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Nickel

Exploration: Lundin: Supersizing nickel-copper discovery at Eagle – by Kip Keen (Mineweb.com – June 4, 2015)

http://www.mineweb.com/

Lundin Mining sinks claws into near-mine nickel copper discovery at Eagle.

Patience and deep wedge-drilling is paying off for Lundin Mining at its Eagle nickel-copper mine in Michigan, US, which recently went into production.

Back in 2013, Lundin bought the near-production project from Rio Tinto for $325 million. It was a project in flux that was not existentially important for Rio Tinto as a small- to medium-sized nickel-copper deposit.

Still, it was half-built and comprised a nickel-copper reserve that would, for Lundin, diversify it far more seriously into the nickel sphere, something it has lacked.

Reserves at the time (and still) were 5.2mt @ 2.93% Ni and 2.49% Cu, with strong gold, PGM and cobalt kickers. On top of the purchase cost Lundin spent about $400 million to get the mine up and running. It shipped first ore mid-last year.

Now, without recent drilling success, the mine stands on its own two feet. It is to produce some 17,000 tonnes of nickel and 17,000 tonnes copper a year over an eight-year life of mine with average C1 cash costs around $2.55/lb nickel, according to Lundin estimates.

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[War Plan Red-U.S. Invades Canada] Sudbury’s nickel important to Americans’ military might – by Stan Sudol (Northern Life – February 5, 2006)

http://www.northernlife.ca/

Please note that this article, was originally published in 2006.

If the Yanks went to war with the Brits in the 1920s, American troops would have tried to invade Sudbury from northern Michigan

Canada and the United States have been economic and military allies for most of the 20th century, notwithstanding the bad chemistry between our leaders from time to time. Hopefully Prime Minister Stephen Harper will be able to soon repair the damage in relations caused by the Paul Martin Liberals.

However, throughout much of American history, many influential politicians were firmly committed to the expansionist ideology of Manifest Destiny. This is the belief that the United States has an “inherent, natural and inevitable right” to annex all of North America.

So it should not be a huge surprise to learn that the United States military had prepared a Joint Army and Navy Basic War Plan to invade Canada in the late 1920s, and updated it in 1935. The document called War Plan Red was declassified in 1974. However, the story resurfaced a short time ago in a Washington Post (Dec.30, 2005) article by journalist Peter Carlson headlined Raiding the Icebox; Behind Its Warm Front, the United States Made Cold Calculations to Subdue Canada.

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Shanghai Exchange Seeks Foreign Nickel to Help Ease Shortage (Bloomberg News – May 8, 2015)

http://www.bloomberg.com/

The Shanghai Futures Exchange plans to allow delivery of foreign-made nickel into its futures contracts as it seeks relief from a shortage of domestic supply to the bourse.

Russia’s OAO GMK Norilsk Nickel, the world’s largest producer, is among suppliers the exchange plans to authorize, SHFE said Friday in an e-mailed response to questions. Six brands made by six domestic companies are currently deliverable into the SHFE futures, which started trading in March. That compares with 59 brands for its copper contract and 23 for the London Metal Exchange.

“Shanghai Futures Exchange has been actively seeking to proceed with registration of foreign nickel supply,” the exchange said. Prices below the cost of production for some companies are “the reason they are reluctant to sell, therefore reducing market supply.”

Rules limiting the origin of nickel allowed for delivery in China’s new futures prompted speculation prices may extend gains as sellers seek sufficient supplies to meet the requirements. The metal on the SHFE is up 11 percent since trading started March 27, outpacing the 7.5 percent advance on the LME.

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UPDATE 2-Glencore disappoints with weak first-quarter metals output – by Silvia Antonioli (Reuters U.K. – May 5, 2015)

http://uk.reuters.com/

LONDON, May 5 (Reuters) – Miner and commodity trader Glencore reported weaker than expected first quarter output at some of its mining assets, with production of its top earner, copper, down 9 percent due to lower grades at two South American mines.

Glencore has a bigger exposure to base metals than iron ore compared with its large rivals. The company has a large commodity trading division, in addition to its mining and oil assets.

Bernstein analyst Paul Gait called the production figures “disappointing”, with base metals and coal lagging expectations.

Copper output was 350,700 tonnes in the first quarter, below most analysts forecasts. The fall was due to lower grades at the Alumbrera mine in Argentina and the Antamina mine in Peru, and to a maintenance shutdown at Collahuasi, in Chile.

Coal production rose 4 percent in the first quarter to 35.6 million tonnes, thanks to the commissioning of two new thermal coal projects in South Africa.

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Hold the nickel price elation – by Kip Keen (Mineweb.com – April 28, 2015)

http://www.mineweb.com/

Beware promises of price booms.

There’s been some salivation over the spot nickel price lately. It’s beaten to smithereens, down from around $9/lb a year ago to well under $6/lb in recent weeks.

Indeed, nickel has “surged” in recent days bringing it just over $6/lb from about $5.60/lb a week ago. That move has piqued market interest in a metal heavily hammered in the past year or so.

Yet it’s worth checking excitement about any advertised boom in prices, especially with lofty targets (say back to $10/lb or more as nickel traded in 2010-2011).

For one, nickel supply hardly seems to be hurting at the moment, despite export restrictions in Indonesia. With supply from the Philippines bridging the gap, for now, few analysts predict giant supply holes in the market near term.

Credit Suisse assesses nickel as showing a “near-balanced market in 2015″ that may slide into deficit next year assuming higher cost nickel pig iron (NPI) production slows down.

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METALS-Nickel hits one-month high on supply concerns – by Liisa Tuhkanen (Reuters Africa – April 27, 2015)

http://af.reuters.com/

LONDON, April 27 (Reuters) – Nickel prices surged to a one-month high on Monday on prospects for reduced supply, but analysts said the rally could be difficult to sustain.

Overall, base metals were boosted by higher Chinese equity prices and hopes for further stimulus in the world’s largest consumer of industrial metals.

Three-month nickel on the London Metal Exchange rose more than 3 percent to a session high of $13,690 a tonne. The steel ingredient ended at $13,550 a tonne – up from $13,195 on Friday, when it rose nearly 4 percent.

Expectations of a more balanced nickel market rose last week after the International Nickel Study Group said the global surplus would shrink to about 20,000 tonnes this year as an export ban on nickel ore by top producer Indonesia further crimps production in China.

Also on the radar are production problems at BHP Billiton’s Colombian ferronickel operations. However, Robin Bhar, metals analyst at Societe Generale, said the nickel rally could peter out as prices seemed to have returned to an equilibrium after falling to $12,205 in mid-April, the lowest level since May 2009.

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Nickel: The Outperformer And Top Pick For 2015 – by Stephan Bogner (Seeking Alpha – April 21, 2015)

http://seekingalpha.com/

Summary

Nickel was the best performing metal in 2014.
Nickel is the top commodity pick of several investment banks, including Morgan Stanley.
The Voisey’s Bay area may host the next big nickel discovery since it is abnormally under-explored.
From today’s perspective, Voisey’s Bay wasn’t really a great nickel discovery, but still one of the world’s biggest.

• 22 years ago, Robert Friedland’s Diamond Fields Resources Inc. stumbled onto nickel while looking for diamonds in Canada’s remote north.

• Only three years later, in 1996, Friedland sold his lucky strike, the Voisey’s Bay Nickel Deposit, for $4.3 billion USD to Inco.

• Prior to being purchased by CVRD (now Vale (NYSE:VALE)) in 2006, Inco was the world’s second largest producer of nickel.

• In 2005, the Voisey’s Bay open-pit and concentrator started production. Vale is currently completing an engineering study for an underground mine to be constructed between 2016-2019, extending mine life to 2035.

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Quebec plans $100-millon loan to troubled Nunavik mine – by Sarah Rogers (Nunatsiaq News – April 16, 2015)

http://www.nunatsiaqonline.ca/

The Quebec government is prepared to loan $100 million through a government-linked investment agency to Canadian Royalties and its parent company Jien Canada Mining Ltd., which owns and operates the Nunavik Nickel mine.

The news comes just days after Quebec Premier Philippe Couillard re-launched the government’s Plan Nord, which promised to invest billions into building the province’s economy north of the 49th parallel.

But opposition parties in the National Assembly had questions April 14 about the government’s decision to invest in the Nunavik mine, given the premier’s background. Couillard was named to Canadian Royalties’ board of directors in 2009, a year after he resigned as health minister under the Charest government.

Couillard also sat on the board alongside Dr. Arthur Porter, the disgraced former CEO of the McGill University Health Centre in Montreal, who faces fraud charges alleging his involvement with a multi-million dollar, kick-back scheme linked to the construction of a new hospital centre.

Opposition MNAs suggested Couillard’s connection to the mining company raises a conflict in the face of such a large government investment.

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Norilsk Sees Nickel in Cars Tripling as Tesla Drives Sales – by Yuliya FedorinovaAndrey Lemeshko (Bloomberg News – April 14, 2015)

http://www.bloomberg.com/

Nickel demand from the auto industry is set to rise as much as threefold in five years as output of electric and hybrid cars gathers pace, according to Russia’s largest producer of the metal.

“Hybrid and electric cars make more demand for nickel,” Anton Berlin, head of strategic marketing at OAO GMK Norilsk Nickel, said in an interview in Moscow. “It will rise because many automobile companies, such as Tesla Motors, have very ambitious plans for the future.”

Electric and hybrid vehicles are increasingly becoming a low-cost alternative for consumers as their batteries — which use nickel — get cheaper and more efficient. That may aid a recovery in the market for the metal after prices slumped because of oversupply in the stainless-steel industry.

Tesla Motors Inc., California’s largest automotive employer, is seeking to make electric cars for the masses by adding a battery factory near Reno, Nevada. Chief Executive Officer Elon Musk said last month that Tesla would also reveal “a major new product line” at the end of April.

Use of nickel in car batteries may rise to more than 100,000 metric tons a year by the end of the decade from 30,000 tons in 2014, according to Norilsk’s Berlin.

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Russian Miners With Billions of Dollars Weigh Dividend Increase – by Yuliya Fedorinova (Bloomberg News – March 31, 2015)

http://www.bloomberg.com/

(Bloomberg) — Russian metals exporters that are piling up cash after the ruble collapse are sharing the wealth with investors as the economy tilts into recession and global demand slows.

The weaker ruble has benefited Russia’s resource companies, which have costs in the national currency and revenues in dollars or euros. OAO Novolipetsk Steel, OAO GMK Norilsk Nickel and four other of Russia’s largest metals and mining companies together held $8.3 billion in cash and equivalents at the end of December, according to data compiled by Bloomberg. They had about $5.7 billion a year earlier.

Companies are using the windfall to reward shareholders, switching focus from debt repayments or investments. Prices for major materials have softened as China’s economic growth slowed last year to the weakest since 1990. Russia is sliding into its first recession in six years, as U.S. and European sanctions add to slowing consumer demand and a slump in oil prices.

“It makes no sense to start large investments now, and it’s better to pay excessive cash to the owners,” Kirill Chuyko, head of equity research at BCS Financial Group, said by phone on March 31. “The cost of capital for Russian companies increased, which also makes companies rethink their dividend policies.”

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COLUMN-Bauxite and the limits of resource nationalism – by Andy Home (Reuters U.S. – March 27, 2015)

http://www.reuters.com/

(Reuters) – It’s been over a year now since Indonesia imposed its ban on the export of unprocessed minerals. The aim of the January 2014 lock-down is to generate greater value for the country and its citizens by forcing operators to build processing plants and export value-added product not raw materials.

Other resource-rich countries, such as the Democratic Republic of Congo, are travelling the same road but Indonesia is way out in front.

The country’s high-stakes strategy, implemented in the face of considerable opposition from both its own mining sector and overseas buyers, does appear to be largely working.

At a practical level flows of nickel ore and bauxite to Chinese buyers have been halted. Indonesia’s mining ministry says there are now 11 nickel-processing projects under way, many of them backed by Chinese nickel and stainless steel producers.

The country’s two top copper miners, Freeport McMoRan and Newmont Indonesia, have been successfully cajoled into committing to a new copper smelter in return for keeping their mining rights.

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Investors pinning hopes on a nickel comeback – by Barry FitzGerald (The Australian – March 27, 2015)

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

Talisman Mining (TLM)

It has got to be of some comfort to the band of ASX-listed nickel ­juniors that despite the price of the metal not going on with last year’s price rally, their market capitalisations have held up well.

Nickel got to $US21,000 a tonne last year on enthusiasm that Indonesia’s ban on the export of unprocessed ores was a big structural change that meant ­prices had to head higher. Prices for the steelmaking ingredient did for a while, but are now back at $US13,680 a tonne.

But again, the values of junior producers like Western Areas (WSA), Panoramic (PAN) and Mincor (MCR) have held up well, at least in the sense that they have not given back all of their gains achieved during last year’s price surge.

The fall in the dollar has helped. But the bigger reason seems to be that investors are betting that the nickel price is going to come storming back at some point. Macquarie’s equities desk estimates that the share ­prices of PAN and MCR appear to be factoring in a nickel price 50 per cent higher than the current price, and in the case of WSA, 27 per cent higher.

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Russell walks out on media amid questions about Inuit land claims – by James McLeod (St. John Telegram – March 18, 2015)

http://www.thetelegram.com/

“We should have increased dialogue. We should be sitting and talking as opposed to discussing litigation,” Russell said in the House of Assembly Tuesday, responding to a question from Liberal House Leader Andrew Parsons.

Russell reportedly told a Nunatsiavut Government minister, “Go ahead and take us to court, we’re going to win anyway.” In the House of Assembly, Parsons wanted to know whether Russell talked to a lawyer before issuing the challenge.

“You asked them to sue us. Was that based on an opinion, and if not, why would you make that comment?” Parsons asked. Russell said he didn’t talk to anybody in the Department of Justice or the Attorney General, but he said some officials in his department looked at it.

“I would assume that our officials went through all the proper channels,” he said. The crux of the issue is an agreement the government signed dealing with the Voisey’s Bay nickel mine, and the Long Harbour processing plant which is behind schedule.

The government amended the agreement to allow Vale, the mine operator, to ship more nickel ore out of the province in the next few years while the Long Harbour plant is getting up and running.

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NEWS RELEASE: What Does South32 Mean for the Nickel and Manganese Markets?

LONDON, March 19, 2015 /PRNewswire/ — In August 2014, BHP Billiton (BHPB) announced that it intended to demerge its aluminium, coal, manganese, nickel and silver assets into a new, independent global mining and metals company. In December, it was announced that the proposed company will be branded “South32”, to reflect the fact that its major operations will be in the southern hemisphere, in Australia and South Africa. This week saw the publication of a demerger prospectus which provided more detail about the spin-off:

  • South32 will be a top-10 global mining company headquartered in Perth, Western Australia, and will produce 10 commodities across five countries
  • After the demerger, which will cost an estimated US$738M, the company will have a gross asset value of US$26.7Bn
  • South32’s portfolio of assets made a pre-tax profit of US$422M in 2014 on revenues of US$10.4Bn
  • The company will begin life with a US$1.5Bn credit facility provided by a syndicate of banks to ensure that it has adequate liquidity
  • BHPB has loaded South32 with less debt than expected, US$674M
  • Shareholders will vote on the demerger in May

The creation of South32 has the potential to significantly impact the manganese and nickel markets:

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PDAC 2015: Scotiabank’s Patricia Mohr predicts only ‘modest’ recovery (Northern Miner – March 17, 2015)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Zinc is Mohr’s number one pick, and she forecasts prices will move up to US$1.50 per lb. in 2016.
Copper, she says, will remain flat at about US$2.75 per lb. for the next two years, but longer
term should reach US$3.50 per lb. She estimates the nickel price will reach about US$10.55 per lb.
in 2016. “I think nickel will do exceptionally well,” she predicts, “and Sudbury is going to come
back into its own in 2016.” (Patricia Mohr, Scotiabank Vice President Economics)

Commodity prices as of January this year have fallen below the previous recessionary lows of early 2009, and are now at levels not seen since January 2007, Patricia Mohr, vice president economics at Scotiabank, said during a presentation at the recent Prospectors & Developers Association of Canada conference in Toronto.

China’s massive infrastructure spending program helped lift commodity prices in 2009, but the latest dip in prices, Mohr says, is mostly due to “a fight for market share” in a very lackluster global economy. The world is entering its fourth year when global GDP growth has been just a little over 3% per annum, she warns.

“I’m beginning to realize that 3% per annum — while it is enough to turn over the global economy — it’s not high enough to really put any momentum behind global commodity prices and markets,” she says. “And when you get some capacity expansion, for example, such as in copper, and massive expansion in iron ore, and huge expansion in oil production from U.S. shales, all of this is occurring in a very lackluster market around the world, and leading prices lower.”

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