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Nickel Laterites

COLUMN-Nickel’s bull story; just a simple matter of timing? – by Andy Home (Reuters U.S. – February 10, 2015)

http://www.reuters.com/

Feb 10 (Reuters) – Good things, they say, come to those that wait. Just ask a nickel bull.

The nickel market went on a super-charged rally over the first half of last year, the benchmark London Metal Exchange (LME) three-month price racing up from below $15,000 per tonne to a May high of $21,625.

The trigger was the well-flagged but widely unexpected decision by the Indonesian government to ban the export of unprocessed minerals in January. At the stroke of a presidential pen, China’s massive nickel pig iron (NPI) sector lost its main source of feed.

Great expectations, however, were dashed by reality, specifically a compensatory surge in nickel ore supply from the Philippines.

The subsequent price collapse was as spectacular as the original rally. And here we are again, the London nickel market kicking its heels around the $15,000 level.

But the bull story hasn’t gone away. It has merely been postponed. Nickel is still metal analysts’ favoured upside pick over a two-year time horizon.

So, will this be nickel’s year (again)? Possibly, but there are many moving parts to this bull story and at its core lies one of the least transparent parts of the global industry.

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Sumitomo sees first nickel deficit in 5 years – by Aya Takada & Ichiro Suzuki (Mineweb.com/Bloomberg – February 2, 2015)

http://www.mineweb.com/

Demand will exceed production by 12,000 metric tons, compared with a 36,000-ton surplus last year. Sumitomo Metal Mining Co., Japan’s biggest nickel producer, expects global output of the metal to fall short of demand in 2015 for the first time in five years as supply from China drops.

Demand will exceed production by 12,000 metric tons, compared with a 36,000-ton surplus last year, according to Hiroshi Sueta, general manager at the Tokyo-based company’s nickel sales and raw materials department. China’s production of nickel pig iron, a cheaper alternative to the refined metal, may drop 15 percent from a year earlier to 365,000 tons, he said.

“Ore stockpiled in China will be probably exhausted by around the middle of this year,” Sueta said in a Jan. 30 interview in Tokyo. “They must review their NPI production for the latter half of this year.”

The forecast deficit represents 0.6 percent of global nickel production this year, and will help London Metal Exchange prices stabilize above the current level, he said. Output is forecast to expand 1.5 percent to 1.99 million tons.

Nickel advanced 9 percent last year, the most among the six main metals on the LME, as Indonesia, the world’s biggest producer from mines, barred unprocessed ore exports in January. The metal for delivery in three months on the LME rose 1.8 percent to $15,165 a ton on Jan. 30.

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Sherritt CEO Says Cuba Holds Promise for the Patient – by Liezel Hill (Bloomberg News – January 27, 2015)

http://www.bloomberg.com/

The head of Sherritt International Corp. (S), the biggest foreign investor in Cuba, said industries from mining to infrastructure are ripe for development as the island nation moves tentatively to open up trade with the U.S.

The Toronto-based company, which has been mining nickel in Cuba for two decades and generates about 75 percent of its revenue there, has talked to the government about possible new investments in Cuba over the longer term, Chief Executive Officer David Pathe said.

“There’s huge opportunities for infrastructure in Cuba,” Pathe said in an interview in Bloomberg’s Toronto office. “There’s still a big power-generating deficit in Cuba, and there are other resource opportunities.”

U.S. and Cuban diplomats concluded what both sides called encouraging talks last week on restoring ties after the two countries unexpectedly said last month they would begin steps to normalize relations after a half century of U.S. trade and travel restrictions.

There are other ore bodies and “quite vast” nickel reserves on the eastern end of the island where Sherritt has been operating, and the Cuban government has indicated it’s interested in foreign investment in mining, Pathe said.

“We’ve talked to them about things that we might be able to do there over the longer term,” he said. “There could be more interest from international companies.”

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China’s Virtue Dragon to Invest $5b in SE Sulawesi Ferronickel Smelter – by Ridho Syukra (Jakarta Globe – January 12, 2015)

http://thejakartaglobe.beritasatu.com/

Jakarta. A Chinese ferronickel producer, Virtue Dragon Nickel Industry, plans to invest up to $5 billion in Konawe industrial estate in Southeast Sulawesi province to build a nickel smelter and supporting infrastructure including a power plant and a port, its president director said on Friday.

Speaking to reporters at the Industry Ministry’s headquarters in Jakarta, Andrew Zhu, president director of the Chinese company, said the smelter is set to occupy a total of 500 hectares.

Zhu elaborated that the smelter development would involve three phases. First, it will develop a smelter with a maximum production capacity of 600,000 tons per year on an area of 100 hectares. This phase is expected to be completed by the end of this year.

In the second phase, Virtue Dragon will expand its land area to 200 hectares and double the production capacity to 1.2 million tons per year. This phase is scheduled to be completed by the end of 2017.

Lastly, it will expand the land area to 500 hectares and ramp production to 3 million tons per year. This phase is expected to be concluded in 2019. Zhu said the ferronickel produced will be sold to both Indonesia and China. Meanwhile Zhu said the smelter would be supported by a 335 megawatt power plant and a port.

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Nickel Shortage Propels Philippines Mining Boom: Southeast Asia – by Ian Sayson (Bloomberg News – December 21, 2014)

http://www.businessweek.com/

Michael Defensor is racing to mine and ship nickel from projects across the Philippines to plug the gap in global supplies left by Indonesia’s ore-export curbs.

“Indonesia’s ban affected us positively,” said Defensor, chairman of Pax Libera Mining Inc. and the nation’s environment secretary from 2004 to 2006. He’s preparing four new sites for next year after opening two in the past two years. “We will maximize this window and ship as much as we can.”

The Indonesian curbs, designed to promote local processing, started in January and were upheld in court this month. The ban initially drove prices to a two-year high in May, before larger-than expected Philippine exports and slowing Chinese growth reversed the rally. Citigroup Inc. says it’s still bullish on nickel because the country won’t be able to expand supply much more and a global shortage will emerge.

Futures on the London Metal Exchange, the global benchmark for the metal used to make stainless steel, traded at $15,550 a metric ton on Dec. 19, from this year’s high of $21,625 in May. The price is still 12 percent higher for the year, making nickel the best performing industrial metal on the LME.

“Everyone will try to max out their permit,” said Ramon Adviento, a mining analyst at Maybank ATR Kim Eng Securities in Manila. “The low-hanging fruit has already been harvested even before the ban, so there is probability that the Philippines won’t meet the gap” left by Indonesia, he said.

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UPDATE 1-Miner Sherritt says U.S. exports possible if Cuba embargo lifts – by Narottam Medhora (Reuters U.S. – December 17, 2014)

http://www.reuters.com/

Dec 17 (Reuters) – The United States move to normalize relations with Cuba could pave the way for Sherritt International Corp to export nickel and cobalt to one of the biggest markets in the world, the miner’s Chief Executive David Pathe told Reuters.

Sherritt shares jumped as much as 36 percent on Wednesday after President Barack Obama moved to thaw a five-decade freeze in relations between the two countries and said he would speak to the U.S. Congress about lifting the U.S. embargo on Cuba.
Toronto-based Sherritt is the largest independent natural resources company in Cuba and operates the Moa nickel mine in the eastern part of the Caribbean island state.

Due to the Cuban origin of its nickel and cobalt, the company is currently unable export to the United States, even though the metals are refined in western Canada.

“If the embargo were to be lifted, we could export some of that nickel and cobalt into the U.S. market, which is obviously one of the biggest markets in the world,” CEO Pathe said in an interview.

“It would also give us access to U.S. suppliers for mining equipment and supplies and services for our oil and gas industries.”

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Venezuela restarts nickel output at asset taken over from Anglo – by Silvia Antonioli (Reuters U.K. December 17, 2014)

https://uk.finance.yahoo.com/

LONDON, Dec (Shanghai: 600875.SS – news) 17 (Reuters) – Venezuela has restarted production from the Loma de Niquel ferronickel asset it took from mining giant Anglo American (LSE: AAL.L – news) in 2012 after cancelling its licenses, data from an industry body showed this week.

Information on Venezuela is patchy but the International Nickel Study Group (INSG) numbers indicated that the country produced 2,700 tonnes of nickel in the first 10 months of this year, after producing nothing in 2013.

Loma de Niquel is Venezuela’s sole nickel producing asset. At full capacity it would produce almost 1 percent of the world’s nickel output.

Diversified miner Anglo had a 91.4 percent stake in Loma de Niquel until 2012, when the Venezuelan government under late president Hugo Chavez cancelled 13 of its concessions and refused to renew three others, forcing the company to abandon its operations in the country.

Nickel production from Venezuela fell from 8,100 tonnes in 2012 to nothing in 2013. In 2011 it had produced over 14,000 tonnes.

The data shows that production resumed at a rate of 200 tonnes per month in January and increased to 300 tonnes per month from April.

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Nickel Rises Most in Three Weeks as Indonesia Adheres to Ore Ban – by Debarati Roy and Laura Clarke (Boomberg News – November 19, 2014)

http://www.bloomberg.com/

Nickel prices rose the most in three weeks after Indonesia said a ban on exports of unprocessed ore remains in place, reinforcing concern that global demand is set to exceed supplies.

Today, Bambang Adi Winarso, senior adviser to the coordinating minister for economic affairs, affirmed the policy by Indonesia, the world’s largest producer of mined nickel ore. Residential-construction permits in the U.S. climbed in October to a six-year high, the government said. Copper, aluminum and lead prices rose.

“Strong U.S. data, combined with supply concerns from Indonesia, is pulling nickel higher,” Tim Evans, the chief market strategist at Long Leaf Trading Group, Inc. in Chicago, said in a telephone interview. “We are seeing some buying across base metals.”

Nickel for delivery in three months on the London Metal Exchange advanced 3.2 percent to $16,149 a metric ton at 4:50 p.m. A close at that price would mark the biggest jump since Oct. 28. Through yesterday, the commodity rose 13 percent this year.

Citigroup Inc. yesterday forecast a global deficit of 62,400 tons in 2015, expanding to 103,600 tons in the following year. “Inventories of nickel in all its various forms have fallen in China, with supply now falling as well in the form of a seasonal decline in Filipino exports,” the bank said. “Optimism remains strong toward nickel prices for 2015.”

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NEWS RELEASE: French President Hollande inaugurates Koniambo Nickel

Baar, Switzerland / Kone, New Caledonia

17 November, 2014 – Glencore is pleased to announce that today French President, François Hollande officially inaugurated the Koniambo Nickel Project (Koniambo) in New Caledonia, a joint venture between Société Minière du Sud Pacifique (SMSP) and Glencore.

President Hollande was joined by Paul Néaoutyine, President of the North Province, Ivan Glasenberg, CEO of Glencore, André Dang, President of SMSP, Peter Hancock, President of Koniambo Nickel, and Vincent Bouvier, French High Commissioner in New Caledonia.

The construction of Koniambo Nickel commenced in 2007 and represents a $7 billion investment in New Caledonia, majority financed by Glencore. Its state-of-the-art infrastructure and proven nickel smelting technology, along with a world-class ore body, makes Koniambo a leading player in the global nickel market and is transformative for New Caledonia’s nickel industry. At peak production, the mine will provide steady employment for approximately 950 workers, with a focus on local employment, and indirect employment for thousands of others.

Ivan Glasenberg, CEO of Glencore, commented:

“We are honoured that the French President has recognized Glencore’s ongoing commitment to and investment in New Caledonia by officially opening Koniambo Nickel. This inauguration marks a milestone for our New Caledonian operations and for the country’s nickel industry. We look forward to continuing our well established collaborations with the local community, government and our joint venture partners as we continue the ramp up period to nameplate capacity of 60ktpa.”

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Toronto mining company Sherritt to sell head office – by Lisa Wright (Toronto Star – October 30, 2014)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Toronto-based mining company Sherritt International Inc. says it’s cutting the size of its head office workforce by 25 per cent and preparing to sell its Toronto office building.

Amid tumbling commodity prices, Sherritt International Inc. has begun a major restructuring that includes cutting its workforce by 10 per cent and the sale of its head office in Toronto, which will affect one-quarter of its staff.

The downsizing and real estate sales, including the Yonge St.-Summerhill Ave. headquarters and the technology division offices in Fort Saskatchewan, are expected to save the miner $10 million annually, said chief executive David Pathe Wednesday after releasing its third-quarter earnings.

The financial results included a net loss of $51.3 million from continuing operations in the three months ended Sept. 30 compared with a profit of $1.1 million a year earlier, before Sherritt sold its coal operations in Western Canada.

“It feels like the bottom of a bear market. And what are the signposts? Layoffs are one,” said veteran mining industry analyst Barry Allan of Mackie Research Capital Corp.

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New nickel laterite processing method could halve processing costs and ‘revolutionise’ industry – by Tara de Landgrafft (Australia Broadcasting Corporation Rural – October 16, 2014)

http://www.abc.net.au/news/rural/

The company behind a new method of extracting ore from nickel laterite deposits expects the process to revolutionise the nickel industry.

Direct Nickel, the company responsible for inventing the new processing method, believes it will cut production costs in half. Nickel latertite is used to strengthen metals such as stainless steel.

Due to its lower grade and its distribution across large areas, it is traditionally quite expensive to extract. Almost three-quarters of the world’s nickel deposits are nickel sulphide and up to a third of those are based in Australia.

Conventional extraction uses sulphuric acid in the treatment plant, however Direct Nickel’s technology uses the lower cost and, the company claims, a more environmentally friendly Nitric acid instead.

Technical director Graham Brock says it’s breakthrough technology. He says treatment plants are expected to cost around half that of current HPAL processors and treatment costs would be around $2 to $3 a pound. “[That’s] probably about half or less the capital and about half the operating costs,” he said.

“So we see this very much as breakthrough technology that will in fact change the way nickel laterites are treated.”

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Monsoon to curb Philippines nickel mining, hurt China supply – by Erik dela Cruz and Melanie Burton (Reuters India – October 14, 2014)

http://in.reuters.com/

Manila – Oct 14 (Reuters) – Seasonal rains are set to disrupt nickel mining in the Philippines for the next four months or so, crimping exports to top buyer China and stoking a shortfall in the global supply of ore.

Miners in the Philippines say they will be able to fulfil their 2014 contracts as they have factored in the impact of the annual monsoon.

But, with a ban on raw metal shipments by former top exporter Indonesia, the seasonal decline in the Philippines’ output could force China’s vast stainless steel industry to run down its stocks of nickel ore, reigniting a rally in nickel prices.

Most producers in the Philippines’ main nickel mining region of Caraga are expected to close operations as normal from October or November until early next year in anticipation of heavy rains. The Philippines has emerged as the top supplier to China’s producers of nickel pig iron, a key ingredient in stainless steel.

“They (China NPI makers) are definitely going to be caught short,” said Daniel Hynes, analyst at ANZ in Sydney. “Obviously they’ll just have to dig into their inventory to meet demand in the shorter term or look at importing some ferronickel from various sources.”

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New Caledonian, Chinese companies plan Vanuatu nickel partnership – by James Regan and Cecile Lefort (Reuters India – September 30, 2014)

http://in.reuters.com/

SYDNEY, Sept 30 (Reuters) – The South Pacific islands of New Caledonia and Vanuatu are studying a plan to jointly mine and process nickel ores into refined metal to help produce stainless steel in China.

The acting prime minister of Vanuatu, Ham Lini, has expressed interest in the proposal and has asked the partners to lodge a formal application to construct the smelter in his country.

The move comes as Chinese steel mills scour the Asia-Pacific region for alternative supplies of nickel after top supplier Indonesia imposed a ban on such exports in January.

Under the proposed partnership, New Caledonian company MKM Group and China’s Jin Pei Century Investment (Group) Co Ltd plan to mine low-purity nickel ore in the French Pacific territory and ship it to Santo in northern Vanuatu for smelting.

Media reports in New Caledonia said the project would be owned 51 percent by MKM and 49 percent by Jin Pei. The head of MKM, Wilfried Mai, told New Caledonian television he had advised the Chinese investors to build the plant in Vanuatu.

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Putting the Cuban nickel and cobalt resources back into its orbit – by Christopher Ecclestone (Investorintel.com – September 25, 2014)

http://investorintel.com/

To those with fertile imaginations Cuba conjures up images of rum and cigars, but even those remain forbidden fruit for US consumers as long as the troglodytic Helms-Burton Act remains extant. What also remains off-limits for the US industrial consumer is Cuban cobalt and nickel. I thought it timely to visit the theme of Cuba as it relates to US resource security, one of my recurring themes.

I should be remembered that the US has little, to no, Nickel or Cobalt resources of its own. In fact dusting off the history books one would see that the Moa Bay complex in Cuba was actually developed during the Second World War to plug the US supply gap in these two important metals. Ox-like stubbornness since 1960 by the US “powers that be” might have been justified up until 1989 but subsequent to that the US should have been thinking of its own best interests in getting the Cuban resources in these two metals back into its orbit. Instead it has let petty self-interest of the fallen Cuban oligarchs cut off its nose to spite its face.

Cuba has a history of mining extending over a period of three hundred years. Since 1900 mining has pretty much been a constant activity and, during WWII, the mining of manganese, some copper, and nickel/cobalt was most important.

Cuban mineral production is largely state-controlled, although the government has made steps to amend the mineral laws and legislation. In 1993, Geominera was formed as a private company that utilized state funds. Geominera’s focus is on gold and base metal exploration, whilst foreign investors are currently developing nickel/cobalt and gold resources. I even ran into a Cuban delegation at a London mining event recently and went away with a CD of Cuban salsa music for my troubles.

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REFILE-Axiom wins long battle to develop Solomons nickel – by James Regan (Reuters U.S. – September 24, 2014)

http://www.reuters.com/

SYDNEY, Sept 24 (Reuters) – Tiny Australian prospector Axiom Mining has won a three-year court battle against Japanese giant Sumitomo Metal Mining to exploit a major nickel discovery in the South Pacific’s Solomon Islands left idle for more than half a century.

Axiom says the ruling in the Solomon Islands High Court could lead to the nickel deposit, spanning the islands of San Jorge and Santa Isabel, finally being developed within two years, just as nickel prices soar due to an ore export ban by major supplier Indonesia in January.

“We can now re-commence our exploration of the tenement with our partners,” said Axiom’s Australian managing director Ryan Mount, who moved to the Solomon Islands to be close to the project.

Geologists have been aware of the Isabel deposit since 1957 but little development work has been done because of ownership changes and legal wrangling.

Analysts estimate the discovery compares in size or grade to other large South Pacific nickel mines, such as Vale SA’s Goro mine in New Caledonia and the China-owned Ramu mine in Papua New Guinea.

Axiom, along with the local Kolosori and Bungusule landowner groups, was granted a prospecting licence to explore the Isabel site in 2011, but were blocked by an injunction brought through a civil claim by Sumitomo.

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