Nickel Laterites – Page 54 – Republic of Mining

Sherritt CEO [Ian Delaney] reflects on 40 years in the capitalism game – by Jennifer Wells (Toronto Star – January 1, 2012)

January 2, 2012

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.

“You do understand it’s a lottery,” says the fired executive. “You know the whole damn thing’s a lottery.” The fired executive is talking about life, that damn thing, that single ticket you’re given. Punched once, you’re done. Adios.

So the executive, who enjoyed the benefits that come along with a multimillion-dollar salary and a chief executive officer’s title, up and fired himself four weeks ago, an act that has put him in the mood to reflect on the past 40 years playing the capitalism game.

It’s a good year for reflection.

The year the eurozone went to hell in a handbasket. The year of the Occupy movement. The year of economic foreboding. There’s 1 per cent. There’s 99 per cent. There’s one-tenth of 1 per cent. Like this guy. So.

Ian Delaney often reaches for small words and sprinkles them over the boardroom table as if they were full sentences.

Long-time Sherritt chief Ian Delaney to retire – by Brenda Bouw (Globe and Mail – November 25, 2011)

November 25, 2011

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.

Ian Delaney, the “Smiling Barracuda” of Bay Street who transformed Sherritt International Corp. into a multifaceted mining company with reaches into Cuba and Madagascar, is stepping down, again, as its CEO.

The 68-year-old business maverick, who still exchanges notes with Fidel Castro and shrugs off his ban from the United States, said he can comfortably relinquish the chief executive officer’s role now that his successors are primed to take over during what he sees as a prolonged period of market volatility.

“They are all firing on eight cylinders, they don’t need me,” Mr. Delaney said in an interview on Thursday after announcing his retirement effective at the end of the year, three years after being “drafted” back to the position. He will be replaced by chief financial officer David Pathe on Jan. 1.

The provocative former Merrill Lynch investment banker will remain as chairman of the diversified Toronto-based resources firm he won control over in a hostile proxy contest in 1990, turning it into Canada’s largest coal producer and the largest independent energy producer in Cuba.

HudBay sells Guatemala mine to stick to mining techniques it knows well – by Mary Gazze (The Canadian Press – August 8, 2011)

August 9, 2011

http://www.canadianbusiness.com/

TORONTO – HudBay Minerals Inc. (TSX:HBM) sold a promising nickel mine in Guatemala to focus on Canadian and Peruvian projects the company can develop using mining techniques it has been using for more than eight decades.

Analysts said Monday the sale was a long time coming because the Guatemala project had a different geology than HudBay’s other mines and prospects.’ “We have been expecting a sale of the project for some time – admittedly,” said TD Newcrest analyst Greg Barnes .

“We are somewhat pleasantly surprised that management was able to secure a price for the project that is very close to the value for the asset.” Late Friday, Toronto-based HudBay announced the sale of its 98 per cent stake in the Fenix project to global miner Solway Group for US$170 million.

Papua New Guinea [Ramu nickel laterite project] and China’s New Empire – by Geoffrey York (Globe and Mail – January 3, 2009)

June 16, 2011

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media. Please note that this article was orginally published January 3, 2009.

MADANG, Papua New Guinea

When Chinese engineers landed in Papua New Guinea in 2006 to inspect their latest mineral acquisition, they faced an arduous journey through the tropical wilderness. They drove over crumbling roads to the Ramu River, then found natives with dugout canoes to paddle them upstream. Next, they hired another team of locals with machetes to slash a rough trail for eight hours through the steamy jungle, dodging poisonous snakes and malaria-carrying mosquitoes.

“It was terrible,” recalls Wang Chun, the chief engineer. “You couldn’t breathe.”

Today, less than three years later, a series of small Chinatowns has emerged in the jungle — complete with Chinese food, Chinese satellite television channels and crews of Chinese migrant labourers living in cheap dormitory huts. Where once was wilderness, you find the workers of China Metallurgical Group Corp., toiling seven days a week and chattering about their families back home in Beijing and Sichuan.

It hasn’t been easy. The state-owned mining company has dealt with violent clashes with local landowners, striking workers, attacks from the media and unfriendly police who arrested more than 200 Chinese technicians on charges of illegally entering the country.

NEWS RELEASE: Sherritt Provides Revised Estimates for the Ambatovy [Nickel Laterite] Project

June 16, 2011

TORONTO, June 14, 2011 – Sherritt International Corporation (TSX: S) today announced, following completion of a review of the estimated schedule and associated capital cost of the Ambatovy Project, that the Board of Directors has approved a revised schedule that anticipates first metal in first quarter 2012 and an associated capital cost estimate of US$5.5 billion, excluding financing charges, foreign exchange and working capital requirements. Sherritt will fund its 40% of the capital cost increase directly from funds on hand.

The 16% (US$740 million) increase from the prior estimate is attributable to:

• inaccurate bulk material quantity estimates (including piping and electrical materials), the additional cost to procure, ship and install the materials, as well as the impact of poor performance by certain contractors (US$300 million, or 41% of the increase);
• additional service costs associated with the extension of the schedule, including site support services (which include food and accommodation), and additional EPCM services (US$195 million, or 26% of the increase); and

Nickel Sulfide Versus Laterite: The Hard Sustainability Challenge Remains – by Gavin M. Mudd (2009)

June 16, 2011

Gavin M. Mudd works at the Environmental Engineering, Department of Civil Engineering, Monash University, CLAYTON, Victoria, Australia 3800 (Gavin.Mudd@eng.monash.edu.au)

“A major concern with this increasing proportion of laterite nickel is that, although technology such as HPAL now exists to make processing of laterite ores more viable (technically and financially), it is widely perceived to be at a higher environmental cost.” (Gavin M. Mudd – 2009)

ABSTRACT

There are widespread nickel resources around the world, but divided principally between nickel sulfide or laterite (oxide) resources. Historically production has been dominated by sulfide ores but future production is increasing shifting to laterite ores. The principal reason for this historically is that sulfide ores are easier to process, through conventional mining, smelting and refining, compared to laterite ores which require intensive hydrometallurgical processing (such as high pressure acid leaching or HPAL).

This means that laterite ores typically require substantially more energy and chemicals to produce than sulfide nickel. Given that many major nickel companies report annually on their sustainability performance, such as Eramet, Inco (now Vale Inco), WMC Resources (now BHP Billiton), Norilsk Nickel, there is data available to examine in detail the differences in the environmental costs of nickel sulfide versus laterite.

The Charges Against Big Nickel [in 1946 by U.S. government] – by Richard Mills (Jun 9, 2011)

June 16, 2011

Richard Mills owns no shares of any companies mentioned in this report and none are advertisers on his site www.aheadoftheherd.com

As a general rule, the most successful man in life is the man who has the best information

In 1946, in New York City, the Anti-Trust Division of the Department of Justice filed a complaint against Inco and its wholly owned U.S. subsidiary, International Nickel Co. Inc.

Canada’s Inco, at the time, owned 90% of the world’s nickel ore and supplied 90% of U.S. nickel needs.

The charges brought were:

■Conspiracy to prevent competition in the nickel industry
■Fixing prices
■Making cartel agreements with I. G. Farbenindustrie, A. G. and two French companies to prevent competition and peg prices in the world market

The Department of Justice said the nickel industry ceased to be competitive earlier in the century when Charles Schwab arranged a merger between Canadian companies with nickel ore and U.S. companies with the chemical process for separating nickel from copper. Holdings of this combine were consolidated under Inco, Ltd. in 1928.

How ironic that in 2010 the US did not have any active nickel mines. Nickel has a very interesting history and is still extremely important in the everyday functioning of our modern economies.

Is a Profitable Nickel Laterite (HPAL) Mine a ‘Black Swan’? – by Patrick Whiteway (Canadian Mining Review Blog – January 31, 2011)

June 16, 2011June 16, 2011

Canadian Mining Review: Discussing ideas and issues related to mining in Canada

Thoughts on mining nickel laterites inspired by two recent books: ‘Linkages of Sustainability’ and ‘The Black Swan.’

It’s October 2008 and I’m relaxing in a second-row seat of an air conditioned tour bus. It’s crossing the Swan River in beautiful downtown Perth, Australia, when the driver suggests to passangers that the river should be called the Black Swan River. That’s because 300 years ago, he explains, European explorers first visited this part of Western Australia and saw black swans for the very first time. Up until then, the only swans they had seen were white ones. Seeing black swans on this wide, lazy river revolutionized their thinking.

Reading Nassim Nicholas Taleb’s best-selling book “The Black Swan,” could revolutionize your thinking. This book is all about highly improbable events. Taleb skillfully questions how we think about these events that turn out to have serious consequences. He calls them ‘black swans’ and as I’ll show here, they have a significant role to play in the mining industry.

As a Canadian mine engineer who has visited and written reports on many mines in Canada, I can tell you that improbable events, sometimes called simply luck, surprises, randomness or human error, have enormous consequences for the success or failure of many mines. The only successful, high pressure acid leach (or HPAL) nickel laterite operation in Australia is one of my favorite examples.

Surging costs delay Sherritt [Madagascar Ambatovy nickel] project – by Brenda Bouw (Globe and Mail – June 15, 2011)

June 15, 2011

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media. Brenda Bouw is the Globe’s mining reporter.

Sherritt International Corp. is the latest in growing list of mining companies to report double-digit cost increases and project delays resulting from surging prices for energy and raw materials.

Toronto-based Sherritt said the total cost of its 40-per-cent owned Ambatovy nickel-cobalt project in Madagascar is expected to rise 16 per cent to $5.5-billion (U.S.). Production, set to begin this summer, is now delayed until the first quarter of next year.

“We find this embarrassing and painful,” Sherritt chief executive officer Ian Delaney told investors on a conference call Tuesday. Sherritt’s stock fell 6 per cent on the Toronto Stock Exchange on Tuesday, its lowest level since last summer.

Rising costs are becoming a huge hurdle for miners as they rush to boost production and capitalize on global demand and metal prices while they remain strong.

Sustainability In Nickel Projects: 50 Years of Experience at Vale Inco – by S.W. Marcuson, J. Hooper, R.C. Osborne, K. Chow and J. Burchell (December 1, 2009)

June 10, 2015March 28, 2011

The principal author, Dr. Sam Marcuson ( Sam.Marcuson@valeinco.com ) is vice-president, business improvement for Vale Inco Limited, Mississauga, ON, Canada. This article was adapted from a plenary speech made at the CIM Conference of Metallurgists held August 2009 in Sudbury, Ontario. The full paper is available from the author or the conference proceedings.

Looking at the industry’s past and present with a view to projecting into the future can be a valuable exercise for executing and maintaining sustainable development

The first eight years of this century saw rapid growth in the consumption and production of nickel and related commodities. In response to growth in the BRIC countries, but especially China, new projects, many in under-developed countries, were initiated. Nickel pig iron, produced in aging Chinese blast furnaces, unexpectedly emerged. Simultaneously, scientists concluded that global warming is “unequivocal” and human activity is the main driver, “very likely” (>90%) causing most of the rise in temperatures since 1950[1]. These factors point to a future in which sustainable development becomes of paramount interest to the mining and metallurgy industry.

To the practicing metallurgist and operator, “sustainability” may appear as keeping employees safe, meeting prevailing environmental regulations and contributing to social programs contractually agreed to, while maintaining a low-cost operation that meets production and financial targets. But this is a highly simplified view that ignores many of the sustainability concepts.

An Overview of Nickel in 2011 – Excerpt From Global Mining Finance 2011

March 14, 2011March 10, 2011

Global Mining Finance was created four years ago as an annual book to provide international mining executives and their peers in the financial community with an overview of the industry from a World-wide perspective. For the main website: http://www.globalminingfinance.com/past-editions.html

The following research on nickel was provided by Paradigm Capital, a research-driven investment dealer, providing Research, Trade Execution and Investment Banking services.

Commodity Focus – Nickel

Two-thirds of all nickel produced goes into stainless steel, but is also important in the world of hi-tech where the soft magnetic properties of nickel and its alloys are employed. In this article, Paradigm Capital takes a look at the market for nickel.

Demand: Driven by The Stainless Steel Recovery

Nickel has a high rate of recyclability, This distinction is often made between the use of newly produced metal and recycled scrap. By far the most important first use of nickel is the production of stainless steel which accounts for over 60% of total demand with other first-use sectors being alloys, casting, electroplating, chemicals and batteries. The stainless steel sector is growing at a CAGR of about 5-6% per annum.

The nickel market rebounded strongly in 2010 compared to a very weak 2009, as a result of improved stainless steel demand conditions in combination with an amplified restocking period. In addition, the austenitic ratio (i.e. nickel bearing stainless steel) which has traditionally run at around the 75% level, has slipped lower. This was due to nickel’s meteoric price rise in 2007 to $25/lb. which proved to be the catalyst that triggered substitution, particularly into lower nickel bearing intra stainless steel grades. This proved to be one of the double whammies.

News Release: Sherritt Provides Update on the Ambatovy Project

January 2, 2011

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Click here to view: Sherritt International Corporation 2009 Corporate Social Responsibility Report

TORONTO, December 17, 2010 – Sherritt International Corporation (“Sherritt) (TSX:S) announced today the approval of increased capital costs for the Ambatovy Project to a total budget of US$4.76 billion, which includes a contingency of US$50 million. Sherritt intends to fund its 40% share of the capital cost increase directly.

During second-quarter 2010, the construction of the power plant, which was being executed under a turn-key contract, was identified as having high potential for delay in completion. The
slower construction progress on the power plant attracted additional costs in terms of management and engineering personnel and is the major contributing factor to the higher expected capital cost. During third-quarter 2010, Sherritt and the EPCM contractor assumed control of construction of the power plant.

Ian W. Delaney, Chairman and CEO of Sherritt commented, “We have thoroughly reviewed every facet of this Project and I am confident the required steps have been taken to keep it on track to produce metal by the summer of 2011. While the variance from our original capital projection is 5%, we felt the steps taken were necessary to ensure that the plant will operate as designed, and that we can ramp up production at a rate which will enable nickel to be delivered to customers as early as possible.”

News Release: Sherritt to acquire a controlling interest in the Sulawesi Nickel Project

January 2, 2011

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Click here to view: Sherritt International Corporation 2009 Corporate Social Responsibility Report

TORONTO, December 1, 2010 – Sherritt International Corporation (“Sherritt” or the “Corporation”) (TSX: S) today announced it has executed an earn-in and shareholders agreement with a subsidiary of Rio Tinto Limited (“Rio Tinto”) whereby Sherritt will acquire an interest in the Sulawesi Nickel Project (the “Sulawesi Project”) in Indonesia. Subject to satisfaction of certain conditions, Sherritt will acquire a controlling 57.5% equity interest in the holding company that owns the Sulawesi Project, and Rio Tinto will continue to hold the remaining 42.5%. Sherritt has been appointed as the Operator and will license its commercially-proven, proprietary technology to the Project. As consideration for its interest, Sherritt has committed to fund US$110 million towards producing a feasibility study from which a development decision will be made.

In compliance with Indonesia’s Mining Law, local Indonesian interests are expected to acquire a 20% interest in the Project. Following that event, Sherritt and Rio Tinto together will indirectly own and control an 80% interest in the Sulawesi Project, which will give Sherritt a controlling interest and a 46% economic interest with Rio Tinto maintaining a 34% economic interest.

Castro’s Favourite Capitalist- by Rachel Pulfer (Walrus Magazine, December, 2009)

December 29, 2010

The Walrus is a Canadian general interest magazine which publishes long form journalism on Canadian and international affairs, along with fiction and poetry by Canadian writers. It launched in September 2003, as an attempt to create a Canadian equivalent to American magazines such as Harper’s, The Atlantic Monthly or The New Yorker.

Will Sherritt International come to regret dealing with Communist Cuba? CEO Ian Delaney doesn’t think so.

The sun is rising over Old Havana, but the man standing at the balcony rail is in the shade. He gazes out over the city’s crumbling rooftops but seems oblivious to the sun-washed beauty of the harbour. His stare is blank, disengaged. He will give only his first name, Rodolfo. He is the operator of the camera obscura. One of many curiosities in the old port, the centuries-old technology uses a system of mirrors to project a 360-degree view of the exterior onto a bowl-shaped interior screen. Fidel Castro reportedly had the camera installed to ensure that he could see all parts of Havana from a protected vantage point. It’s now a tourist attraction.

“I was a teacher,” says Rodolfo. “I was earning less than 20 convertible pesos [around $25] a month. Then, last summer, I got on with Sherritt. With a bonus, my salary bumped up to 50 convertible pesos a month.” Unfortunately, his prosperity was short lived. Earlier this year, the project was cut. “If you know anyone at Sherritt, please talk to them,” he says. “Get them to start it back up.”

The camera obscura is now Rodolfo’s principal source of income. With a monthly salary of 16 convertible pesos, he is one of millions of Cubans who are barely hanging on. Last year, the country’s agricultural sector was knocked out, due to a particularly fierce hurricane season. That, and collapsing markets for Cuban commodities — primarily nickel, oil, and gas — plunged the island into its toughest economic crisis in a generation. With deficits soaring and cash reserves low, the government is delaying payments on profit-sharing agreements with foreign investors, even going so far as to cancel the one to which Rodolfo alludes. This has forced a difficult balancing act on Ian Delaney — Cuba’s biggest outside investor, Rodolfo’s former employer, and the man known on Bay Street as Fidel Castro’s favourite capitalist.

Delaney is CEO and chairman of Sherritt International, a multi-billion-dollar commodities conglomerate based in Toronto. Eighteen years ago, he made a deal with the Cuban Communist leader.