Nickel Laterites – Page 58 – Republic of Mining

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.

Dirty Nickel Pig Iron’s Pollution, Cost and Impurities are Obstacles for China and No Threat to Sudbury – by Nick Stewart

June 24, 2010June 24, 2010

This article was originally posted on the Northern Life website on June 23, 2010.

The threat that Chinese-produced nickel pig iron poses to Sudbury’s nickel producers is overblown, according to mining analyst Raymond Goldie.

Speaking to the 11th International Platinum Symposium at Laurentian University’s Fraser Auditorium June 22, Goldie said that nickel pig iron — a low-cost substitute for refined nickel — is too flawed to pose a serious long-term threat.

“There’s two big problems with pig nickel,” Goldie, senior mining analyst and vice-president of Toronto-based Salman Partners, said. “Firstly, it’s dirty, and second, making it is dirty. It is in fact too dirty to be the sole source of nickel in stainless steel.”

Nickel pig iron is made by putting nickel-rich dirt in a specialized furnace. However, the end product is riddled with impurities, and must be blended with pure or virgin nickel to make stainless steel. For every pound of pig nickel, four pounds of virgin nickel is required.

Nickel Pig Iron Equals “Dirty Nickel” – Sudbury Nickel is Sustainable and Clean – Stan Sudol

June 15, 2010June 14, 2010

Last Saturday’s (June 12, 2010) Globe and Mail’s Report on Business article on Nickel Pig Iron and its hyped headlines that inferred serious trouble for Sudbury, Canada’s largest nickel producing region was bit overblown. While the subject of Nickel Pig Iron has made a major impact in the global nickel markets, reporter Andy Hoffman had overlooked a few key issues that significantly downplay the impact of Nickel Pig Iron on the Sudbury Basin, which remains the richest mining region in North America and among the top ten most significant globally.

Nickel Pig Iron has been around for at least half a decade or longer. It will probably put a cap on the price of nickel though one very knowledgable source feels the $8.50 level mentioned in the Globe and Mail article is at the low end. When you factor in rising labour costs in China, the cost of power and the environmental impacts in the Philippines and Indonesia, the cost per pound is really in the $12.00 range.

I might add the Nickel Pig Iron is in reality “Dirty Nickel.” The processing of the material in blast furnaces in China is an environmental nightmare. In addition, the small companies that supply the material to China are probably not restoring the strip-mined jungle that is the source of this low grade nickel ore. Those are the companies that NGOs should be going after, not environmentally responsible corporations like Vale, Barrick, BHP-Billiton or Teck.

The high-quality pure nickel produced in the Sudbury Basin is done under strict first-world enviromental, health and safety standards. The rich Sudbury Basin ore also contains copper, gold, silver, platinum, cobalt and a few other metals. Nickel Pig Iron only gets cash credits for the iron content.

In addition, Nickel Pig Iron can only be used for low-end stainless steel products. Jet engines and many high-end industrial applications must use pure nickel to produce the specialized stainless steel and nickel-based super alloys for their applications.

And one more point, digging up vast tracks of virgin jungle and shipping this “low-grade nickel mud” to China adds very little sustainable value to the countries allowing this to happen, except to well-connected landowners or a few junior mining companies. As the world begins to understand the unsustainable mining practices that the production of Nickel Pig Iron entails, there may be more opposition to its use.

A Breakthrough in China, [Nickel Pig Iron] Another Blow for Sudbury – by Andy Hoffman (Globe and Mail-June 15, 2010)

June 10, 2015June 12, 2010

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.

This article was the cover story of the Saturday, June 12, 2010 edition of the Globe and Mail’s Report on Business section.

No longer just a low-wage workshop, China is reshaping world markets through innovation – including a revolutionary alloy that takes aim at Canada’s nickel belt

Andy Hoffman, Asia-Pacific Reporter – Xuzhou, China

Ask Li Guang about the prospects for his business and a self-assured grin creeps across the young executive’s face. It’s a smile that means trouble for Canada’s nickel-mining capital of Sudbury, Ont., more than 11,000 kilometres away from Mr. Li’s office in eastern China .

“Our production has quite a lot of advantages compared to refined nickel,” says the budding metals titan, who is all of 30 years old and dressed in a short-sleeve dress shirt and black jeans. “Now, in China, many other enterprises are going to enter this market. Gradually they will take over a lot of the share of refined nickel.”

Mr. Li and his company, Jiangsu Mingzhu, are among the many Chinese manufacturers churning out a revolutionary product known as nickel pig iron or NPI. Despite its prosaic name, the alloy has set the global nickel industry on its ear by providing a low-cost alternative to the refined nickel that has typically been used to make stainless steel. Cheap NPI threatens to squelch demand for the refined metal, which is produced in places like Sudbury, as well as in Russia and Australia.

In less than five years, NPI has reshaped the world nickel industry, marking a new stage in China’s capitalist evolution. Since it opened itself to trade in the late 1970s, the Asian nation has become famous for two things – lowering the price of manufactured products with its cheap labour costs, and driving up the price of commodities with its aggressive demand. Now it is altering the fundamentals of a vital industrial sector with a homespun innovation.

NPI, a material produced in low-tech Chinese factories, already accounts for as much as 10 per cent of the world’s $21-billion-a-year nickel market, more than all the nickel that can be produced annually in Sudbury. Some analysts expect China’s NPI producers to double their output this year.

Sherritt International at Eighty – Marching to a Different Drum – by Jane Werniuk (Part 2 of 2)

March 30, 2009

The Canadian Mining Journal is Canada’s first mining publication.

This article was originally published – February/2008

Coal division

Coal contributed 7% of Sherritt’s revenue in the first nine months of 2007.

2003 was a pivotal year for the coal industry in western Canada, when the two major ownership groups exchanged thermal and metallurgical coal assets. Through its ownership of Luscar Coal Income Fund, Sherritt consolidated its holdings in thermal coal, while metallurgical coal was consolidated in the Elk Valley Coal Partnership.

Sherritt International and the Ontario Teachers’Pension Plan each own 41.2% interest in the Royal Utilities Income Fund, which controls Prairie Mines & Royalty Ltd. Sherritt manages the operations at PMRL’s eight surface mines in Alberta and Saskatchewan. The production from these mines is almost all sold to nearby coal-fired electrical generating plants. As well, Sherritt and the Ontario Teachers’ each own half of the Coal Valley export thermal coal mine in Alberta, which is operated by Sherritt.

While coal was not initially one of Sherritt’s traditional core businesses, it is now a substantial part of the Sherritt puzzle. The company moves 500 million tonnes (t) of material each year to mine 40 million t of coal, making Sherritt the largest surface miner in Canada.

Sherritt International at Eighty – Marching to a Different Drum – by Jane Werniuk (Part 1 of 2)

March 30, 2009

The Canadian Mining Journal is Canada’s first mining publication.

This article was originally published – February/2008

Sherritt International is a resources company built from the bricks of a Canadian nickel miner, which recently celebrated its 80th anniversary, shown by the timeline in this article. Despite the intervening decades and corporate upheavals, Sherritt is still a nickel company grounded in the strength of its research, technical innovation and operational expertise. But it has become international, and is aggressively focusing on growth in all its business units–metals, coal, power generation, and oil and gas.

In a recent two-hour interview with the company’s president and CEO Jowdat Waheed at its uptown Toronto head office, I learned that Sherritt has decided to get its story in front of the public, which prompted Waheed to invite me to visit the company’s metals, technology and coal offices and facilities in western Canada followed by a trip to see its Cuban assets, all in four days in early February. It is from this brief immersion that I bring you a snapshot of Sherritt International, today.

Metals division

This is by far the largest part of the company, bringing in 62% of Sherritt’s revenue and 80% of its operating earnings in the first nine months of 2007.

The Thunder From Down Under – A History of Nickel Laterites – by Stan Sudol

May 15, 2010March 27, 2009

The Canadian Mining Journal is Canada’s first mining publication.

This article was originally published – August/2005

Everything you wanted to know about laterites but were afraid to ask

The last few years of the 20th Century were not very kind to the nickel industry. In October and December of 1998 the LME price for nickel dipped to US$1.76 a pound, the lowest level ever, if you factor in inflation. The imploding Russian economy was dumping nickel on western markets, the Asian currency crisis was annihilating economic growth and metal demand, and new lower-cost mine production was threatening to come on stream.

Of great concern to Canadian nickel giants Inco Ltd. and Falconbridge Ltd., the second and third largest producers after Russian MMC Norilsk, was an upstart Australian company called Anaconda Nickel Ltd.

Andrew “Twiggy” Forrest, Anaconda’s chairman, was well known in Australian mining circles for his legendary salesmanship and determination. One could almost imagine him pounding the table like Nikita Khrushchev and boasting that “he would bury the West with low-cost laterite nickel.”

Partner Sought for Madagascar Nickel Laterite Project – by Jane Werniuk

March 13, 2009

The Canadian Mining Journal is Canada’s first mining publication.

This article was originally published – April/2006

Another large Canadian nickel laterite project is Ambatovy in eastern Madagascar, off the east coast of southern Africa. The project is owned by Dynatec Corp. of Richmond Hill, Ont., and Sumitomo Corp. of Tokyo.

Ambatovy was studied extensively from 1989-95 by Phelps Dodge Corp., which sold 100% interest in the project to Dynatec between 2004 and January 2005. A bankable feasibility study, co-ordinated by SNC-Lavalin Engineers & Constructors, was released in February 2005. The results were positive, but the estimated capital expenditure was US$2.25 billion — too expensive for Dynatec to carry alone.

The company sought and found two partners. In May 2005 it signed an agreement with Impala Platinum Holdings of Johannesburg for 50% interest. Sumitomo purchased 25% interest in August 2005, reducing Implats’ and Dynatec’ holdings to 37.5% each. A shareholders agreement was signed between the three parties in mid-October, but six weeks later came news that must have been bitter. A Nov. 28 news release said, “Implats has advised that it has determined that the benefits to Implats which it had initially anticipated from the project do not now appear to be achievable.”

Falconbridge’s Nickel Laterite Koniambo Project in New Caledonia – by Marilyn Scales

May 4, 2015March 13, 2009

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.This article was originally published – April/2006

Another major Canadian player in New Caledonian nickel is Toronto’s Falconbridge Ltd. (soon to be swallowed by Inco Ltd.). Falconbridge and its 51% joint venture partner Société Minière du Sud Pacifique S.A. (SMSP), are developing the Koniambo Project in the northern part of the island for start up, perhaps as early as 2009.

Last month, Falconbridge and SMSP (which is owned primarily by the North Province) created an operating company, Koniambo Nickel S.A.S. under the leadership of president Brian Kenny. Koniambo Nickel will hold title to the Koniambo deposit. On March 1, the French minister of overseas territories François Baroin laid the ceremonial first stone for the Koniambo project.

The following day the Koniambo Nickel board met to approve this year’s work program. Preparing the earthworks and advancing the project engineering are the top priorities for 2006. Dredging of a port will begin early in 2007, and the main construction period will be 2008-09. Production will begin very late in 2009 or early in 2010.

Better Returns Expected From Revised Goro Nickel Laterite Project in New Caledonia – by Marilyn Scales

May 4, 2015March 13, 2009

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.This article was originally published – April/2006

New Caledonia, a French island territory 1,600 km off the northeast coast of Australia, is home to an estimated 25% of the world’s known nickel reserves. With rich laterite and saprolite deposits, it is no wonder this island nation is the scene of increased mining activity. A subsidiary of Paris-based Eramet currently owns five mines and a smelter scattered across the island. The other producer is Société Minière du Sud Pacifique S.A. It, too, has several mines supplying an Australian smelter.

The Goro Nickel Deposit, tucked away on the southern tip of New Caledonia, is one of the world’s largest undeveloped laterite deposits. But not for long. Construction of the mine, mineral processing plant, and extensive infrastructure is moving ahead quickly toward a start-up date of late 2007.

As of the end of February 2006, engineering is over 70% done, with about 1,600 workers on the site. Earthworks for the process plant were completed in March 2006, and will continue at the residue storage facility and on road realignment. The test mine extends to the saprolite horizon and exposed bedrock. The first of almost 2,000 skilled Filipino workers will soon arrive to start on construction.

The first berth of the port will be completed in time to receive the first module of the processing plant in May. The next milestone will be completion of the first half of the coal-fired power plant in September. The second berth of the port and the raw water pipeline will be finished in time for that event.

Inco’s Record in Indonesia Under Microscope – Mick Lowe (December/2000)

December 8, 2010February 13, 2009

Mick Lowe’s column – On The Rock – was originally published December 6, 2000 in Northern Life, Greater Sudbury’s community newspaper.

What are the environmental and health effects of living near one of the world’s largest laterite nickel mining and smelting complexes, specifically Inco’s operation on the Island of Sulawesi in eastern Indonesia?

That was the big question on Evan Edinger’s mind when he went to visit the village of Soroako earlier this fall. Edinger is a post-doctorate fellow in geology at Laurentian University, and the first scientifically trained, independent observer from Sudbury to visit Inco’s Indonesian operations.

What Edinger found was a lush, mountainous tropical setting which, superficially, at least, has suffered little of the environmental devestation so sommon around Inco’s activities here On the Rock.

Much of the contrast, Edinger believes, is due to the difference in the chemical makeup of sulphide nickel ores, which is what we mine here in Sudbury, and laterite nickel ores, which is the type of nickel mined throughout the tropics.