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Nickel

[Minnesota] Iron Range’s copper-nickel mining poses opportunity and possible threat – by Dan Kraker (Minnesota Public Radio – March 26, 2013)

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

HIBBING, Minn. — After more than a century in which iron mining has played a central role in the economy and culture of northeastern Minnesota, a new kind of mining is poised to join the taconite industry.

Generally known as copper-nickel mining, for the two main metals companies want to extract, the process is hailed for bringing much-needed jobs to the region. But opponents prefer to call it “sulfide mining,” for the kind of ore the metals are found in — and because unearthing sulfide can cause toxic water pollution.

It’s a matter of mere geologic chance that northeast Minnesota could hold world-class deposits of both iron ore and copper and nickel.

Geologists have determined the Iron Range formed in what had been a tropical sea two billion years ago. The Duluth Complex, where most of the copper-nickel deposits lie, took form nearby a billion years after that, when North America tried to split apart near present day Lake Superior.

Those deposits formed when molten rock deep in the earth called magma encountered rocks containing sulfur, said University of Minnesota – Duluth geologist Jim Miller.

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‘There will be more nickel needed’ – by Carol Mulligan (Sudbury Star – March 21, 2013)

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

There’s good news and bad news emerging from China when it comes to nickel production, says a mining analyst with a keen interest in Sudbury.

The bad news is Chinese nickel production is at a record high as the country imports cheap sources of laterite and converts it into low-percentage nickel, said Terry Ortslan. “Nickel pig iron (NPI) production we speak,” said the Montrealbased analyst. “And it’s not any mom and pop operation. It’s been very sophisticated, high-technology operations with big furnaces, and serious investments have gone into it.” The good news is the nickel being made in China is costing $6 or $7 a pound because of the cost of power to convert the ore and the cost of raw materials.

Because of the amount of stainless steel needed for expansion and development in China, nickel pig iron can only “contribute so much nickel to the whole equation. There will be more nickel needed in China and elsewhere,” and that could benefit Canadian producers such as Vale, said Ortslan. He has long been outspoken about the high cost of capital and operating costs at nickel operations in Sudbury, “but what we’re seeing now with the Chinese costs is they aren’t very low, as well,” he said.

That causes Ortslan to speculate on the need for “major expansion plans in the traditional areas” such as Sudbury where nickel is produced. Vale Ltd. has been focused on cutting costs at its operations around the world, including Canada, laying off 30 non-union employees this week in the latest round of belt-tightening.

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Australian Nickel: a short history – by Simon Cowling* (Australian Government Bureau of Resources and Energy Econmics – March Quarter 2013)

Click here for the original with graphs and charts (pages 114-123): http://www.bree.gov.au/documents/publications/req/REQ_MAR2013.pdf

Nickel, through its various uses, plays a large part in the development of capital infrastructure in economies worldwide. Due to its resistance to corrosion, nickel is primarily used in the production of stainless steel and alloys which are an integral ingredient for many infrastructure projects. To a lesser extent, nickel is also used in the production of nickel-metal hydride rechargeable batteries and electroplating other metals, such as steel for uses in construction and automotive purposes.

Australia is one of the largest nickel suppliers to the world market. The establishment of Australia’s nickel industry, however, has not been straight-forward and the industry has faced numerous challenges. The nickel market is characterised by extreme volatility evidenced by large and rapid swings in demand, production and, ultimately, prices. This review provides an overview of how key events in nickel markets since the 1960s have affected the development of Australia’s nickel industry.

The early days—pre-1965

The Australian nickel industry first emerged at the start of the 20th century with mining starting at the Zeehan field in western Tasmania in 1910. This followed the development of technologies that employed nickel as an alloying agent in steel towards the end of the 19th century (Mudd 2010) Between 1910 and 1938, approximately 568 tonnes of Nickel was intermittently produced from nickel copper sulphide ore extracted from the Five Mile group of mines in Tasmania (Mudd 2007).

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High-achieving First Quantum chief Philip Pascall keeps a low profile – by Matt Chambers (The Australian – January 26, 2013)

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

WHEN the publishers of the Harvard Business Review this month said Origin Energy’s Grant King, at number 88, was the only one of its top 100 global chiefs of 2013 based in Australia, it wasn’t quite right.

Ten spots ahead of the Origin boss, at number 78, is an intensely private mining chief executive and chairman who has built an African-focused $10 billion copper miner from an office in Perth.

From the same office he is now trying to turn his company into a top-five global copper miner through a hostile $C5.1bn ($4.9bn) takeover of Canada’s Inmet.

The man is Zimbabwe-born Philip Pascall, whose 1.3 per cent stake in the copper miner he co-founded is now worth about $120m. The company is the Canadian-listed First Quantum Minerals, whose original shareholders have seen the company grow by $US9bn under Pascall’s tenure and, according to HBR, had total returns of about 2000 per cent in that time.

HBR listed Pascall’s location as Vancouver. But the technical base of First Quantum is West Perth, where the respected process engineer and fellow founder Martin Rowley — a former Bond Group executive — are based.

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COLUMN-Nickel, an old-fashioned story of boom and bust by Andy Home (Reuters – March 1, 2013)

http://uk.reuters.com/

(Andy Home is a Reuters columnist. The opinions expressed are his own)

LONDON, March 1 (Reuters) – Remember the commodities super-cycle?

That wonderful all-embracing bull narrative of structural step-change in commodities demand coupled with “stronger for longer” pricing? It was good while it lasted.

But as mining companies write down the mega investments predicated on that “stronger for longer” bit and shareholder pressure for returns rather than volumes forces a mass changing of the guard in the sector, the super-cycle seems set to go the way of other deflated grand ideas. File between dot-com revolution and great moderation.

Yet, it was always a problematic construct. Consider the example of nickel.Structural step-change in demand led by China? Tick.

Chinese production of stainless steel, the largest component of nickel usage, boomed by 27-28 percent per year over 2009-2010, according to figures from the International Stainless Steel Forum.

Stronger for longer pricing? Nope. Nickel prices peaked in 2007 and have never looked close to reaching those lofty heights again.

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Big change needed to save [Australian] nickel producers – by Sarah-Jane Tasker (The Australian – February 25, 2013)

http://www.couriermail.com.au/

THE majority of Australia’s nickel producers continue to struggle to turn a healthy profit, and analysts say there is little relief in sight unless there is a fundamental change, such as BHP Billiton closing its West Australian operations.

While BHP has no plans to close its Kambalda nickel west operations, market observers say it would take that level of industry event to provide any relief to the sector this year.

“BHP doesn’t have to run loss-making operations,” one respected mining analyst said. “They are a 100,000-tonne producer, so it’s a big change for the nickel market if its operations are put on care and maintenance. That would materially change the outlook for the nickel market and could aid the juniors.”

BHP reported last week that underlying earnings before interest and taxes for its aluminium and nickel division had fallen $US219 million ($213m) to a loss of $US285m for the first half.

Western Areas, Australia’s lowest cost producer, reported on Friday a sharp fall in its first-half profit on the weaker nickel price and on the back of a non-cash impairment charge.

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BHP eyes $3.9bn nickel float – by Barry Fitzgerald (The Australian – February 26, 2013)

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

BHP Billiton has cranked up the potential for a $US4 billion ($3.89bn) spin-off of its ailing nickel division by making a big high-grade nickel discovery near its Perseverance mine at Leinster, 375km north of Kalgoorlie in Western Australia.

Industry circles have been buzzing about the new find, which BHP has called Venus after the brightest planet visible to the naked eye. It follows last year’s big nickel-copper Nova discovery in WA by Mark Creasy’s Sirius, the brightest star.

BHP yesterday would not be drawn on the scale of the Venus find, saying that the prospect was still in its early stages of delineation and development, so no guidance on reserves could be given.

However, the company also said that at this early stage, Venus had the potential “to reshape the profitably and direction of the Nickel West business”.

“Venus’s key attributes — mainly its high nickel grades and proximity to existing mining infrastructure — give it clear potential to materially increase Nickel West’s mining inventory and reshape the profitably and direction of the Nickel West business,” BHP told The Australian.

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Rio Tinto delays [U.S. Eagle nickel mine] production because of falling market prices – by John Pepin (The Mining Journal – February 20, 2013)

http://www.miningjournal.net/

HUMBOLDT – Rio Tinto officials said Tuesday they plan to shift first production of nickel and copper at the company’s Eagle Mine and Humboldt Mill to the second half of 2014.

Rio Tinto spokesman Dan Blondeau said Tuesday an aggressive construction season had been planned for this year and production was initially slated for early to mid-2014, but the decision has now been made to “moderate” the pace of construction in response to “economic headwinds” and volatility in commodities markets.

“We’re not the only ones going through this tightened schedule, it’s across the industry,” Blondeau said. “Everyone is taking a more disciplined approach in where they’re spending their money and where they’re getting their capital.”

Construction at the mine is 80 percent complete, with the project overall – including the Humboldt Mill – about half done. “A lot of work this coming year was going to be at the mill,” Blondeau said. Any current construction work will be completed, but new construction will be rescheduled.

Blondeau said a primary objective will be to minimize any impacts of the new schedule to company staff. Even with the decreased construction efforts, Rio Tinto will continue to spend about $10 million each month on the mine and mill projects.

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The Duluth [nickel/copper/PGMs] monster – by John Chadwick (International Mining – February 2013)

http://www.im-mining.com/

John Chadwick looks at the Duluth Complex and in particular the leading positions of PolyMet and Duluth Metals. Duluth has described the complex as holding “one of the world’s largest undeveloped strategic metals deposits of it’s kind”

Duluth Metals massive potential in Minnesota was described in the December 2012 Leader. Let’s take a more detailed look at what is there. The industry has perhaps not yet realised the magnitude of the work being done and discoveries made by Duluth Metals here.

Duluth Metals’ strategy is to “systematically explore and develop copper-nickel-PGM deposits in the north of the US State of Minnesota.” With its partner Antofagasta (which holds 40%, with Duluth holding 60%) it is progressing Twin Metals Minnesota’s project through feasibility into production.

Twin Metals is focused on three deposits, Spruce Road, Maturi and Birch Lake (running northwest to southeast) in the northern part of the Duluth Intrusive Complex. These deposits are located in a zone of copper-nickel-PGM mineralisation occurring near the base of the complex at depths of 130 m to 1,300 m. Bechtel will deliver a very detailed prefeasibility study (enabling fairly quick progress to a BFS) in 2014. Bechtel Engineering was instructed to prepare the NI-43-101 PFS on the Twin Metals (formerly known as Nokomis) project based on the following parameters:

■ A vertically integrated mining complex

■ Large scale phased underground mine plan and development

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Norilsk Nickel: A mainstay in mining – by Will Daynes (Business Excellence – January 30, 2013)

 Business Excellence is a global on-line publication portal for businesses who have stories of excellence to tell: http://www.bus-ex.com/

Mining has been a part of life in the Norilsk area since the 1920s, during which time the seeds were sown for what would become a lucrative industry for the region and Russia as a whole over the course of the subsequent century. It was in 1935 that the government of the USSR created the Norilsk Combine and 1943 that Norilsk managed to produce an annual total of 4000 tonnes of refined nickel, before hitting its target figure of 10,000 tonnes just two years later in 1945.

In the aftermath of the fall of the Soviet Union a joint-stock company was created in 1993, taking the name RAO Norilsk Nickel. By 1997, the company had been sold to private enterprise Interros and had returned to profitability. In the years since, Norilsk has gone on to successfully acquire a host of mining and metallurgical assets across the world, thus transforming itself into a multinational organisation with operations in Russia, Finland, Australia, Botswana and South Africa.

Today, MMC Norilsk Nickel is the world’s largest producer of nickel and palladium, and one of the leading global producers of platinum and copper. In addition, it also produces various by-products such as cobalt, chromium, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium and sulphur. “Our production assets,” explains director of foreign assets, Roman Panov, “are located in five countries, Russia, Finland, Australia, Botswana and South Africa, across which we mine over 30 million tonnes of ore and produce almost 300,000 tonnes of nickel. The latter figure represents a fifth of the world’s total nickel production.”

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Excerpt from “The History of Mining: The events, technology and people involved in the industry that forged the modern world” – by Michael Coulson

To order a copy of The History of Mining please click here: http://www.harriman-house.com/products/books/23161/business/Michael-Coulson/The-History-of-Mining/

THE AUSTRALIAN NICKEL BOOM

The Australian mining boom of the late 1960s was given the generic title of the nickel boom, although it can be argued that nickel was, in economic terms, a relatively minor part of a period of exploration and new discoveries that saw the genesis of the giant iron ore industry in the northern part of Western Australia and the discovery of uranium in the Northern Territories.

In terms of nickel there were three major events – the discovery of nickel by Western Mining at Kambalda in Western Australia in 1966, the sensational but ultimately disappointing Poseidon discovery at Windarra to the north of Kambalda in 1969, and in 1971 the Selection Trust group’s Agnew nickel discovery, which was further north still.

A FINANCIAL EVENT

Although Australia had spawned a number of mining booms in its past, the 1960s boom at times was as much a financial event as a mining event. As far as stock market activity was concerned, the surge of interest in Australian mining shares followed an extended worldwide boom in industrial, technology and financial shares, and was symptomatic of an era when confidence was high and investors, buoyed by profits elsewhere, were in the mood for speculation.

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Vale cut not ‘fatal’ to city’s economy – by Harold Carmichael (Sudbury Star – January 12, 2013)

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

Vale’s decision to cut in half the proposed $2 billion it would spend on a massive pollution-reduction project at the Copper Cliff Smelter site will affect local mining supply and service companies, but it’s not a fatal blow, says Dick DeStefano.

DeStefano, executive director of the Sudbury Area Mining Supply and Service Association, said local companies had about a 25% of Vale’s Clean Atmospheric Emissions Reduction project, which will now cost $1-billion. The members reaction, he said, is the work will be made up somewhere else.

“I haven’t heard one complaint because they made a business decision,” said DeStefano. “No one has called me up saying ‘I am losing a pile of money.’ Our guys are saying ‘let’s move on. There are other markets in other places. If we don’t see it here, there are others. We have to live with it.’”

DeStefano said the good news Thursday is the increased push to develop the Victor-Capre Mine and the Copper Cliff Mine brownfield site, which he said, could lead to $500 million-plus of investment at each site, more than making up for the lost $1 billion from Clean AER.

While he accepts that the Clean AER announcement was a business decision, DeStefano said the Copper Cliff Smelter could run into problems down the road when it operates with just one furnace.

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Applications flood in to Vale for long-term jobs – by Ashley Fitzpatrick (St. John’s Telegram – January 9, 2013)

http://www.thetelegram.com/

Vale is looking to fill long-term jobs for the operation of its new nickel-processing plant in Long Harbour. Coming out of construction over the next nine months, the mining company expects to have first nickel from the plant in the fourth quarter of this year.

There are an estimated 500 long-term jobs for the operation of the plant and about 350 people are expected to be hired by the end of the year.

The jobs include about 300 “technician” positions, advertised throughout the fall of 2012. “We’ve had quite a significant response,” said Bob Carter, a spokesman for Vale in Newfoundland and Labrador, in a recent interview with The Telegram.

Carter said the call for applications for the jobs has led to upwards of a couple thousand submissions, the vast majority being people from this province. The applications are being assessed and a first round of offers, though not the last, will be going out before the end of the month.

Carter said some of the applications submitted mistook the positions as construction jobs, rather than maintenance and the oversight of plant processes.

However, even after sorting out inappropriate submissions, he said, there is real competition for the plant jobs. Interviews and testing are meant to give recruiters a better sense of who is best suited to the positions.

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Vale cuts don’t concern SAMSSA director – by Heidi Ulrichsen (Sudbury Northern Life – January 11, 2013)

http://www.northernlife.ca/

‘Other places besides Vale’ to do business

Local mining supply and service companies won’t be majorly impacted by Vale’s decision to downscale its Clean AER project and move to one furnace at its Copper Cliff Smelter, said Dick DeStefano.

The executive director of the Sudbury Area Mining Supply and Service Association (SAMSSA) said his members were only winning about 25 per cent of the Clean AER contracts anyway. A website dedicated to Clean AER contracts hadn’t posted any new jobs up for grabs for the last three months, DeStefano said.

But with Clean AER’s scope being cut from $2 billion to $1 billion, he said he’ll never know how many contracts his members could have won. “There will be no tenders put out, and you won’t know,” he said. So far, DeStefano hasn’t received any phone calls from members who are losing contracts because of the cuts.

Companies that specialize in servicing the smelter may be hurt by the company’s decision to shut down one of its furnaces, but again, he said he doesn’t see a large overall impact on his membership.

DeStefano estimates other Vale projects, such as the Victor Capre Mine and the Copper Cliff Deep project, will be worth about $2 billion anyway, and will provide many contract opportunities for local companies.

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Vale scales back [in Sudbury] – by Laura Stricker (Sudbury Star – January 11, 2013)

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

Vale announced Thursday it will slash spending on a massive pollution-reduction project in Sudbury, as it moves from a two-furnace to one-furnace operation at its Copper Cliff smelter.

“A move to a single furnace is years away, but preparation for this move will mean changes to the Clean AER Project in the immediate future,” Vale said in a statement. “The outcome of this move to a single furnace, combined with adjustments to the Clean AER Project, will be reductions in annual (sulphur dioxide) emissions more than 50% greater than contemplated in the original Clean AER plan, at approximately half the capital investment.”

The changes will see the cost of the Clean AER project reduced from $2 billion to $1 billion. The company’s operating costs will also be reduced, but by how much remains to be seen, said Angie Robson, Vale’s manager of corporate affairs.

“Vale has moved from what was once a growth strategy to really focus on generating value rather than production volume and also ensuring that each of our operations are self-sufficient and able to stand on our own two feet,” Robson said.

“Changes in our asset footprint, such as the commissioning of the Long Harbour project in Newfoundland, and decisions to optimize and redistribute some of the flow of our raw materials, have created conditions for moving from a two-furnace operation to a single-furnace operation for our smelter … We see it as the next logical step in our evolution here in Sudbury.”

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