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Are Ontario political party pronouncements echoing OMA’s vision for the future of mining?

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

As we move closer to October 6 election day in Ontario, it is encouraging to see mining being part of the platform of all major parties.  Many of the topics and positions being presented by the Liberals, Progressive Conservatives and New Democrats seem to reflect the OMA’s plan for the future of mining in Ontario.  Last week, the OMA presented each party’s’ views on mining, however, the issues continue to develop.  The full text of the OMA’s vision for the future “Action Plan for Ontario: Taking Advantage of a Critical Window of Opportunity” can be found on the OMA website www.oma.on.ca. 
 
The Liberal document “Plan for Northern Ontario” has a lot of mining content.   The OMA’s paper calls for “balancing conservation and development targets” and the establishment of a target for new mines in Ontario to demonstrate a commitment to the future success of the industry.  The Liberal platform says “at least six mines are reopening and four new mines are expected to open by the end of 2012 and we’ll open at least eight new mines in the next 10 years.” 

The OMA would like to see an engaged Ontario government working with the federal government, industry and First Nations to cut approval and permitting time lines in half.   While the Progressive Conservatives and NDP have supported permitting improvements, the Liberals have said “we’ll also work to ensure the federal government is at the table for Northern communities and First Nations in planning for smart development of the Ring of Fire. 

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Weak demand saps nickel prices – by Pratima Desai – Reuters (Sudbury Star – August 17, 2011)

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

LONDON — Deteriorating demand from stainless steel mills and rising mine production are likely to push the nickel market into surplus in the second half of the year and put modest downward pressure on prices.

The uncertain outlook for global economic growth and demand because of the debt crisis in the euro zone and the United States mean gloomier prospects for nickel demand.

Stainless steel producers use about two-thirds of global nickel output, which is estimated at above 1.5 million tonnes this year.

First-quarter production of stainless steel rose to a record high of 8.390 million tonnes, according to the International Stainless Steel Forum, and expectations for the second quarter are, at best, flat.

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Inco Limited History (1902- 2001) – by International Directory of Company Histories

For a large selection of corporate histories click: International Directory of Company Histories

Company History:

Inco Limited is one of the world’s top producers of nickel. It operates Canada’s largest mining and processing operation in Sudbury, Ontario, and runs other mines in Canada, the United Kingdom, and Indonesia. It has interests in refineries in Japan, Taiwan, and South Korea, and sales and operations in over 40 countries worldwide. Overall Inco provides about 25 percent of the nickel used globally. The company also produces cobalt, copper, precious metals, and specialty nickel products.

Early Years

Nickel was first isolated as an element in the middle of the 18th century, but not until the following century did it come into demand as a coin metal. Up to around 1890, coining remained the metal’s only use, and most of the world’s nickel was mined by Le Nickel, a Rothschild company, on the island of New Caledonia. At that time, however, it was determined that steel made from an iron-nickel alloy could be rolled into exceptionally hard plates, called armor plate, for warships, tanks, and other military vehicles, and the resulting surge in demand spurred a worldwide search for nickel deposits.

The world’s largest nickel deposit ever discovered was in Ontario’s Sudbury Basin; before long, one of the area’s big copper mining companies, Canadian Copper, began shipping quantities of nickel to a U.S. refinery in Bayonne, New Jersey, the Orford Copper Company.

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NickelOdious – by Jon Nadler (Kitco Metals – June 13, 2011)

Jon Nadler is a Senior Metals Analyst – Kitco Metals

A further decline in crude oil prices conspired to drag most of the commodities’ complex to lower value ground as the new trading week commenced. Thus, precious metals lost chart altitude levels as well, despite the minor, 0.15 loss recorded in the US dollar index this morning.

Part of the early selling pressure was related to investors’ raising cash to cover margin calls incurred in the wake of the sixth consecutive losing session in the equity markets on Friday. However, at the end of the day (or, shall we say, the beginning thereof) reports that China’s economy is slowing (and perhaps more than just a tad) coupled with posturing by Saudi Arabia that it might ratchet supplies of black gold higher in coming weeks were the prime catalysts for the price dips we witnessed this morning.

As regards China, the prospects of a possible “hard landing” by that country’s economy were brought into discussion once again. NYU’s Dr. Nouriel Roubini said that he does not see the combination of China’s reliance on fixed investment (now running at about half of its GDP), its lurking “massive non-performing loan problem” plus its huge amount of overcapacity as resulting in any kind of a rosy outcome. For Dr. Roubini, the period after the year 2013 presents a “meaningful probability” for a Chinese economic “runway disaster” unless the aforementioned issues are tackled and resolved.

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Papua New Guinea [Ramu nickel laterite project] and China’s New Empire – by Geoffrey York (Globe and Mail – January 3, 2009)

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. Please note that this article was orginally published January 3, 2009.

MADANG, Papua New Guinea

When Chinese engineers landed in Papua New Guinea in 2006 to inspect their latest mineral acquisition, they faced an arduous journey through the tropical wilderness. They drove over crumbling roads to the Ramu River, then found natives with dugout canoes to paddle them upstream. Next, they hired another team of locals with machetes to slash a rough trail for eight hours through the steamy jungle, dodging poisonous snakes and malaria-carrying mosquitoes.

“It was terrible,” recalls Wang Chun, the chief engineer. “You couldn’t breathe.”

Today, less than three years later, a series of small Chinatowns has emerged in the jungle — complete with Chinese food, Chinese satellite television channels and crews of Chinese migrant labourers living in cheap dormitory huts. Where once was wilderness, you find the workers of China Metallurgical Group Corp., toiling seven days a week and chattering about their families back home in Beijing and Sichuan.

It hasn’t been easy. The state-owned mining company has dealt with violent clashes with local landowners, striking workers, attacks from the media and unfriendly police who arrested more than 200 Chinese technicians on charges of illegally entering the country.

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NEWS RELEASE: Watts Griffis McOuat releases Cu-Ni-PGE Study [for best Canadian exploration targets]

Watts, Griffis and McOuat Limited (“WGM”) is Canada’s longest running (established in 1962) independent firm of geological and mining consultants providing value-added professional services of the highest standards to the global mineral resource industry.

May 10th, 2011

WGM has completed a yearlong study of potential Cu-Ni-PGE exploration targets in Canada. The objective of the study was to identify underexplored areas that exhibit significant exploration potential.

WGM’s team, led by J. Konnunaho, a geologist from the Finnish Geological Survey and an expert in such mineralization, reviewed and prepared an outline of prospective areas in Canada hosting the most favourable depositional environments that could contain such types of mineralization. The study identified and examined 26 such settings, all of which have various levels of demonstrated potential for hosting Cu-Ni-PGE deposits. Targets were then selected based on the following search criteria;

1) current economic potential;

2) accessibility to exploration (remote areas impact exploration costs);

3) geological setting, the presence of those features most favourable for Ni-Cu-PGE mineralization;

4) demonstrated historical and or recent exploration results;

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The Charges Against Big Nickel [in 1946 by U.S. government] – by Richard Mills (Jun 9, 2011)

Richard Mills owns no shares of any companies mentioned in this report and none are advertisers on his site www.aheadoftheherd.com

As a general rule, the most successful man in life is the man who has the best information

In 1946, in New York City, the Anti-Trust Division of the Department of Justice filed a complaint against Inco and its wholly owned U.S. subsidiary, International Nickel Co. Inc.

Canada’s Inco, at the time, owned 90% of the world’s nickel ore and supplied 90% of U.S. nickel needs.

The charges brought were:

■Conspiracy to prevent competition in the nickel industry
■Fixing prices
■Making cartel agreements with I. G. Farbenindustrie, A. G. and two French companies to prevent competition and peg prices in the world market

The Department of Justice said the nickel industry ceased to be competitive earlier in the century when Charles Schwab arranged a merger between Canadian companies with nickel ore and U.S. companies with the chemical process for separating nickel from copper. Holdings of this combine were consolidated under Inco, Ltd. in 1928.

How ironic that in 2010 the US did not have any active nickel mines. Nickel has a very interesting history and is still extremely important in the everyday functioning of our modern economies.

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Is a Profitable Nickel Laterite (HPAL) Mine a ‘Black Swan’? – by Patrick Whiteway (Canadian Mining Review Blog – January 31, 2011)

Canadian Mining Review: Discussing ideas and issues related to mining in Canada 

Thoughts on mining nickel laterites inspired by two recent books: ‘Linkages of Sustainability’ and ‘The Black Swan.’  

It’s October 2008 and I’m relaxing in a second-row seat of an air conditioned tour bus. It’s crossing the Swan River in beautiful downtown Perth, Australia, when the driver suggests to passangers that the river should be called the Black Swan River. That’s because 300 years ago, he explains, European explorers first visited this part of Western Australia and saw black swans for the very first time. Up until then, the only swans they had seen were white ones. Seeing black swans on this wide, lazy river revolutionized their thinking.

Reading Nassim Nicholas Taleb’s best-selling book “The Black Swan,” could revolutionize your thinking. This book is all about highly improbable events. Taleb skillfully questions how we think about these events that turn out to have serious consequences. He calls them ‘black swans’ and as I’ll show here, they have a significant role to play in the mining industry.

As a Canadian mine engineer who has visited and written reports on many mines in Canada, I can tell you that improbable events, sometimes called simply luck, surprises, randomness or human error, have enormous consequences for the success or failure of many mines. The only successful, high pressure acid leach (or HPAL) nickel laterite operation in Australia is one of my favorite examples.

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Nickel plunging into bear market on biggest glut in 4 years – by Agnieszka Troszkiewicz and Maria Kolesnikova – Bloomberg News (National Post – June 13, 2011)

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

www.bloomberg.com

At a time of scarcity in everything from crude oil to copper to corn, nickel is heading for the biggest glut in four years, driving prices lower into 2012.

Next year’s surplus will rise to 60,000 metric tonnes from 12,000 tonnes in 2011, making nickel the most oversupplied metal relative to output or use, according to Bank of America Merrill Lynch, the most-accurate forecaster tracked by Bloomberg over two years. New mines will boost supply 11% in 2012, the most in 17 years, Macquarie Group Ltd. says. Prices may drop 12% to US$20,000 a ton by Dec. 31, the median estimate in a Bloomberg survey of 17 analysts and traders shows.

“I’m not particularly optimistic about nickel,” said Ian Henderson, who manages about US$10 billion of natural-resource assets at JPMorgan Chase & Co. in London, including the Global Natural Resources Fund, which doubled in two years. “I don’t think there is a commercial logic for the price where it is today. A nickel price of US$15,000 is entirely possible.”

While raw-material producers are failing to extract enough copper and oil and droughts threaten crops, nickel supply is expanding faster than demand.

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Surging costs delay Sherritt [Madagascar Ambatovy nickel] project – by Brenda Bouw (Globe and Mail – June 15, 2011)

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. Brenda Bouw is the Globe’s mining reporter.

Sherritt International Corp. is the latest in growing list of mining companies to report double-digit cost increases and project delays resulting from surging prices for energy and raw materials.

Toronto-based Sherritt said the total cost of its 40-per-cent owned Ambatovy nickel-cobalt project in Madagascar is expected to rise 16 per cent to $5.5-billion (U.S.). Production, set to begin this summer, is now delayed until the first quarter of next year.

“We find this embarrassing and painful,” Sherritt chief executive officer Ian Delaney told investors on a conference call Tuesday. Sherritt’s stock fell 6 per cent on the Toronto Stock Exchange on Tuesday, its lowest level since last summer.

Rising costs are becoming a huge hurdle for miners as they rush to boost production and capitalize on global demand and metal prices while they remain strong.

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Bucko Lake Canada’s Newest Nickel Producer – by Marilyn Scales

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.

Canada’s newest nickel producer is the Bucko Lake mine near Wabowden, MB. The mine, which belongs to Toronto’s Crowflight Minerals, shipped its first concentrate on Feb. 12, 2008, to Xstrata’s smelter Sudbury, ON.

The initial concentrate shipment weighed of 90.0 tonnes and contained 11.5 tonnes of nickel. Full commercial production is expected early in Q2 2009.

The Bucko Lake deposit was first investigated by Falconbridge, and a 340.0-metre-deep shaft was sunk in 1971-72. The mine is designed for longhole open stoping with sublevel access on 30.5-metres intervals. The intervals are connected via an internal decline. Backfill consists of cemented hydraulic material and development waste.

Underground mining began late last year in the first high-grade stope area on the 1,000 level (305 metres). Lower grade stopes on the 1,000 level are also being mined, and the high grade stope area on the 900 level (275 metres) is now being developed. The main ramp has been driven approximately 115 metres vertically from surface. Some ore development and crown pillar support activities will occur from the 450 level (135 metres), which should be reached late in the first quarter.

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A History of Sherritt – Fifty Years of Pressure Hydrometallurgy at Fort Saskatchewan – by M. E. Chalkley, P. Cordingley, G. Freeman, J. Budac, R. Krentz and H. Scheie (Part 5 of 5)

Application of Sherritt’s Pressure Hydrometallurgical Technology to Other Metals

Much of Sherritt’s metallurgical and product technology developed over the last 50 years can be traced back to work done during the development of the ammonia leach process.  Pressure leaching of sulphide ores and concentrates, using continuous horizontal autoclaves, provided the basis for a thriving pressure hydrometallurgical process licensing business which offered processes for treating nickel mattes and concentrates, zinc concentrates, and refractory gold ores and concentrates.  The nickel reduction process perfected in the Ottawa pilot plant was subsequently licensed worldwide.

During the early 1950’s, following the successful commissioning of the nickel refinery at Fort Saskatchewan, Sherritt utilized its laboratory and pilot plant facilities in Ottawa to look for other potential applications for pressure leaching processes in the metals industry (14).  Laboratory tests were carried out on the pressure leaching of uranium ores and on the pressure oxidation of refractory gold ores, where the oxidative pressure treatment proved an excellent method for oxidizing pyrite and arsenopyrite to liberate the gold for subsequent recovery.

Two additional leaching plants were built by Chemico to treat cobalt concentrates in the aftermath of the Korean War, when the cobalt price was artificially high, but both plants became uneconomic as the price of cobalt declined, and closed in the early 1960s.  A fourth pressure leaching plant was the Port Nickel plant, constructed by Freeport to treat the nickel-cobalt sulphide from Moa.

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A History of Sherritt – Fifty Years of Pressure Hydrometallurgy at Fort Saskatchewan – by M. E. Chalkley, P. Cordingley, G. Freeman, J. Budac, R. Krentz and H. Scheie (Part 4 of 5)

Pressure Hydrometallurgy at Moa

The acid pressure leach process for the treatment of low magnesium content lateritic ore has been in operation at the Pedro Sotto Alba plant in Moa, Holguin, Cuba since 1959.  The plant was originally constructed by Chemico for Moa Bay Mining Company, a subsidiary of Freeport Sulphur, but was taken over by the Cuban government in 1960.  The plant recommenced operations in 1961, under Cuban management.

Under Cuban management the production at Moa gradually increased and improvements were made to the recovery of nickel and cobalt.  In December 1994, Sherritt Inc. and General Nickel Co. S.A. announced the formation of a combined enterprise that included the Moa plant, now known as Moa Nickel S.A.   The nickel and cobalt sulphides produced by Moa Nickel S.A. (13) are transported to the nickel and cobalt refinery at Fort Saskatchewan, Alberta, Canada now known as “Corefco” (The Cobalt Refinery Company Inc.), a second combined enterprise company, for processing to pure metal products.

At Moa, Nickel limonite ore is processed in a high-pressure acid leach to selectively dissolve nickel and cobalt from the ore.  Concentrated sulphuric acid is the lixiviant.

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A History of Sherritt – Fifty Years of Pressure Hydrometallurgy at Fort Saskatchewan – by M. E. Chalkley, P. Cordingley, G. Freeman, J. Budac, R. Krentz and H. Scheie (Part 3 of 5)

History and Development of Cobalt Production

As Sherritt was developing the hydrometallurgical process for refining nickel, they were also faced with the question of how to separate cobalt from nickel, and then what to do with the cobalt.   The selection of hydrogen reduction technology to produce metallic nickel powder also provided Sherritt with a primary nickel-cobalt separation step.  As long as the ratio of nickel to cobalt is large, nickel can be selectively reduced with hydrogen without reducing cobalt.

The Lynn Lake concentrate, with typical ore grades of 10% nickel and 0.5% cobalt, yielded nickel reduction feed solution with relatively low cobalt content (nickel/cobalt ratio greater than 30:1).  Since the relatively small amount of nickel and cobalt remaining in the solution after nickel reduction could be precipitated from solution with hydrogen sulphide to yield a saleable intermediate nickel-cobalt sulphide product, development and construction of the nickel refinery was able to proceed without a final answer as to how to handle the cobalt.

Many alternative cobalt flowsheets were studied.  The Ottawa pilot plant was closed in 1955 and some of the pilot plant equipment was shipped to Fort Saskatchewan where it was used in the assembly of a “commercial sized” cobalt refinery.   Output of this plant, at less than 150 tonnes of cobalt per year, was so low that it was only utilized for commercial cobalt production for part of the year, and used for pilot scale development of other hydrometallurgical processes during the remainder of the year. Refining of nickel-cobalt sulphides, utilizing an acid leach of the sulphides, began on June 16, 1955.

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A History of Sherritt – Fifty Years of Pressure Hydrometallurgy at Fort Saskatchewan – by M. E. Chalkley, P. Cordingley, G. Freeman, J. Budac, R. Krentz and H. Scheie (Part 2 of 5)

THE FORT SASKATCHEWAN REFINERY

Commissioning

Leaching of concentrate started on May 24, 1954.  By June 19, the leach circuit was filled and by July 15 feed liquor was available for the metal recovery section.  On July 21, 1954, the first nickel metal was produced and met specifications.  The plant reached 90% of design capacity by the end of 1954 and operated at design capacity during 1955.

Ongoing Development of the Ammonia Leach Process

Through the years, as feed sources to the refinery changed and developments were made and implemented, the configuration of the leach stages and autoclaves was altered many times.  However, the basic function and operation of the ammonia leach has remained remarkably constant.  The dissolution of metal values combined with the simultaneous oxidation of sulphur forms the basis for the chemistry of the ammonia leach.

In the ammonia leach nickel, cobalt, copper and zinc are leached into solution.  Iron, if present in reactive form, upon dissolution is immediately hydrolysed and precipitated as hydrated iron oxide.  The iron oxide tailings are removed by thickening and filtration and discarded.  Sulphur chemistry is complex, as sulphur may exist as any of several intermediate oxidation states as well as the fully oxidized ammonium sulphate and sulphamate.

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