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Activist investor George Armoyan calls for ouster of Sherritt CEO – by Peter Koven (National Post – April 10, 2014)

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

TORONTO – Activist investor George Armoyan has called for the chief executive of Sherritt International Corp. to be fired, raising the animosity between the two sides ahead of a scheduled proxy showdown at next month’s annual meeting. In a circular filed Wednesday, Mr. Armoyan revealed he has been pushing Sherritt to replace CEO David Pathe with a “qualified executive who has operating experience.”

“The guy is not an operator; he’s not a leader. He was just put in there by default,” Mr. Armoyan, the CEO of Clarke Inc., said in an interview. He added that some Sherritt insiders, including former directors, have indicated to him that there is a vacuum of leadership at the company.

He said he has nothing against Mr. Pathe, but simply does not think he is CEO material. He noted that Mr. Pathe was an associate lawyer on Bay Street who joined Toronto-based Sherritt as assistant general counsel in 2007. He kept getting promoted, and six years later he was CEO. In Mr. Armoyan’s mind, he is not qualified to lead a mining company and Sherritt could recruit a much stronger candidate.

Sherritt did not comment on Mr. Armoyan’s plan to replace Mr. Pathe, but did state that the activist has not provided “any alternative to Sherritt’s current strategic plan or any credible ideas to increase shareholder value.” Both sides have said they are committed to cutting costs and reducing debt.

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UPDATE 2-Russia’s Norilsk sees nickel price recovery in 2014 – by Polina Devitt (Reuters U.S. – April 7, 2014)

http://www.reuters.com/

MOSCOW, April 7 (Reuters) – Norilsk Nickel, the world’s biggest producer of nickel and palladium, sees nickel prices recovering this year, it said on Monday after reporting a 64 percent drop in net profits due to write-offs.

The Russian firm, part owned by Chief Executive Vladimir Potanin and aluminium giant Rusal, had to trim spending last year and focus on its lucrative Soviet-era operations in Russia’s far north to cope with weak prices for its key metals.

“Last year was a challenging and volatile year in commodity markets with prices for the majority of metals in the Norilsk Nickel portfolio declining that had a clear impact on our top-line performance,” Potanin said in a statement.

The management is cautiously positive on 2014 with improving commodity prices in the beginning of the year but is also concerned over a deteriorating emerging market risk appetite in the global investment community, he added. Norilsk has not been hit by the political tension over Ukraine so far, but all Russian companies would suffer should the situation escalate, its deputy chief executive, Andrei Bougrov, said last week.

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UPDATE 1-BHP Billiton weighs spin-off of unloved assets – by Sonali Paul (Reuters U.K. – April 1, 2014)

http://uk.reuters.com/

MELBOURNE, April 1 (Reuters) – BHP Billiton is weighing a range of options to simplify its portfolio of assets, including a possible spin-off of unwanted businesses such as aluminium and nickel into a separate company, the top global miner said on Tuesday.

“We continue to actively study the next phase of simplification, including structural options, but will only pursue options that maximise value for BHP Billiton shareholders,” the company said in a statement.

Chief Executive Andrew Mackenzie has said over the past year that the company plans to focus on its large iron ore, copper, coal and petroleum businesses, while selling off smaller, less profitable operations.

The company’s statement on Tuesday came shortly after The Australian Financial Review newspaper reported that BHP was considering spinning off non-core assets into a separate company, offering shares to existing shareholders.

BHP shares rose as much as 2.2 percent to a three-week high after the report. They last traded up 1.7 percent at A$37.10 in a weaker broader market. Spinning off a company with non-core assets would allow BHP to pare down at a time when it may be difficult to find buyers willing to pay a good price. It could also help flush out a buyer.

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Mine promises hope for Thompson – by Jonathon Naylor (Brandon Sun – March 27, 2014)

http://www.brandonsun.com/

THOMPSON — As one door closes, will another open? That’s the fundamental question facing this hearty northern mining city.

Nickel giant Vale’s announcement that it will shut down its smelter and refinery at the end of 2014 (later revised to the end of 2015) raised grim speculation about Thompson’s future. But overlooked is the fact that while those surface operations are nearly tapped out, Vale is concentrating on its subterranean prospects.

“Our recent exploration activities have focused on increasing the confidence of near-infrastructure reserves and resources with the goal of maintaining current production levels from our existing mines,” says Ryan Land, the personable manager of corporate affairs for Vale’s Thompson operations. “This strategy will continue in the near term, and will be re-evaluated on an ongoing basis in response to nickel market conditions.”

Not only does Vale still run three Thompson-area mines — T-1, T-3 and Birchtree — there remains the irresistible promise of a fourth, known as 1-D, a $1- billion-plus mega-development.

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Stars Aligned for Nickel Bull Market – by Tim Maverick (Wall Street Daily – March 27, 2014)

http://www.wallstreetdaily.com/

Russian President Vladimir Putin’s actions have certainly stirred the pot in the energy market, as our Investment Director, Karim Rahemtulla, recently pointed out. And now, the ripples have spread far beyond the energy market to other commodity markets.

You see, the threat of Western sanctions against Russia has put renewed focus on a base metal that’s been in the doldrums for years… nickel.

That’s because the world’s largest producer of the metal, which is used to make stainless steel and nonferrous alloys, happens to be Mother Russia’s Norilsk Nickel (NILSY). NILSY mines a whopping 17% of the world’s nickel each year. Sanctions against such a huge source of nickel would indeed be a big deal, and share prices are reacting accordingly.

Nickel is suddenly in bull market mode, and prices recently hit their highest level since April at $16,230 per metric ton on the London Metals Exchange (LME). That represents a gain of more than 20% since nickel’s low on January 9, at $13,334 per ton, and meets the technical definition of a bull market.

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NEWS RELEASE: Royal Nickel Welcomes Construction of World’s First Processing Plant Capable of Producing Stainless Steel Directly Utilizing Nickel Sulphide Concentrate

Leading Chinese Stainless Steel Producer Tsingshan Expects to Bring Plant into Operation in 2014

Follows Strategic Alliance between Tsingshan and Royal Nickel

TORONTO, March 24, 2014 /CNW/ – Royal Nickel Corporation (TSX: RNX) (“RNC”) is pleased to report that Tsingshan Holding Group (“Tsingshan”), a party with whom RNC entered a strategic alliance in March 2013, is currently constructing the world’s first integrated nickel pig iron (“NPI”) plant to utilize nickel sulphide concentrate as part of the stainless steel production process. The plant is expected to begin operation within this year.

This significant innovation represents the first time that nickel sulphide concentrate will be directly used to create stainless steel. This innovation offers significant potential benefits to the producers of suitable nickel sulphide concentrate feed including lower costs due to simpler processing compared to traditional smelting and refining, and greater flexibility for more potential partners and customers. This plant is also expected to be possibly capable of handling nickel sulphide concentrate anticipated to be produced from RNC’s Dumont Nickel Project (“Dumont”).

Mark Selby, Interim President and CEO, commented, “The Tsingshan plant in China is an industry first and a positive development for projects such as Dumont.

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INSIGHT-Russia’s leading role in the Indonesian mining revolution – by Randy Fabi and Fergus Jensen (Reuters U.S. – March 23, 2014)

http://www.reuters.com/

JAKARTA, March 24 (Reuters) – Russia’s two metal giants have emerged as big winners from Indonesia’s new mining law, after leading a drive to get Jakarta to stick to its controversial mineral ore export ban in the face of opposition from miners and Asian buyers.

In its six-month lobbying campaign last year, United Company Rusal and Norilsk Nickel delivered a blunt message to Indonesian officials: We will only invest billions of dollars in smelters if you ban bauxite and nickel ore exports.

The effort seemed to have paid off, despite a denial by Indonesia that it was influenced. When the law came into effect this year, Indonesia enforced a water-tight export ban for only two major minerals – nickel ore and bauxite.

The halting of $3 billion of annual nickel ore and bauxite exports has already lifted the price of nickel and helped support aluminium, boosting the fortunes of Rusal and Norilsk, the world’s top aluminium and nickel producers, respectively.

At the same time, it has strengthened the case for the pair to invest billions of dollars in Indonesia to build smelters to replace costly capacity in Russia, a key part of a recovery plan for struggling Rusal and in line with Indonesia’s own aims to earn more from its minerals resources.

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Top Ten Mining Events in Northern Ontario History – by Stan Sudol (March 22, 2014)

This column was also published on the Huffington Post – the “New York Times” of the web: http://www.huffingtonpost.ca/stan-sudol/ontario-mining_b_4885841.html

Klondike Versus Northern Ontario

For crying out loud, I continue to be astonished with our collective Canadian obsession over the Klondike Gold Rush while northern Ontario’s rich and vibrant mining history is completely ignored by the Toronto media establishment, especially the CBC.

Discovery Channel’s recent six-hour mini-series on the Klondike – vaguely based on Charlotte Gray’s book, “Gold Diggers: Striking It Rich in the Klondike – once again highlighted this glaring snub.

Unfairly, the Klondike did have the benefit of terrific public relations due to famous writers like Jack London, Robert W. Service and Pierre Berton, but I still don’t understand how this brief mining boom continues to dominate the “historical oxygen” in our national psyche.

At its peak, the Klondike only lasted a few years – 1896-1899 – and produced about 12.5 million ounces of gold. And unlike the California gold rush that created one of the largest and richest states in the union, the entire Yukon Territory’s population today is about 36,000. Contrast that with booming Timmins with 45,000 hardy souls who have dug out of the ground about 68 million ounces and counting of the precious metal, since the Porcupine Gold rush of 1909.

It’s enough to make to make Benny Hollinger, Jack Wilson and Sandy MacIntyre – the founders of this extraordinary deposit – spin in their collective graves!

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NEWS RELEASE: FEDNAV BRINGS NEW ICEBREAKER TO THE CANADIAN ARCTIC

Montreal, March 20, 2014 – Fednav announces the arrival in Canada of its latest, highly specialized icebreaker, the MV Nunavik. Built at JMU’s Tsu Shipyard in Japan, the ship will be used to export the concentrates produced at the Canadian Royalties owned Nunavik Nickel mine at Deception Bay in northern Quebec. The vessel will also supply the mine with equipment and fuel, year round.

Rated Polar Class 4, the Nunavik is the most powerful bulk-carrying icebreaker in the world. It is similar in design to the Umiak I, the Fednav ship servicing Vale’s Voisey’s Bay operation in Northern Labrador. The Nunavik will sail unescorted in Arctic regions and will operate in the extreme winter conditions of the Canadian Arctic. It is capable of maintaining continuous progress of 3 knots in 1.5 m of ice.

The vessel was designed by Fednav and JMU, and will sail between Deception Bay and Northern Europe on a year-round basis. The engine produces 29,600 hp, three times the power of a conventional bulk carrier of the same size. The Nunavik will be supported by Enfotec Technical Services, a Fednav subsidiary to provide up to date information on ice conditions as well as technical support to the inhouse IceNav navigation system.

The Nunavik is equipped with the latest environmental technologies, such as a Tier II engine that reduces nitrogen oxide emissions by 20%, and the first ballast treatment system installed on a Canadian-owned vessel.

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PRESS RELEASE: Jinchuan International (02363.HK) Announces Annual Results for the Year Ended 31 December 2013

Revenue Increased by 21.2% to Approximately US$742.2 million

Profit Attributable to the Owners Increased approximately 354.7% to Approximately US$203.9 Million

Hong Kong, Mar 20, 2014 – (ACN Newswire) – Jinchuan Group International Resources Co. Ltd (the “Company”, together with its subsidiaries, collectively referred to “the Group” or “Jinchuan International”, Stock Code: 2362) today announced its annual results for the year ended 31 December 2013 (the period under review)*. For the year ended 31 December 2013, the Group’s revenue amounted to approximately US$742.2 million (2012: US$612.2 million), representing a significant increase of approximately 21.2%. This increase in revenue was due to the Group’s increased sales of copper from its operating mines and also the increase in trade volume from its international trade. Profit attributable to the owners of the company increased for approximately 354.7% to approximately US$203.9 million. Basic earnings per share was US cents 4.69 (2012: US cents 1.05 ). The Directors do not recommend final dividend for the year ended 31 December 2013.

Mr. Yang Zhiqiang, the Chairman of Jinchuan Group and the Chairman of the Board of the Directors and Chief Executive Officer of Jinchuan International said, “2013 was a landmark year for the Group’s transformation into a global metal mining company. To in line with the Company’s strategy to transform its business to the mineral and metal resources sector, the Group had completed acquisition from Jinchuan Group of a high grade copper and cobalt mining asset in Africa and had achieved turning its core business into a pure mining play, with its growing international metal related trading to support a steady revenue stream for the Group. The Group will continue to maintain high profitability through competitive differentiation strategies of copper business, to further optimize market segment and to broaden the scope of application of special copper metal.”

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Nickel Enters Bull Market as Supply Concerns Mount After Crimea – by Maria Kolesnikova (Bloomberg News – March 18, 2014)

http://www.businessweek.com/

Nickel entered a bull market on speculation Russian supplies will be disrupted at a time when some shipments are already banned in Indonesia.

Last year’s worst performer among industrial metals trading on the London Metal Exchange is this year’s best, gaining 16 percent and on track for the first annual gain since 2010. Prices fell 24 percent in 2011 after touching $29,425 a metric ton in February that year, the highest since April 2008. Indonesia, the biggest producer of mined nickel, banned ore exports in January.

The U.S. and the European Union slapped sanctions on Russia after a disputed vote in Crimea paved the way for President Vladimir Putin to annex the region from Ukraine. Russia’s OAO GMK Norilsk Nickel is the world’s biggest producer of the metal used to make stainless steel. The price reached a record $51,800 in May 2007.

“Nickel has enjoyed the support from expectations that a potential supply deficit is building,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “Nickel suffered some of the biggest losses since the peak in 2011, and on that basis, many funds may view the upside potential as quite significant.”

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Nickel prices affected in wake of Ukraine-Russia crisis – by (CBC News Sudbury – March 18, 2014)

http://www.cbc.ca/sudbury/

A recent upswing in nickel prices is being attributed to Russian President Vladimir Putin’s policies towards Ukraine — and the threat of international sanctions against the Putin regime could have big ramifications for the commodity.

Monday’s sanctions by Canada and the United States were mostly aimed at individuals, but some observers suspect Russia’s nickel exporters, and other industries, will be next on the list.

Sudbury representatives for nickel mining companies like Vale declined a request for comment, but analyst Donald Rumball, a Toronto-based analyst who studies the Sudbury mining market, said the price fluctuation probably won’t last.

“Well, the problem with sanctions is very porous,” he said. “If Russia was stopped from selling nickel, what would stop it from selling to China and Indonesia and Vietnam and who else.”

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World Bank scornful of Indonesia’s mineral ore ban – by Jonathan Thatcher (Reuters India – March 18, 2014)

http://in.reuters.com/

JAKARTA – (Reuters) – The World Bank delivered a blunt assessment of Indonesia ban on mineral ore exports on Tuesday, warning that it would hit trade and government revenue and risked undermining already weak investor sentiment towards Southeast Asia’s biggest economy.

Implemented in January, five years after the law was initially passed, the ban has been met with confusion in the mining sector.

It was introduced to encourage mineral processing in Indonesia in order to increase the value of exports. But, one group of mining companies has mounted a legal challenge, warning that the ban on exports will force them out of business.

“The long term gains are at best uncertain,” Jakarta-based World Bank economist Jim Brumby said, adding there were no success stories elsewhere in the world where countries had tried to impose similar bans.

Brumby was speaking at the launch of the Bank’s quarterly economic report. The World Bank estimated that for the period 2014-2017, the negative impact on net trade could be $12.5 billion because of the loss of export revenue while capital goods imports, to build smelting capacity, will have to rise.

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Nickel’s run rekindles sale hope – by Barry Fitzgerald (The Australian – March 17, 2014)

http://www.theaustralian.com.au/business

SURGING nickel prices have boosted interest in a planned sale by Chinese-controlled MMG of its mothballed Avebury nickel mine on Tasmania’s west coast, which was developed at a cost of $880 million.

Nickel’s price surge — brought on by Indonesia’s export ban on laterite nickel ores — has already prompted BHP Billiton to put out the feelers on a sale of its West Australian nickel business, valued at up to $1 billion, because of the strategy of chief executive Andrew Mackenzie to focus on the “four pillars” of iron ore, coal, copper and petroleum.

Unlike the rest of the metals, nickel has started the year strongly, rising 13 per cent to a 12-month high of $US7.14 a pound. The rise for the stainless steel ingredient is a response to the tightening in supplies caused by Indonesia’s mineral ore export ban taking effect in mid-January.

The ban is an attempt to compel more value-adding to Indonesia’s mineral exports through the development of onshore processing operations. The country is the world’s biggest exporter of nickel and is the main supplier of low-grade nickel laterite ores to China’s nickel pig iron industry.

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BHP workers brace for uncertainty – by Neale Prior (The West Australian – March 10, 2014)

http://au.news.yahoo.com/thewest/

Nickel West workers are bracing for a year of uncertainty as mining giant BHP Billiton embarks on a formal campaign to sell the underperforming mining and processing wing.

After slashing the book value of the operation by $US1.6 billion, BHP is believed to have appointed international investment bank Goldman Sachs to find a buyer.

The Goldman Sachs appointment leaked over the weekend via The Australian Financial Review after speculation building out of London last week that BHP was offloading its WA poor relation.

The nickel arm has been starved of capital and sits outside BHP’s favoured areas of iron ore, coal, petroleum and copper.

The sale push puts the jobs of up to 2000 employees and contractors in play and fans fears that BHP could close all or part of the division if it cannot reach acceptable sales terms.

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