports of unprocessed metallic minerals.

Read more

Vale sets aside $185m to finance expansion – by Tama Salim (Jakarta Post – April 1 2015)

http://www.thejakartapost.com/

Publicly listed nickel mine operator PT Vale Indonesia (INCO) will allocate up to US$185 million in capital expenditures (capex) this year to finance expansion projects, including the construction of new refining facilities. The company’s chief financial officer, Febriany Eddy, said on Tuesday the allocated sum was significantly higher than last year’s capital spending realization of $76.8 million.

She said that Vale would be gearing up for the second phase of its ore processing and refining facility in Sorowako, South Sulawesi, as well as operations in Bahodopi, Central Sulawesi. “Phase 1 is currently being concluded, so we’re starting to plan out the next phase while we await the licenses for expansion,” Febriany told reporters in South Jakarta, on Tuesday.

“If everything goes according to plan, we can realize all our capital spending and put our projects into motion.” Vale’s capital expenditure for 2014 was 51 percent lower than the $163 million target, because of delays in the issuance of required permits and the decision to further assess the rebuilding of an electric furnace.

On the other hand, stakeholder returns in 2014 were high as the firm reached a dividend payout ratio of 58 percent, equal to $50.2 million. Febriany argued that the high payout rate was in line with Vale’s previous actions, citing average dividend payments of more than 50 percent in the last five years.

Read more

Indonesia attracts $1.4 bln in investment for 11 nickel smelters – by Wilda Asmarini (Reuters U.S. – March 11, 2015)

http://www.reuters.com/

JAKARTA – (Reuters) – Eleven new nickel smelters are to be built in Indonesia over the next two years at a cost of $1.4 billion, a mining ministry official said, a sign that laws requiring domestic processing of ores are having an impact after initial resistance from the industry.

Early last year, Jakarta put in place export restrictions aimed at forcing mining firms to develop smelting and processing facilities so that Indonesia could refine all of its raw ores and concentrates.

Most of the six new nickel smelters due to be finished in 2015 are located in Sulawesi, Coal and Minerals Director General Sukhyar told reporters late on Tuesday. They involve a combined investment of $920 million and will have capacity to produce 6,000 tonnes of refined nickel a year plus 66,000 tonnes of ferro nickel and 50,000 tonnes of nickel pig iron.

Another five nickel smelters set for completion in 2016 are all in Sulawesi, Indonesia’s main nickel ore region, and will cost about $468 million in total, Sukhyar added.

“We estimate that if all these nickel smelters are completed, in 2018 we will be able to process 30 million tonnes of nickel ore – 50 percent of our nickel ore exports in 2013,” he said, referring to exports before the January 2014 ban.

Read more

New Caledonia: Nickel – Market Insights – by Robert Trzebski (Australian Mining – Febraury 26, 2015)

http://www.miningaustralia.com.au/home

There are currently three key players in the nickel sector over in New Caledonia. French-owned ERAMET has been present in the country for over 120 years now and operate mines in New Caledonia through their subsidiary, SLN (Société Le Nickel).

They have in total five operations, which are mostly concentrated in the centre of the island at Kouaoua, Thio, Nepoui, and Tiebaghi, not to mention the biggest nickel processing plant in the world, Doniambo.
Vale are the second big player in town, and have the formidable Goro Nickel project under their ownership.

This mine is located in the South of the island. It began operations in August 2010, with over 55 million tonnes of estimated mineral reserve.

Estimated annual production is around 60,000 tonnes of nickel and 5,000 tonnes of cobalt. This is an open pit operation with a processing plant on site. The third and final significant player is SMSP in joint ownership with Glencore Nickel.

The Koniambo mine started open cut operations two years ago in the north of the country, again with a processing plant on site. Koniambo will be an important contributor to New Caledonia’s mining future, being a high-grade nickel deposit of 6.1 Mt of contained nickel that has a current forecast of 25 years of operations.

Read more

INTERVIEW-Vale’s CEO rules out nickel IPO, writedowns – by Stephen Eisenhammer and Marta Nogueira (Reuters U.K. – February 11, 2015)

http://uk.reuters.com/

Feb 10 (Reuters) – Vale’s chief executive said on Tuesday that a possible initial public offer of part of its nickel division was off the cards for now due to low prices for the commodity, but that other asset sales could be expected over the coming year.

The Brazilian miner is under pressure to resolve a cash-flow squeeze this year as it wrestles to fund mega-projects in the midst of a price slump in its core product: iron ore. But Chief Executive Murilo Ferreira said that the option of spinning off part of its base metals division, which had been outlined in December, was no longer attractive.

“We’re not going to sell it on the cheap … You can forget that possibility,” Ferreira said in an interview at the Rio de Janeiro offices of the world’s largest iron ore producer.

He added that a sale of the entire division was not being considered, and dismissed reports that former Xstrata CEO Mick Davis might be looking to buy it through his startup, X2. “It has been at least two years since I have seen our friend Mick Davis,” he said.

Cash will be raised through other means and Ferreira said the market could expect an announcement of some form of divestment in March and another in the second half of the year. He did not elaborate.

Read more