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Change to Vale’s buying scheme makes city more attractive – by Jonathan Migneault (Sudbury Northern Life – December 06, 2013)

http://www.northernlife.ca/

Changes to Vale’s procurement system will result in new jobs and opportunities in Sudbury, said the executive director of the Sudbury Area Mining Supply and Service Association (SAMSSA).

Dick DeStefano, SAMSSA’s executive director, said Vale’s new regional focus on supply and service procurement will improve Sudbury’s reputation as a world-leader for the mining supply and service sector.

“This will attract a number of satellite offices,” DeStefano said, as companies will set up shop in Sudbury to be closer to the buying action. Mining supply and service companies previously had to deal with Vale’s offices in Toronto and Brazil to set up contracts with the mining giant.

But in 2012, Vale started to change its organizational structure, and shifted its gaze to regional markets. “It was about getting more autonomy in the different regions,” Kelly Strong, Vale’s vice-president of Ontario operations, said regarding the shift in focus.

In early 2014 companies in Sudbury will be able deal with Vale employees who handle procurement directly in Sudbury.

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China nickel importers strike term deals with eye on Indonesia ore ban – by Polly Yam (Reuters U.S. – December 5, 2013)

http://www.reuters.com/

HONG KONG, Dec 5 (Reuters) – China’s refined nickel importers are negotiating 2014 term deals with suppliers that give them the flexibility of adjusting shipment volumes depending on how Indonesia’s proposed ban on ore exports turns out.

The Southeast Asian nation has said it will ban unprocessed ore exports from January 2014, but is rethinking it in order to keep export revenues flowing in. On Thursday lawmakers rejected a government bid to water down the planned ban.

A ban on ore exports from next month will boost China’s demand for refined metal by hurting output of cheaper substitute nickel-pig-iron. Higher imports of spot refined nickel by the world’s biggest user of the metal could support global prices that have fallen nearly 20 percent this year.

Some 60 percent of nickel consumption in China is covered by nickel-pig-iron, a low-grade ferro-nickel used for stainless steel production. So widespread is its use now that China has become the world’s biggest and dominant producer of nickel-pig-iron.

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FAQ: Everything you need to know about PolyMet – by Elizabeth Dunbar and Dan Kraker (Minnesota Public Radio – December 2, 2013)

http://minnesota.publicradio.org/features/

What is PolyMet proposing?

PolyMet wants to mine copper, nickel and precious metals for 20 years at a site located just north of Hoyt Lakes in the Superior National Forest. The NorthMet Deposit is part of what is known as the Duluth Complex, which stretches from about 150 miles north of Duluth all the way to the Canadian border. PolyMet would build three open pits and blast and drill to get to the ore containing minerals. Ore would be put in rail cars and shipped seven miles west to an old iron ore processing plant — LTV Steel — which closed in 2001. PolyMet is repurposing the facility to process up to 32,000 tons of copper and nickel per day.

How significant are the deposits?

The Duluth Complex is considered one of the biggest copper-nickel deposits in the world. PolyMet’s mine would tap into just a small part of that, with the possibility of expanding later. PolyMet’s goal is to produce 72 million pounds of copper, 15 million pounds of nickel and 106,000 ounces of precious metals annually.

How does this proposal compare to other copper-nickel mines in the U.S.?

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Mine to inject $4 billion locally [Michigan Upper Peninsula] – by John Pepin (The Mining Journal – December 1, 2013)

http://www.miningjournal.net/

HUMBOLDT – A recent in-house economic report projects the Eagle Mine and Humboldt Mill will directly and indirectly inject a total of $4 billion into the Marquette County economy over a 15-year period.

From 2011 through 2025, the Eagle Mine project -which includes the underground nickel and copper mine in Michigamme Township and the Humboldt Mill processing center in Humboldt Township- is expected to have a total positive economic impact of $4.3 billion on Michigan.

In addition to the $4 billion projected to impact Marquette County, $10 million will benefit Baraga County, $179 million for the rest of the Upper Peninsula and $169 million for the Lower Peninsula. “Marquette County’s economy is expected to be nearly 20 percent greater by 2016 when Eagle Mine’s economic contribution peaks than it otherwise would have been without Eagle Mine,” the report stated.

In addition to the economic forecasting, the “Eagle Mine: Economic Impact Assessment” report -which was produced by former project owner Rio Tinto and released Oct. 17 by new owner, the Toronto-based Lundin Mining Corp.- also provides information on employment, purchase of goods and services, government revenue and risks.

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New [Sudbury KGHM] mine to create 150-300 jobs – by Darren MacDonald (Sudbury Northern Life – November 28, 2013)

http://www.northernlife.ca/

If all goes according to plan, in five years, Greater Sudbury should have a new mine employing 150-300 people. City council approved a plan this week to cost-share $5 million in roads improvements with KGHM International, the company that’s building the mine in Worthington.

In exchange for paying 75 per cent of the cost of improving the four-kilometre road, KGHMI wanted the city to remove road restrictions on Fairbanks and Crean roads so they can haul construction materials in, and, in about five years, ore from the Victoria mine out to be processed.

Mark Frayne, KGHM’s manager of technical services, told councillors Tuesday the company aims to begin full construction in June, a process that would employ about 350 people.

“Once we go into initial stages of production, it will … be about 150 people,” Frayne said. “And if we go into full expansion, if everything is what we think it is, it will go to around 300 people.”

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Vale celebrates Totten Mine startup – by Norm Tollinsky (Sudbury Mining Solutions Journal – December 1, 2013)

Norm Tollinsky is editor of Sudbury Mining Solutions Journal, a magazine that showcases the mining expertise of North Bay, Timmins and Sudbury. This column is from the December, 2013 issue.

Mine of the future brimming with state-of-the-art technology

It’s not every day that a new mine goes into production – not even in Sudbury, one of the world’s most important centres of mineral wealth – but, this month, Vale celebrates the official handover to operations at Totten Mine, 40 kilometres west of downtown Sudbury.

Hailed as “a mine of the future” by Kelly Strong, vice-president of Ontario and UK operations, Totten is brimming with advanced technologies.

“We’re very excited about this being our first new mine in over 40 years,” said Strong. “Totten demonstrates that we have this amazing resource under our feet here. Building Totten through some challenging economic times shows our commitment as a company to Sudbury. “One of the things you see in the mining industry is that the price cycle is shorter than the period of time it takes to complete a project,” noted Strong.

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Thompson’s future looks up as Vale studies mine potential – CBC News Manitoba (November 25, 2013)

http://www.cbc.ca/manitoba/

The northern Manitoba city of Thompson could be home to a new mining mega-development from Vale, which is exploring minerals deep underground.

News of a potential big development is being cautiously welcomed in Thompson, which was devastated by news in 2010 that Vale — the city’s largest employer — would shut down its nickel smelter and refinery there by 2015.

Vale is currently testing ore samples in a project area it calls 1-D, about 3,800 to 4,200 feet underground in the company’s T-3 mine shaft. Preliminary testing in 1-D shows a deposit rich in nickel and copper deposits and also containing some cobalt and precious metals.

Vale says it has been mining in 1-D for years, but officials believe now is the time to dig deeper in an largely untapped section of the deposit extending as much as 6,800 feet underground in some places.

According to the company, geologists have been pulling up core samples containing extremely high-grade nickel. Based on their tests, the geologists believe there are at least 10 million tonnes of nickel present.

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Eramet chief warns of crisis in world nickel market – by Agence France-Presse (Global Post – November 22, 2013)

http://www.globalpost.com/

The chief executive of French mining group Eramet has blamed oversupply in the world nickel market for steep losses at a subsidiary as China ramps up its own production, with little end in sight.

Patrick Buffet said the global overcapacity was causing Societe Le Nickel (SLN), the group’s nickel subsidiary in New Caledonia, to rack up monthly losses of 2.5 billion French Pacific francs ($27 million).

“The crisis in the nickel (market) is very, very intense and nobody expected it to reach such a level,” Buffet told reporters in Noumea on Thursday after a board meeting of SLN, the largest private employer on New Caledonia’s main island of Grande Terre.

The French Pacific territory is home to a quarter of the world’s reserves of nickel, a key ingredient in the manufacture of stainless steel, rechargeable batteries and coins.

Buffet’s warning came after parent group Eramet last month posted a 5.0-percent drop in third-quarter sales to 754 million euros ($1 billion), mainly because of slumping nickel prices.

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Japan’s nickel smelters to be hit hard by Indonesia export ban (Reuters U.S. – November 21, 2013)

 http://www.reuters.com/

TOKYO – Nov 21 (Reuters) – Japanese nickel smelters will be severely impacted by Indonesian bans on exports of unprocessed mineral ores due in January as Japan imports 43 percent of ferro-nickel materials from Indonesia, the head of mining industry body said on Thursday.

With a current account deficit at a near-record high, the Indonesian government is scrambling to ease nationalistic resource rules that were passed more than a year ago, including a ban on mineral ore exports from January 2014.

Southeast Asia’s largest economy is the world’s top exporter of nickel ore, thermal coal and refined tin, and home to the world second-biggest copper mine.

“So far, Indonesia has not come up with any specific actions to ease its new mining law. We are worried about it,” Hiroshi Yao, Chairman of Japan Mining Industry Association (JMIA), told a news conference. “If Indonesia’s export restrictions of unprocessed mineral ore go into effect next year, an impact on Japanese nickel smelters will be big,” he said.

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UPDATE 1-Vale eyes Sudbury deal with Glencore to cut costs (Reuters U.S. – November 7, 2013)

http://www.reuters.com/

Nov 7 (Reuters) – Brazil’s Vale confirmed on Thursday it is in talks with Glencore Xstrata over potential cooperation between the mining groups’ nickel operations in Canada’s Sudbury basin, in an effort to cut costs as prices languish.

Vale said on Thursday it was not planning “a corporate joint venture” in Sudbury, but was looking at other options to join forces in mining, milling and smelting to save cash. Nickel prices have fallen by around a fifth since January and are languishing around four-year lows, weighed down by oversupply.

“We are looking at the synergies now and plan to start negotiating next year,” Vale’s chief executive Murilo Ferreira told analysts in a quarterly earnings call, adding an eventual deal would not involve a full merger.

Reuters reported last month that Glencore and Vale had revived talks over long-debated cooperation in Sudbury, with the companies considering a number of options for their mining and processing operations in the area. Sources familiar with the situation said then that talks were at an early stage.

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Canadian Royalties starts Nunavik production (Nunatsiaq-online – November 6, 2013)

http://www.nunatsiaqonline.ca/

Beleaguered mine says it will begin to generate revenue, pay off creditors starting at month’s end

Canadian Royalties Ltd. has shipped its first load of copper concentrate from its Nunavik Nickel project, the company said in a Nov. 5 news release.

That signals a new beginning for the beleaguered mine, which struggled to get operations up and running while owing more than $50 million to its creditors.

“We are very pleased that CRI has achieved the significant milestone of producing and shipping saleable concentrate,” said the company’s acting chief executive officer Parviz Farsangi Nov. 5. “As discussed with many of our suppliers, CRI will begin to generate revenue in less than a month from the sale of the concentrate and will be making payments as committed to all of its suppliers.”

After sinking $735 million into infrastructure, Jien Canada Mining Ltd., the Chinese company that took over Canadian Royalties several years ago, had planned to ramp up production in early 2013, training and hiring more Nunavik workers.

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NEWS RELEASE: Royal Nickel to Capitalize on Upcoming Global Nickel Shortage

Fri, 25 Oct, 2013

(Vantagewire.com) – A very real structural shortage of nickel is coming in the second half of this decade. Nickel prices already spiked in 2006 and 2007, when the world ran into a similar structural shortage in supply. Now there’s plenty of reason to believe that we could be in for another one of those periods in the second half of the 2010s.

Beyond 2015, it’s believed that growing global demand will require over 500kt of new supply to meet the world’s needs. However, the “project cupboard” to meet this demand is almost bare. With not enough projects on deck, the world’s nickel markets will be challenged to overcome several years of under investment in new supply.

Among the few projects that look to be coming into stride when this supply differential truly hits is located in Quebec’s prolific Abitibi mining district. The Dumont nickel project, owned by Royal Nickel Corporation [TSX: RNX], is one of the world’s largest undeveloped nickel sulphide projects and could be around just in time as supply shortages start hitting their peak.

Royal Nickel and its Dumont project look to be one of the frontrunners to address the upcoming nickel shortage. Stacked with experienced senior management largely from Inco (former Canadian nickel producer taken over by VALE in 2006), Royal Nickel is capable of handling a project of this magnitude.

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Nickel Glut Extends to Fourth Year on China Supply: Commodities (Washington Post/Bloomberg News – October 21, 2013)

http://www.washingtonpost.com/

Oct. 21 (Bloomberg) — The global glut of nickel will extend into a fourth year in 2014 as new technology lowers costs for Chinese furnaces producing record amounts of a lower-grade substitute that helped drive prices into a bear market.

Chinese producers will supply 456,000 metric tons of nickel pig iron in 2014, or 49 percent more than last year, Morgan Stanley estimates. Costs at their rotary kiln electric furnaces more than halved to $11,000 a ton in five years, according to Beijing Antaike Information Development Co. That implies they’re still profitable even after prices slumped 16 percent since the start of 2013, reaching a four-year low of $13,205 in July.

China expanded NPI output from 3,000 tons in 2005 to make the stainless steel needed for its construction boom after costs for pure nickel reached a record $51,800 in 2007. While slumping prices previously shut furnaces in China and curbed excess supply, the new technology means they can now compete with traditional refineries. The cumulative surplus since 2007 will have reached about 589,000 tons by the end of 2014, or almost four years of U.S. demand, Morgan Stanley says.

“Most traditional nickel producers cannot compete on price and are having to close or scale back operations,” said Gavin Wendt, the founder and senior resource analyst at Sydney-based Mine Life Pty., who has followed the mining industry for more than two decades.

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Nickel Reaches 9-Week High as Export-Ban Prospect Spurs Buying – by Joe Richter (Bloomberg News – October 22, 2013)

http://www.bloomberg.com/

Nickel jumped to a nine-week high in London as investors purchased the metal to close out bets on mounting concern that ore exports will be halted next year from Indonesia, the world’s largest producer.

A government ban on shipments from Indonesia of ores including bauxite, used to make aluminum, and nickel may take effect next year to aid local processing. Nickel got a boost from investors who bought the metal to liquidate bets on lower prices, according to Citigroup Inc. Prices have tumbled 13 percent this year, the most among the six main metals traded on the London Metal Exchange.

There is “growing nervousness about a potential export ban on Indonesian ores that kicks in at the beginning of the new year,” Edward Meir, an analyst at INTL FCStone in New York, said in a report.

Nickel for delivery in three months climbed 3.4 percent to settle at $14,850 a metric ton at 5:51 p.m. local time on the LME. Prices reached $14,880, the highest since Aug. 19.

The metal slumped this year as stockpiles tracked by the LME expanded to a record, reaching 231,480 tons today, according to daily exchange data. Open interest, or the number of futures outstanding, fell 4.9 percent last week from a record on Oct. 11.

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Is BHP looking to escape the nickel market? – by Ryan Newman (The Motley Fool – October 18, 2013)

http://www.fool.com.au/

BHP Billiton’s (ASX: BHP) rivals are once again suspecting that the miner could be on the move to offload its largest nickel assets as part of its strategy to heavily reduce costs and increase its focus on core operations.

As reported by The Australian Financial Review, it is believed that the miner had placed its Nickel West and Cerro Matoso mines up for sale earlier in the year. This belief was bolstered when the company’s new CEO, Andrew Mackenzie, notably excluded nickel from his “four pillar” strategy in May, which outlined the company’s core operations and focus areas moving forward.

Speculation has once again heightened that the sale of the assets could be a very real possibility – particularly after the company was forced to impair its Nickel West asset by US$1.2 billion, according to BHP’s annual report.

Meanwhile, many believe that right now could be the bottom of the nickel market which would increase the interest in BHP’s assets. Whilst now may not prove to be the most profitable time to part ways with the mines, it would allow the miner to focus more heavily on reducing operating costs and increasing productivity in other key areas.

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