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Nickel Laterites

Mining group Eramet plans more savings as nickel stays weak – by by Gus Trompiz (Reuters India – October 21, 2013)

http://in.reuters.com/

PARIS – Oct 21, 2013 (Reuters) – Eramet on Monday said it would step up cost saving measures to counter the effects of a depressed nickel market, which contributed to a five percent fall in the mining group’s third quarter sales.

Benchmark prices of nickel, mainly used in stainless steel, sank to a four-year low in July due to poor industrial demand and rising stocks, leaving a swathe of global production operating at a loss.

Eramet reported a 5 percent year-on-year fall in third-quarter sales to 754 million euros ($1.03 billion), which included a 23 percent decrease for its nickel division.

“The Group is stepping up its measures to decrease its costs and capital expenditure, adjust its productions to its markets and reduce its working capital requirements,” Eramet said in a statement, without giving details.

The company reiterated that current operating profit in the second half would be “significantly lower” than in the first half, when Eramet reported a 9 million euro loss.

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UPDATE 1-Protests close world No. 2 ferronickel mine in Colombia – by Luis Jaime Acosta and Peter Murphy (Reuters India – October 10, 2013)

http://in.reuters.com/

BOGOTA, Oct 9 (Reuters) – Cerro Matoso, the world’s No. 2 ferronickel producer owned by multinational BHP Billiton and located in Colombia, said it has temporarily shut its mine after two weeks of protests by indigenous groups, halting 4 percent of world output.

The impact of the stoppage on the nickel market is likely to be subdued amid a global surplus of nickel that has caused prices to tumble about a quarter in the last year but adds to near-constant disruption in Colombia’s mining sector this year.

The London-traded nickel contract ended 1.7 percent lower at $13,660 per tonne on Wednesday. Cerro Matoso took the decision to close its mine for workers’ safety, it said in a statement, adding that protesters were demanding “monetary indemnification”. It did not say why, merely that the dispute could only be resolved in the courts.

“This implies that from now there will be no ferronickel production or associated activities … until conditions enable the company to operate normally,” it said. A mining ministry source said the protesters were demanding compensation for alleged harm to their health from pollution caused by the open-pit project which the source said generates about $185,000 a day for the government in royalties.

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CORRECTED-Asia stainless steel mills to benefit from Chinese nickel-pig-iron from Indonesia – by Polly Yam (Reuters U.S. – September 11, 2013)

http://www.reuters.com/

HONG KONG, Sept 11 (Reuters) – Chinese firms operating nickel mines in Indonesia are likely to step up plans to build nickel-pig-iron plants in the Southeast Asian country in order to continue shipping ores back home, which would help support higher production in China next year.

The move could mean Chinese firms’ supply of nickel-pig-iron, a low-grade ferro-nickel used in stainless steel production, would rise in Asia in 2 to 3 years time, helping regional mills such as POSCO and Nippon Steel & Sumitomo Metal to cut costs, industry sources said.

China is the dominant producer of nickel-pig-iron in the world and the output accounts for about a quarter of the global nickel production. But the production relies on imports of raw material nickel laterite ores, with Indonesia and the Philippines providing most ores.

Indonesia had planned to ban the export of ores from 2014 to push miners to build smelters at home to benefit the local economy. But in a policy reversal, it may now relax the ban in order to help support the rupiah currency and miners with smelters under construction will be allowed to continue to export ores.

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Low prices take toll on Cuban nickel revenues – by Marc Frank (Reuters U.S. – September 10, 2013)

http://www.reuters.com/

HAVANA, Sept 10 (Reuters) – Cuban nickel industry revenues were well below expectations in the first six months of the year, mainly because of low international prices, official radio reported this week.

The provincial radio station of Eastern Holguin province, Radio Angulo, reporting on a visit to Moa municipality by provincial Communist Party leader Luis Torres Iribar, said the municipality’s exports were short 26 percent, or $90 million, for the period.

Cuba’s only two nickel plants, the Cubaniquel-owned Ernesto Che Guevara plant and the Pedro Soto Alba, a joint venture between Canadian mining company Sherritt International and Cubaniquel, are both located in Moa.

The report said that the Ernesto Che Guevara plant’s earnings were 15 percent below expectations, and the Pedro Soto Alba plant was down 25 percent, “mainly due to the low price of the mineral on the world market.” Cuba plans to produce around 62,000 tonnes of unrefined nickel plus cobalt in 2013, according to local and foreign company reports.

Sherritt International has said it expects the Pedro Soto Alba plant to produce 38,000 tonnes, similar to 2012. An Ernesto Che Guevara manager said earlier this year the plant would produce 23,700 tonnes.

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UPDATE 1-Indonesia may loosen export ban on metal ores – by Rieka Rahadiana and Fergus Jensen (Reuters India – August 28, 2013)

http://in.reuters.com/

Aug 28 (Reuters) – Indonesia will push for a relaxation of its controversial 2014 ban on metal ore exports amid a scramble to support the rupiah and restore confidence in Southeast Asia’s largest economy.

Indonesia is the world’s top exporter of nickel ore, coal and refined tin and its mining industry contributes around 12 percent of gross domestic product (GDP).

However, the ban on unprocessed mineral exports from January 2014 has hit the industry and uncertainties over the country’s mining rules have dented its credibility with foreign investors.

If approved, the reversal of mining policy will upset metal industries banking on a tightening of ore shipments that have increased significantly in the lead up to the ban. However, some in parliament doubted the government would manage to overturn the rule.

Under the proposed revision, mining companies with smelters under construction would be allowed to continue to export unprocessed minerals, but would be charged a progressive duty on the shipments depending on how close to completion their projects are, Industry Minister Muhammad Sulaeman Hidayat told reporters.

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New Caledonia weighs up impact of nickel mining – by Johnny Blades (Radio New Zealand International – July 12, 2013)

http://www.rnzi.com/index.php

Nickel mining is being blamed for New Caledonia’s soaring carbon emission rate and a nagging problem with pollution in the capital, Noumea, Nickel represents over 90 percent of New Caledonia’s overall exports and is the bedrock of the economy.

But as Johnny Blades found out, questions are being asked whether the territory’s heavy reliance on nickel mining is hindering its prospects of a sustainable future.

For a first time visitor to Noumea, it hits you as you drive towards the city. It’s different from many capitals in the Pacific region. You’re driving a multi-laned sealed motorway, being overtaken by BMW SUVs and Audis, passing lots of big buildings, housing developments. Signs of money are everywhere, and as you near the city itself, an explanation as it why there’s so much money floating around seems to present itself. The motorway winds around a large industrial complex with several tall chimneys belching dirty smoke into the air. So I pulled off the road to get a better look at it. It’s the power plant and smelter facility of SLN, Societe Le Nickel.

DOMINIQUE NACCI: The state-controlled mining company, SLN. SLN was owning over 70 percent of the tenements of New Caledonia, so it’s very important. And also New Caledonia owns about 25 percent of the world resource of nickel.

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BMS [ferro-nickel] Smelter to Start Operations in 2014 – by Damiana Simanjuntak (Jakartaa Globe – July 8, 2013)

http://www.thejakartaglobe.com/

Local miner Bumi Makmur Selaras Group Indonesia and Chinese metal miner Hanking Group are set to start operating their $500 million ferro-nickel smelting plant in Sulawesi next year, to comply with a government requirement to process mining product domestically.

Tadjudin Hidajat, the BMS president director, said the company and its Chinese partner had invested $150 million by the end of June. He said the processing plant is projected to be complete by December and to start commercial operations next May.

“The smelter was built in response to the ban on export of raw minerals that will be imposed by the government in 2014,” he said after a meeting with Industry Minister M.S. Hidayat last week.

The 2009 Mining Law states that mining outfits operating in the country must submit plans to process raw minerals such as aluminium and copper domestically before 2014. The government will ban the export of raw minerals after 2014 for mining outfits without such plans. In its early stage the Sulawesi smelter’s production capacity will reach 20,000 tons per year and be increased incrementally to 60,000 tons per year.

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Environmental headwinds buffet BHP in Colombia – by Brian Robins (Sydney Morning Herald – July 1, 2013)

 http://www.smh.com.au/

In the wake of heightened environmental sensitivities to the activities of mining companies in Latin America, BHP Billiton’s plans to expand a nickel mine in Columbia have been blocked.

Governments in the region from Chile to Argentina have forced several global mining companies to rethink mine applications in response to growing criticism over the industry’s rising incursions.

Late last week, Colombia’s environmental licensing authority, Autoridad Nacional de Licencias Ambientales, turned down a request from BHP Billiton’s Cerro Matoso nickel mine to expand the site, according to wire reports. Cerro Matoso is the second largest producer of ferro nickel globally.

The request was denied because existing environmental permits cannot be modified to enable mining projects to be expanded, the environmental authority said.

The BHP Billiton project, which has operated for many years, produced more than 47,000 tonnes of nickel last year. The mine taps a laterite nickel deposit that is used as feedstock at a ferro-nickel smelter nearby. Most nickel is used to produce stainless steel.

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Nickel price to weaken further as pig iron sector cuts costs (Reuters/Economic Times – June 19, 2013)

http://economictimes.indiatimes.com/

SINGAPORE/LONDON: China’s nickel pig iron producers are turning in droves to a new technology that allows them to survive at lower prices, a move that suggests nickel prices, already mired at four-year lows, could fall further.

As nickel prices near $14,000 a tonne, however, output cuts by loss-making producers with higher costs could steady the market, analysts said.

Nickel, mainly used to make stainless steel, is down 17 percent this year. It is the worst performer of a industrial metals complex hit hard by China’s slowing growth. Fed by a commodity boom, prices peaked above $50,000 a tonne in 2007.

Production of nickel pig iron in China, a cheaper substitute for pure nickel used as feedstock by stainless steel mills, has more than quadrupled to an estimated 400,000 tonnes this year from 89,000 tonnes in 2008, according to Macquarie.

At the same time, technical innovations have slashed costs, which has in turn lowered the floor for nickel prices.

The break-even cost for nickel pig iron produced by rotary kiln electric furnace (RKEF) technology is now as low as $12,500 a tonne and its market share has soared, said Dennis Zamora, senior vice president for marketing and strategic planning at Nickel Asia Corp.

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Ibris Group plans $1.8 bln Indonesian nickel smelter – by Fergus Jensen (Reuters U.S. – June 19, 2013)

http://www.reuters.com/

JAKARTA – (Reuters) – Ibris Group, a Singapore-based miner, announced plans to build a $1.8 billion nickel pig iron plant in Sulawesi, the latest in a series of smelter projects after Indonesia began tightening controls on ore exports.

Indonesia, the world’s top nickel ore exporter, has been pushing for greater returns from its resource wealth. In 2009, it imposed a ban on unprocessed ore exports after January 2014.

The government, which has faced widespread criticism from miners and metal importers over the rules, has indicated it may relax the ore export ban for companies with smelter projects, however.

Singapore-based Ibris, which expects to export around 3 million tonnes of nickel ore this year, triple its 2011 level, plans to build the Rotary Kiln Electric Furnace smelter in two stages, with a total budget of around $1.8 billion.

“We will draw on our own funds as well as external investment. We have agreed with a consortium of financial investors to take a share of the project finance,” Ibris Group Chief Executive Arwan Ahimsa told reporters in Jakarta. Ibris would hold a 51 percent stake in the project.

“We have the engineering and basic design, and we are adjusting this to suit the site conditions, infrastructure requirements and support material,” Ahimsa said.

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Horizonte raises $4.7 million for Brazilian nickel project – by Lawrence Williams (Mineweb.com – June 11, 2013)

http://www.mineweb.com/

AIM and TSX junior nickel developer Horizonte Minerals has done well to raise $4.7m in the current climate and has organised an optional facility for a further $12.5m.

LONDON (MINEWEB) – AIM and TSX main board quoted Horizonte Minerals, which is concentrating its efforts on its Araguaia nickel project in Brazil’s Carajás region in Pará state – a deposit which it describes as a world leading asset in terms of size and grade – has just announced it has raised some £3 million ( around US$4.7 million) in an equity issue at 7.5 p/share, fully supported by its two major shareholders, Teck and Henderson Global Investors (HGI).

In addition it has also entered into a term sheet for an equity financing facility (EFF) for up to £8m ($12.5 million) over three years with Darwin Strategic Limited, a subsidiary of HGI. This can be drawn down at Horizonte’s option.

The Araguaia nickel deposit is a saprolitic nickel laterite located in the same area as Vale’s Onça Puma nickel mine as well as some other significant nickel projects including Glencore Xstrata’s Serra do Tapa only 60 km away.

Grades are reckoned as good for a deposit of this type and the resource is big – with considerable scope for expansion. The current NI 43-101 resource is estimated at 39.3 million tonnes grading 1.39% Ni (Indicated) and 60.9 million tonnes at 1.22% Ni (Inferred) at a 0.95% nickel cut-off. At lower cutoff grades the tonnages are far higher.

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[Eramet] Weda Bay Nickel May Miss Tax Holiday – by Tito Summa Siahaan (Jakarta Times – June 6, 2013)

http://www.thejakartaglobe.com/

France-based mining firm Eramet has been urged to spin off the processing facility of its planned Indonesian nickel mine if it wishes to take advantage of a foreign investment tax holiday.

The company plans to invest up to $5 billion to build nickel processing facilities associated with its proposed mine at Weda Bay in North Maluku.

Because the company formed to pursue the Weda Bay mine plan pre-dates the government’s tax holiday initiative, the company may otherwise be ineligible for the incentive that it sought. A contract of work for the proposed mine was signed with the national government in 1998.

Thamrin Sihite, the director general for coal and mineral resources at the Energy and Mineral Resources Ministry, said that the regulation providing a tax holiday, issued by the Finance Ministry, may not cover investment plans such as the one by Eramet.

“The thing is, the tax holiday is only for companies [incorporated] after the regulation was issued [in 2010],” Thamrin Sihite said after a meeting with a French trade delegation lead by Trade Minister Nicole Bricq in Jakarta on Wednesday.

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Sherritt facing demands from activist as chairman Ian Delaney retires – by Peter Koven (National Post – May 8, 2013)

The National Post is Canada’s second largest national paper.

A turbulent period could be looming for Sherritt International Corp., as an activist investor is challenging the company just as its long-time chairman and figurehead retires.

Scott Leckie of Takota Asset Management is calling on Toronto-based Sherritt to buy back more stock and study a potential lawsuit against SNC-Lavalin Inc., which he believes is responsible for cost overruns and delays at the company’s Ambatovy nickel project. He said he took his complaints public after Sherritt ignored three private letters.

“[Sherritt CEO] David Pathe has said they’re in a position to respond to opportunities. To me that means they have excess capital above and beyond anything they’re going to need for the last bits and pieces of Ambatovy,” Mr. Leckie said in an interview.

Sherritt also quietly revealed in a filing that chairman Ian Delaney, 69, is retiring from the company and is not standing for re-election at the annual meeting later this month.

He has been Sherritt’s dominant personality since he seized control of it in a proxy fight in 1990, and his departure leaves a major gap. But it does not come as a shock; in late 2011, he passed the CEO job on to Mr. Pathe and said he was content with the state of the company.

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Antam, Vale back on their feet due to increased sales volume – by Raras Cahyafitri (Jakarta Post – May 01 2013)

http://www.thejakartapost.com/

Listed nickel miners PT Aneka Tambang and PT Vale Indonesia are reporting increased net profits in the first quarter of the year due to higher sales volumes offsetting price pressure.

Aneka Tambang (Antam) reported booking Rp 462.43 billion (US$47 million) in net profits in the first three months of the year, up from Rp 379.19 billion in the same period last year, while Vale recorded $31.5 million in net profits, up 728 percent from $3.8 million.

“In the first quarter, our export volume of nickel ore increased and gold sales also rose, although their prices were almost similar to last year,” outgoing Antam president director Alwinsyah Lubis said after the company’s annual general meeting of shareholders on Tuesday.

Antam also reported that its sales volume for gold in the first quarter was up 63 percent to 93,526 troy ounces. Meanwhile, the firm’s gold sales were Rp 1.55 trillion, up 71 percent year-on-year, contributing 46.5 percent to Antam’s total revenues of Rp 3.34 trillion during the January-to-March period, up 35.5 percent from Rp 2.46 trillion in the same period last year.

Antam’s sales of nickel ore contributed about 33 percent of toal revenues, or Rp 1.12 trillion in the first three months of the year, up 67 percent compared to Rp 662 billion year-on-year, according to the company’s financial report.

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Sulawesi Mining to Invest $1.06b in Smelter – by Damiana Ningsih Simanjuntak (Jakarta Globe – April 26, 2013)

http://www.thejakartaglobe.com/

Sulawesi Mining Investment, an Indonesian-Chinese joint venture company, plans to invest $1.06 billion in a Central Sulawesi nickel mining operation, including a plan to build a smelter, an industry executive said on Thursday.

Alexander Barus, vice president of Bintangdelapan Mineral, the Indonesian firm in the venture, said that some $96 million would go toward the smelter and support the power plant in Morowali, Central Sulawesi, while $100 million would be for the mine and supporting facilities.

Halim Mina, vice president commissioner of Sulawesi Mining, said that the investment would be split into two stages. “For the first phase, the investment will stand at $340 million and the second phase at $640 million,” Halim said.

“The plan is for the first phase to become operational at the end of 2014,” he added, noting that about 30 percent of the first phase had already been completed.

He said the smelter’s output would mostly be exported to China, but gave no details, adding only that its products would be marketed domestically “in line with the demand” for nickel.

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