Twitter

Nickel Laterites

UPDATE 2-Eramet delays Indonesia mine, backs ban to help nickel – by Gus Trompiz (Reuters India – February 21, 2014)

http://in.reuters.com/

PARIS, Feb 21 (Reuters) – French mining and metals company Eramet postponed its flagship nickel mine project in Indonesia on Friday citing depressed prices which it said would find support from the country’s ban on unrefined mineral exports.

Benchmark prices of nickel, mainly used in stainless steel, languished at four-year lows for much of 2013 due to global oversupply, leaving many producers operating at a loss.

Indonesia, the world’s largest exporter of nickel ore, last month went ahead with a ban on shipments of unrefined metals, including the ore, boosting international prices on prospects that the global surplus would be curbed.

“We hope that this ban is going to be kept firmly in place,” chairman and chief executive Patrick Buffet said at a presentation of Eramet’s 2013 results.

“This is the factor that could bring a recovery in the nickel market within a reasonable period.” Uncertainty over policy ahead of parliamentary and presidential elections this year had contributed to Eramet’s decision to delay a final investment decision on the Weda Bay mining project, Buffet said.

Read more

Vale Indonesia Targeting $112m in Profit, May Reduce Land Concession by Up to 44% – by Tito Summa Siahaan (Jakarta Globe – February 12, 2014)

http://www.thejakartaglobe.com/

Jakarta. Vale Indonesia, the country’s largest nickel producer, has set its net income target at $112 million this year, according to a document presented during a hearing with members of the House of Representatives Commission VII overseeing mineral affairs.

The local outfit of Brazil’s Vale targets production of 79,691 metric tons of nickel matte this year, a slight increase from last year’s target of 79,500 tons, which is set to be missed due to operational disruption in the fourth quarter, the document showed.

“We expect to book sales of $1 billion, assuming that the price at the London Metal Exchange averaged $16,000,” Vale Indonesia president director Nico Kanter said at the parliament building.

The company may have missed its target of $213.6 million in net income last year due to a sharp decline in nickel prices, according to Nico.

The average nickel price for last year was $15,000, down from an average of $17,374 in 2012. He said the price of nickel is projected to recover this year thanks to the government’s decision to ban exports of unprocessed nickel ore, but trends for the first few months still showed price fluctuations.

Read more

Royal Nickel Corp: Indonesian Ore Export Ban Opens Door to the Next Generation of Nickel Mines (The Gold Report – February 11, 2014)

http://www.theaureport.com/

DISCLOSURE: Royal Nickel Corp. paid The Mining Report to conduct, produce and distribute the following interview. 

Nickel prices have been weak, but the recent Indonesian government announcement banning ore shipments outside the country may be the shock that reverses the trend. In this interview with The Mining Report, Mark Selby, senior vice president of business development for Royal Nickel Corp., walks through his analysis that indicates nickel price increases and inventory reductions are imminent, while demand continues to grow and over a quarter of global mine supply is shut in.

He considers nickel in 2014 one of the best commodity trades in a generation. To capitalize on this unique set of circumstances, Royal Nickel’s Dumont Nickel Project follows the path of other large-reserve, large-scale mines in the copper and gold sectors that have changed the mining industry and made early investors fortunes.

The Mining Report: The nickel industry has been through tectonic changes in the last 10 years, including large corporate takeovers and fundamental changes in supply available to the market. Can you summarize where the nickel industry has been and where it is going?

Mark Selby: Over the past five years, we’ve seen continued robust growth in nickel demand. Over that period, global nickel demand grew in the high single-digits, while Chinese nickel demand grew at double-digit rates.

Read more

Cuba to cut nickel plant output for major overhaul (Reuters U.S. – February 3, 2014)

http://www.reuters.com/

Feb 3 (Reuters) – Cuba will reduce production at one of its two nickel plants this year so it can carry out maintenance and capital improvements to make the plant competitive at low international prices.

A report on the evening government newscast on Sunday said the Ernesto Che Guevara processing facility in eastern Holguin province would be given a major overhaul.

The state-owned plant, built with Soviet technology and opened in 1986, has a capacity of about 30,000 tonnes of unrefined nickel plus cobalt a year at a cost of more than $12,000 a tonne.

Spot nickel prices on the London Metals Exchange opened at $13,695 a tonne on Monday. The broadcast quoted the plant’s head of maintenance as saying it would be the biggest overhaul in the plant’s 28-year history and that workers face the challenge of producing 14,700 tonnes of unrefined nickel plus cobalt while it is taking place.

Read more

Antam and Vale Receive Green Light on Processed Mineral Exports – by Rangga Prakoso (Jakarta Globe – January 27, 2014)

http://www.thejakartaglobe.com/

Antam and Vale Indonesia — two of the biggest nickel producers in the country — have secured a recommendation letter to export their processed mineral products, almost two weeks after the government enforced a ban on ore shipments.

“Vale and Antam don’t have any problems. The others simply have not submitted their respective proposals to the government, which is why I am calling on other miners to do so,” said Susilo Siswoutomo, vice minister at the Energy and Mineral Resources Ministry, on Friday.

Susilo said the government has given Antam approval to export around 17,000 metric tons of ferronickel annually, while Vale is allowed 75,000 tons of nickel matte per year. He did not say whether Antam will be allowed to export its nickel ore.

The vice minister also confirmed the government’s intention to set a “maximum production limit” for minerals to ensure that newly-built smelters in Indonesia can be fed with adequate resources.

Read more

Jakarta mired deep in mining mess – by John McBeth (The Straits Times/Jakarta Post – January 20, 2014)

http://www.thejakartapost.com/

Giving with one hand and taking with the other, the Indonesian government has effectively enforced a blanket ban on mineral ore exports in a bizarre, nationalist-driven decision-making process that will cost the country billions and put tens of thousands out of work.

While value-added is an understandable goal for a country blessed with so many natural resources, the implementation of the signature policy has been bedevilled by weak leadership, poor conceptualising, political grandstanding and bureaucratic ineptitude.

Miners are now threatening to head to international arbitration, with copper giants Freeport Indonesia and Newmont Nusa Tenggara facing the prospect of shutting down 65 per cent of their production – a huge chunk of the US$10 billion Indonesia makes each year from mineral exports.

The move to process all mineral ore onshore within five years was foreshadowed in the 2009 Mining Law, but only given clarity – and teeth – in a ministerial regulation issued belatedly in July 2012, which laid out the required purity levels for each individual mineral.

Read more

Mining in Indonesia: Smeltdown (The Economist – January 18, 2014)

 http://www.economist.com/

The government risks an export slump to boost the metals-processing industry

JAKARTA – INDONESIA’S government concedes that it will cause short-term damage; but on January 12th it went ahead and banned exports of mineral ores, at last implementing a law passed in 2009. Officials say that forcing mining firms to export only processed minerals will attract investment in smelters and refineries. After a year or so this will start to add value to the country’s exports, they say. But it is quite a gamble.

Indonesia has few smelters, and earns $5 billion a year by exporting unprocessed minerals such as copper concentrate, nickel ores and bauxite. The mining ministry had admitted that an outright ban on ore shipments would cut exports by $4 billion this year and $2.5 billion next. With the country’s current-account deficit last year hitting 3.5% of GDP, its worst since 1986, and its currency falling steeply, this is a bad time to be forgoing foreign earnings.

This may explain why the president, Susilo Bambang Yudhoyono, relaxed the moratorium at the last moment to let big copper producers keep exporting concentrate. (They will, however, have to pay stiff export taxes, rising from 25% this year to 60% in 2016.)

Read more

Canadian nickel producers hope to benefit from Indonesia’s export ban – by Rachelle Younglai (Globe and Mail – January 17, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Indonesia’s ban on raw mineral exports has the potential to rejuvenate a nickel industry that is suffering from a plunge in metal prices.

The ban, which started on Sunday, has pushed nickel prices up on fears that there will be a shortage of the silvery white metal used to make stainless steel. That would help Canadian producers Sherritt International Corp., Lundin Mining Corp. and First Quantum Minerals Ltd.

Toronto-based Sherritt, which runs the Moa nickel mine in Cuba and is developing a giant nickel mine in Madagascar, could see benefits immediately. “Any improvement in the nickel prices will go straight to our revenue,” said Sherritt’s chief executive officer David Pathe.

Shares of Sherritt and other producers gained about 5 per cent on Thursday. Shares of tiny Canadian nickel companies First Nickel Inc. and Royal Nickel Corp. also made gains.

Although nickel is trading at two-month highs of $6.50 (U.S.) a pound, the metal is down 70 per cent from its record high of $24 reached in 2007 when supplies were scarce.

Read more

Indonesia to China: Stop Buying Our Stuff – by Bruce Einhorn, Yoga Rusmana, and Eko Listiyorini (Bloomberg News – January 13, 2014)

http://www.businessweek.com/

Indonesian mines account for about 20 percent of the world’s nickel supply and a hefty chunk of the bauxite (used to make aluminum). China has been importing ever-larger amounts of these and other minerals from its Asian neighbor. Ironically, the more the Chinese buy, the angrier Indonesians become: Rather than purchasing refined minerals from Indonesia, China imports the raw rocks and does the processing itself, thus depriving Indonesians of jobs and tax revenue.

Miners took more than 250,000 tons of nickel out of Indonesian mines last year but processed only about 16,000 tons in-country, exporting the rest. Meanwhile, China refined more than half a million tons.

To make matters worse, through much of last year, China stockpiled Indonesian ore to hedge against any action the government in Jakarta might take to encourage more of the value-added work to stay home. The stockpiling makes Indonesian officials even more irritated. “I just returned from China, and I saw with my own eyes there are 3 million tons of bauxite and 20 million tons of nickel over there,” Industry Minister M.S. Hidayat told reporters on Jan. 8. “That’s what we want to stop.”

Indonesian President Susilo Bambang Yudhoyono is taking action do just that.

Read more

Japan nickel users face higher costs, supply hunt after Indonesia ban – by Yuka Obayashi (Reuters U.S. – January 13, 2014)

http://www.reuters.com/

TOKYO – Jan 13 (Reuters) – Japan, home to some of the world’s biggest stainless steel producers, will face higher costs and a scramble to find new nickel supply after Indonesia enforced an export ban on the raw material.

Global nickel prices and mining shares rallied a day after Indonesia banned unprocessed exports of nickel and bauxite, in a move aimed at getting higher returns for its resources by forcing companies to refine the minerals on Indonesian soil.

The law was first announced in 2009 but only a handful of firms made the downstream investments needed, betting on Indonesia backing down on the policy. Jakarta tweaked its rules on Saturday to allow copper, zinc, lead, manganese and iron ore concentrate shipments to continue.

Japan’s biggest nickel smelter, Sumitomo Metal Mining Co Ltd (SCM), said it had enough nickel ore to maintain its current production level of ferro-nickel only till May.

Read more

Philippines Sees Nickel Boon on Indonesia’s Ban: Southeast Asia – by Cecilia Yap (Bloomberg News – January 13, 2014)

http://www.bloomberg.com/

The ban on mineral-ore exports from Indonesia, the world’s biggest nickel producer, is poised to benefit neighboring miners in the Philippines, which are predicting an increase in sales. Shares of Nickel Asia (NIKL) Corp. advanced to the highest level since July.

The ban is positive as demand and prices for Philippine supplies will increase, according to Emmanuel Samson, chief financial officer at Nickel Asia. The Taguig City-based company accounts for about a third of Philippine output, Samson said in a telephone interview.

While the Indonesian ban is intended to encourage local processing and boost the value of commodity shipments from Southeast’s Asia’s largest economy, the curbs may hand an advantage to rival producers such as Nickel Asia. Buyers in China, the top user, stockpiled ore before the ban and it may take as long as six months to work off that extra inventory, according to Samson. Producers in China also need to adjust to the lower grade of ore that comes from the Philippines, he said.

“If they do that, it would be very easy for us to ramp up production,” Samson said in an interview Jan. 9. “We think the increase is not going to be until such time that the inventory level will come down,” he said, referring to prices.

Refined-nickel futures jumped as much as 2.4 percent to $14,190 a ton today on the London Metal Exchange, the highest level in two weeks, on concern supplies will be reduced.

Read more

UPDATE 4-Indonesia export ban leaves mining in turmoil, nickel prices rally – by Wilda Asmarini and Michael Taylor (Reuters India – January 13, 2014)

http://in.reuters.com/

JAKARTA, Jan 13 (Reuters) – Indonesia’s mining sector was left in turmoil on Monday after the government pushed through a controversial ban on exporting unprocessed mineral exports.

Global nickel prices and mining shares rallied in the first trading day after the ban in the world’s top nickel ore exporter. The ban on a range of mineral ores took effect on Sunday, five years after a law was passed to force miners to build processing plants. The government provided a last-minute reprieve for exporters to keep shipping some minerals, although U.S. miner Freeport McMoRan Copper & Gold was waiting for confirmation so that it could continue to ship copper.

The policy aims to reduce reliance on raw material exports, but many firms failed to invest in enough smelter capacity to process all of Indonesia’s mining output — meaning that a total ban would have forced extensive shut downs of output and cost the economy billions of dollars.

Late changes approved by President Susilo Bambang Yudhoyono — to ease any short-term economic pain — should allow copper exports by Freeport and Newmont Mining Corp.

Read more

Indonesia’s ban on raw minerals exports threatens nickel shake-up – by Melanie Burton (Reuters U.S. – January 10, 2014)

http://www.reuters.com/

SYDNEY – Jan 10 (Reuters) – An Indonesian ban on raw minerals exports is set to hurt Chinese factories making stainless steel – used in everything from kitchenware to cars and buildings – in the biggest potential industry shake-up in more than five years.

The ban, due to come in force on Sunday, may also be a boon for battered nickel miners, dogged by prices that lost 19 percent last year and are sitting stubbornly near four-year lows.

Indonesia looks set to prohibit more than $2 billion worth of annual nickel ore and bauxite shipments as part of a plan to push miners into downstream processing and boost long-term returns from its mineral wealth.

The Southeast Asian country supplies about half the nickel ore used for stainless steel in China, the world’s biggest producer and exporter of the corrosion resistant material.

China mostly produces a lesser quality version, unlike high-end competitors in Japan, Germany and Korea, which is often used in the inside of buildings or internally in cars, where it reinforces framework.

Read more

COLUMN-Uncertainty the only certainty with Indonesia mineral export ban – by Clyde Russell (Reuters India – January 9, 2014)

http://in.reuters.com/

Jan 9 (Reuters) – The key point with any laws or regulations is not that they are on the statute book, it’s whether they are applied and enforced, and this will be the case with Indonesia’s ban on metal ore exports.

As is often the case with Indonesia and government policy, the only certainty is uncertainty and whether the prohibition on exporting unrefined ores goes ahead, and in what form, is far from clear.

In the case that the ban goes ahead as planned from Jan. 12, it seems likely that nickel ore and bauxite, with a value of up to an annual $2 billion will be the hardest hit. Indonesia is the world’s biggest exporter of nickel ore and supplies about two-thirds of top buyer China’s imported bauxite.

But Indonesia’s mining ministry is seeking to pass regulations to ease the ban and phase in the requirements for domestic processing over a longer period of time. The proposal recommends that raw mineral ores can be exported until 2017, after which all would have to undergo domestic processing.

Read more

UPDATE 3-Indonesia’s mining ministry looks to ease mineral export ban – by Wilda Asmarini and Fergus Jensen (Reuters U.S. – January 8, 2014)

http://www.reuters.com/

Jan 8 (Reuters) – Indonesia’s mining ministry sought to ease a controversial mineral export ban before its Sunday deadline, but still looked set to prohibit more than $2 billion worth of annual nickel ore and bauxite shipments.

Indonesian government officials are scrambling to pass regulations to ease a ban on unprocessed mineral ore exports from Jan. 12.

The ban aims to boost Indonesia’s long-term return from its mineral wealth, but officials fear a short-term cut in foreign revenue could widen the current account deficit, which has undermined investor confidence and battered the rupiah.

“The (mining) ministry proposed that miners will be given flexibility to export concentrate or processed minerals until 2017,” Sukhyar, director general of coal and minerals at the ministry, told reporters.

“After 2017, they will only be allowed to export metal or refined mineral,” he said. The mineral ban is one of Indonesian President Susilo Bambang Yudhoyono’s biggest economic policy moves in his nearly 10 years in office.

Read more