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Nickel

South32 looks better bet than parent BHP Billiton by Clyde Russell (Reuters U.S. – March 17, 2015)

http://www.reuters.com/

LAUNCESTON, Australia – (Reuters) – BHP Billiton has done a great job in making its spin-off South32 look attractive, perhaps to the point where it may be a better bet than its parent.

The world’s largest miner released documents on Tuesday outlining details for the new company, which will take over BHP’s aluminum, manganese, nickel, silver and some coal assets.

These assets are often described in the media as “unloved,” but the outlook for many of them is better than the core of iron ore, petroleum, copper and metallurgical coal that will remain with BHP. South32, so named for the line of latitude that links its main operating centers of South Africa and Australia, will get a head start from its parent.

The new company will assume only $674 million in net debt, about half the level analysts had expected, providing a boost to the management should they decide to pursue mergers and acquisitions. Analysts expect the new company, which will list in Australia, the United Kingdom and South Africa, will be worth up to $13 billion.

The South32 assets contributed net profit after tax of $738 million to BHP for the half year to December 2014, again an upside surprise that bodes well for the new company’s reception.

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Nunatsiavut president Sarah Leo ‘quite disturbed’ over Vale agreement – (CBC News Newfoundland – February 25, 2015)

http://www.cbc.ca/news/canada/newfoundland-labrador

The Inuit government in Labrador isn’t happy with the announcement of changes to the Voisey’s Bay agreement, which will allow Vale to continue exporting unprocessed ore from the massive nickel mine.

Nunatsiavut president Sarah Leo said the Newfoundland and Labrador government was required to consult the Inuit because the mine is on land connected to their land agreement with the provincial and federal governments.

“We should’ve been consulted — I mean, it’s in our backyard. It’s right here,” she said. “We have a land claims agreement that specifically has a chapter dedicated to the Voisey’s Bay project,” Leo told CBC News. “So, it’s very important to us that we have an understanding and are involved in what’s happening with the project.”

On Tuesday, Natural Resources Minister Derrick Dalley and Vale VP Stuart Macnaughton announced that they were amending the Voisey’s Bay Development Agreement to allow the company to send nickel concentrate from the mine in Labrador to Ontario and Manitoba for processing.

The delay is connected to delays in completing Vale’s massive processing facility in Long Harbour, in Newfoundland’s Placentia Bay.

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Vale to pay Newfoundland $230-million for nickel export boost – by Sue Bailey (Canadian Press/Globe and Mail – February 25, 2015)

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.

ST. JOHN’S — Mining giant Vale SA will pay Newfoundland and Labrador $230-million for letting the company export more Voisey’s Bay nickel concentrate while a processing plant ramps up in the province.

Vale will be allowed to export another 94,000 tonnes that must be replaced later, Natural Resources Minister Derrick Dalley said Tuesday.

The move will mean $200-million in compensation from Vale over three years. Another $30-million in community investments from the company are to be negotiated with the province. Complex design and other issues have delayed full operation of the Long Harbour processing plant, about 120 kilometres west of St. John’s.

The $4.3-billion facility will be an asset for years to come, Mr. Dalley said. The announcement is on top of other export allowances in 2013 and 2002, totalling 633,000 tonnes in potential processing exemptions that must be replaced.

Stuart Macnaughton, Vale’s vice-president of operations in the province, said the added flexibility means mining at Voisey’s Bay in Labrador will continue while the plant in Long Harbour is finished.

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Vale gets extension for exporting Voisey’s Bay ore – by Terry Roberts, CBC News Newfoundland – February 24, 2015)

http://www.cbc.ca/news/canada/newfoundland-labrador

Long Harbour nickel plant now schedued for full production by 2018-19

Vale has won approval from the Newfoundland and Labrador government to export more nickel concentrate from its mine at Voisey’s Bay, as a result of delays in commissioning its $4.25 billion processing plant in Long Harbour.

The company will pay $200 million over four years in compensation for the right to export an additional 94,000 tonnes of nickel concentrate from its mine on Labrador’s northern coast to its other processing facilities in Ontario and Manitoba. Vale will contribute another $30 million to a community fund.

The exemption gives Vale flexibility in its efforts to bring its nickel processing plant in Long Harbour, in Newfoundland’s Placentia Bay, up to full capacity, and to avoid any production interruptions at the Voisey’s Bay mine, which is one of the Canada’s most significant nickel finds.

The latest amendment to the Voisey’s Bay Development Agreement was announced Tuesday morning by Natural Resources Minister Derrick Dalley and Stuart Macnaughton, Vale’s vice-president of operations in Newfoundland and Labrador.

“Had the export cap not been increased, we would have been left with no choice but to stop operating in Labrador for up to 18 months and not resume normal operations at Voisey’s Bay until Long Harbour was able to process larger quantities of nickel concentrate from Voisey’s Bay,” said Macnaughton.

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Low dollar could help Sudbury miners in labour negotiations – by Staff (Northern Ontario Business – February 19, 2015)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

A low Canadian dollar could work in the United Steelworkers’ favour as they enter into contract negotiations with Vale in Sudbury, said a Laurentian University commerce professor.

The current five-year collective bargaining agreement between the United Steelworkers Local 6500 and Vale will expire at midnight on May 31, 2015. Jean-Charles Cachon said the low Canadian dollar should give the Steelworkers more bargaining leeway when it comes to salaries.

The lower Canadian dollar decreases Vale’s operational costs in Sudbury, Cachon said. “As workers are paid in Canadian dollars, any weakening of the Canadian dollar is to the advantage of Canadians,” he said.

“It’s becoming a seller’s market in terms of the job market,” Cachon said. “There are less and less people waiting to work for the mining industry. They (Vale) are probably going to have to pay a premium for employees in the next few years.”

Cachon said he expects the Canadian dollar to stay well below parity as long as oil prices remain low. But while the low dollar might give workers more negotiating room, Cachon said he does not expect Vale to give in without a fight.

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UPDATE 1-Brazil’s Vale beats iron ore forecast, takes nickel crown – by Stephen Eisenhammer (Reuters U.S. – February 19, 2015)

http://www.reuters.com/

Feb 19 (Reuters) – Brazilian miner Vale SA said on Thursday it produced 319.2 million tonnes of iron ore in 2014, beating its forecast for the year, as it begins to boost production after years of stagnation.

Vale, the world’s largest producer of iron ore, produced 83 million tonnes of the steelmaking ingredient in the fourth quarter, an increase of 2 percent from the same period a year earlier.

Full-year iron ore production rose 6.5 percent compared with the previous year, breaking through the 300 million-tonne-a-year mark, where it has been practically frozen since 2007. Vale had forecast output of 312 million tonnes for the year.

The growth in production will be more than offset by falling iron ore prices, which fell by half last year as a massive increase in Australian capacity coincided with a slowdown in China, the main market for iron ore.

Vale took the crown for the world’s biggest producer of nickel from Russia’s Norilsk Nickel, reaching 275,000 tonnes of the ingredient used to make stainless steel in 2014. That was its best performance since 2008, despite falling short of guidance.

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Norilsk, Russia — The inescapability of the company town on the tundra – by Mia Bennett (Cryopolitics.com – February 2015)

http://cryopolitics.com/

There are many ways of framing Arctic climate change.

On the one hand, countries in the south often see themselves as potential victims of the melting Greenland ice sheet and rising sea levels. On the other hand, in the north, Arctic residents often view themselves as the victims of massive levels of industrialization and urbanization in the south. Most of the world’s greenhouse gases emissions, after all, can be traced to the United States, China, Europe, and Russia.

These emissions are driving environmental changes like warming temperatures and ocean acidification, which are exacerbated in the north by the polar amplification effect. Arctic residents then wonder whether it is fair for them to have to pay, often with their traditions and livelihoods, for people in the south to enjoy all the creature comforts of modernity.

But it’s not so simple as that. The Arctic, too, has sooty, polluting cities, some of which have a higher carbon footprint than cities in the middle and southern latitudes. Several of these can be found in the Russian Arctic, which is more industrialized than any other Arctic country’s northern area.

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First Nickel committed to Lockerby Mine -by Carol Mulligan (Sudbury Star – February 12, 2015)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

First Nickel wouldn’t be planning to invest as much as $900,000 in exploration drilling in 2015 if it didn’t believe Lockerby Mine had a future longer beyond a year or two.

The company made tough decisions in December, bringing in a new vice-president of Sudbury operations, developing a plan to cut expenses and employees, and resuming mining its ramp development between the 6,800-foot level, says FNI’s Thomas Boehlert. FNI issued layoff notices to about 25% of its own employees and cut 75% of the contractors it was employing so it could save 130 other jobs at the mine formerly owned by Falconbridge Ltd.

The economics of the market, the low price of nickel and the cost of running the mine forced the company to stop ramp development in 2014. But it decided to resume mining below that level, mining the ore it believes will last until 2016, as it invests in diamond drilling to define and “prove up” other ore bodies at the mine, says Boehlert, the president and chief executive officer of First Nickel.

If cuts to expenses, including some at FNI’s Toronto office, hadn’t been made, the company would have quickly mined out the remaining reserves at and above the 6,800-foot level and had to close the mine, said Boehlert in a recent interview.

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‘Full speed ahead’ for Victoria Mine, says KGHM manager – by Jonathan Migneault (Sudbury Northern Life -February 11, 2015)

http://www.northernlife.ca/

Project still waiting for full funding from KGHM

It’s still “full speed ahead” for KGHM’s Victoria Mine project in Sudbury, said a senior manager with the company in Sudbury.

Trevor Eagles, KGHM’s manager of engineering in Sudbury, said the project is finalizing a feasibility study, and is on schedule to complete a mining shaft by 2019.

In 2014 KGHM completed timbering at the site, located about two kilometres south of the historic Victoria Mine, which was first developed in the 1890s and then closed in the 1920s.

The former Inco reopened the mine in the 1970s, and made a deal with KGHM’s predecessor, FNX, in 2002, to take control. A long and thin ore body – about 50 kilometres long – was discovered in 2010, which the company now wants to bring into production.

KGHM estimates the new mine site contains 14.2 million tonnes of resources. The inferred resources include 700 million pounds of copper, 700 million pounds of Nickel and 3.5 million ounces of platinum group elements. “Everybody working on the project is fully confident we have a world-class ore deposit and a very strong business case,” said Eagles.

KGHM’s original plan was to sink two mine shafts at the site – an initial exploration shaft, and a second larger shaft for production – but in the last six to eight months, the company decided instead to go with one larger mine shaft.

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INTERVIEW-Vale’s CEO rules out nickel IPO, writedowns – by Stephen Eisenhammer and Marta Nogueira (Reuters U.K. – February 11, 2015)

http://uk.reuters.com/

Feb 10 (Reuters) – Vale’s chief executive said on Tuesday that a possible initial public offer of part of its nickel division was off the cards for now due to low prices for the commodity, but that other asset sales could be expected over the coming year.

The Brazilian miner is under pressure to resolve a cash-flow squeeze this year as it wrestles to fund mega-projects in the midst of a price slump in its core product: iron ore. But Chief Executive Murilo Ferreira said that the option of spinning off part of its base metals division, which had been outlined in December, was no longer attractive.

“We’re not going to sell it on the cheap … You can forget that possibility,” Ferreira said in an interview at the Rio de Janeiro offices of the world’s largest iron ore producer.

He added that a sale of the entire division was not being considered, and dismissed reports that former Xstrata CEO Mick Davis might be looking to buy it through his startup, X2. “It has been at least two years since I have seen our friend Mick Davis,” he said.

Cash will be raised through other means and Ferreira said the market could expect an announcement of some form of divestment in March and another in the second half of the year. He did not elaborate.

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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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Sudbury needs premier needs to act boldly [turn Laurentian in global Harvard of hardrock mining] – by Stan Sudol (Sudbury Star – February 9, 2015)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Note: this is the second of two parts.

Sudbury: Paris of the Mining World

While I can’t remember who coined the phrase, “Sudbury, the Paris of the Mining World” – I wish I had been that clever – there is an amazing amount of truth to the statement. Obviously, in no uncertain terms, does any part of Sudbury remind anyone – even in a drugged or drunken state – of Paris.

However, my lake-filled, mid-sized hometown does have a wide variety of retail, tourist, educational and other amenities that most tiny isolated mining towns do not and it is located only 400 km north of Canada’s largest city, Toronto.

A few years ago, a colleague who moved from Red Lake to Sudbury almost considered herself in “mining heaven” with the abundance of amenities not found in that tiny gold mining centre.

In addition to the Ontario government’s new differentiation and international student outreach policies, there are many other reasons why all post-secondary mining programs should be relocated to Sudbury’s Laurentian University.

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[Minnesota] Copper/nickel hearing passionate – by Julia Van Susteren (Mesabi Daily News – February 3, 2015)

http://www.virginiamn.com/

Iron Range nonferrous mining issue in St. Paul

ST. PAUL — Proposed copper/nickel/precious mining on the Iron Range, always controversial and stirring strong passions on both sides, once again visited the State Capitol on Tuesday.

Citizens and mining industry supporters all had their say at a Mining and Outdoor Recreation Policy Committee hearing in the Senate Office Building. The small meeting room was crowded wall-to-wall with attendees, including many anti-mining advocates, supporters of nonferrous projects, and even a few interested lawmakers.

Executive Director of MiningMinnesota Frank Ongaro opened the meeting by citing various economic and long-term environmental benefits mining contribute to the state, local communities and the world.

Representatives from PolyMet, which is in the environmental impact statement process in advance of permitting for its project at the former LTV Mining Co. site near Hoyt Lakes, and Twin Metals Minnesota, which is not as far along for their projects near Ely and Babbitt, further testified about the importance of their ventures.

Representatives of various citizens’ groups argued passionately against the proposed mining projects, citing loss of tourism interest, contamination of pristine environments, and loss of personal property.

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Russia’s biggest miner faces Arctic prices challenge – by Polina Devitt (Reuters India – January 30, 2015)

http://in.reuters.com/

NORILSK, Russia – Reuters) – Russia’s financial crisis is posing a stark challenge to the country’s largest mining company. How can Norilsk Nickel protect the living standards of thousands of workers cut off inside the inhospitable Arctic while also satisfying its shareholders?

The slump in the ruble and a resulting rise in inflation could have an outsize effect in Norilsk, a town 300 km inside the Arctic Circle where more than a quarter of the 220,000 population work for the company, and it’s hard to shop around.

Winter temperatures in Norilsk plunge to levels that visitors can find distinctly uncomfortable, but for the isolated workers who live there any hint of a rise in the cost of living is equally unwelcome.

With the rouble down 50 percent against the dollar since early last year and Russian food inflation above 15 percent, it falls partly to the company to bear the cost of holding down prices in the grimy industrial city where it is based.

Norilsk Nickel, the world’s largest producer of nickel and palladium, owns a loss-making chain of seven shops called “Sunflower”, which have sold staples such as milk and bread more cheaply than other stores in the city since 2011.

The company also helps other retailers bring food supplies to the city and subsidizes their transport costs. It increased its workers’ salaries on Jan. 1 and plans another review on April 1, said Vladimir Potanin, chief executive and co-owner.

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