Vale – Page 48 – Republic of Mining

Vale iron ore deal a ‘reminder’ for Australia: Roy Hill – by Tess Ingram (Sydney Morning Post – May 22, 2015)

May 22, 2015

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

Roy Hill chief executive Barry Fitzgerald has said the iron ore expansion deals Brazilian miner Vale inked with China this week are a reminder Australian producers need to remain competitive in the global iron ore market.

Mr Fitzgerald, the man responsible for the development of Gina Rinehart’s $10 billion Roy Hill mine, joined majors BHP Billiton and Rio Tinto in warning of the Brazilian iron ore producer’s growing competitiveness with its Australian rivals.

“What it does remind me, and it should remind all of us, that we in the mining industry are in a competitive, international business,” Mr Fitzgerald told a Morgans Financial breakfast in Perth on Friday. “What we do needs to reflect the pressures and the actions of our competitors.”

On Tuesday, China agreed to fund Brazilian iron ore giant Vale’s major S11D expansion and invest in huge ships that will transport high-quality ore from Brazil to Asia for a lower cost.

The project, which should be finished next year, is expected to produce 90 million tonnes of high-quality iron ore at a unit cost of $US11 a tonne. Vale also announced this month it would begin shipping a blended product – Brazilian Blend fines – with an iron content of 63 per cent.

China to bankroll Vale iron ore expansion – by Amanda Saunders (Australian Financial Review – May 20, 2015)

May 20, 2015

http://www.afr.com/

China will help to bankroll a major expansion by Brazilian iron ore giant Vale and invest in huge Vale ships that will transport high-quality ore to North Asia – a deal that will reshape the global industry and put more pressure on Fortescue Metals Group.

On a state visit to China with Premier Li Keqiang, Chinese officials agreed to invest in up to eight of Vale’s huge iron ore carriers, known as Valemax ships.

More importantly, China will loan the company up to $US4 billion ($5 billion) to help fund a $US16.5 billion expansion called S11D. The project, which should be finished next year, will produce 90 million tonnes of high-quality iron ore that will be shipped to China at a cost almost as low as that achieved by industry leader Rio Tinto.

While Fortescue’s Andrew Forrest has repeatedly attacked BHP Billiton and Rio for continuing to expand into a weak iron ore market, Brazil’s plans are accelerating.

Vale plans to increase capacity to 450 million tonnes as early as 2018 from 330 million tonnes this year. Its expansion easily eclipses the combined tonnes BHP and Rio will put into the market over the next three to four years.

Editorial: Renewed focus on mine safety in Ontario (Northern Miner – May 13, 2015)

May 19, 2015

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

A newly released coroner jury’s verdict and recommendations stemming from the two-week inquest into the deaths of two miners at Vale’s underground Stobie nickel mine in Sudbury, Ont., in 2011 has met with wide approval from all players in the tragedy.

Jason Chenier, 35, and Jordan Fram, 26, were killed on June 8, 2011, when a run of muck overcame them while they worked at the 3,000-foot level near the No. 7 ore pass. They were moving muck through a transfer gate when a sudden release of 350 tons of sandy muck and water broke through the gate. Both miners died from smothering and compressional asphyxia, and Chenier also suffered blunt-force injuries.

It turns out a crash gate into the area where the two were working had been left open, so the muck, which had been stuck in the ore pass, came loose and flooded the area.

After pleading guilty to three of six charges in 2013, Vale received the largest Occupational Health & Safety (OH&S) fine ever issued in Ontario for the violations.

BHP Rejects Supply Restraint in Iron After Glasenberg Salvo – by Jasmine Ng, Martin Ritchie and Jesse Riseborough (Bloomberg News – May 14, 2015)

May 14, 2015

http://www.bloomberg.com/

BHP Billiton Ltd. defended its strategy of expanding iron ore output into an oversupplied market as prices decline, saying that the company’s approach was rational and it wouldn’t countenance cutting back on output.

“Our performance will be dependent on being the most efficient supplier and it shouldn’t be dependent on supply restraint,” Alan Chirgwin, iron ore marketing vice president, told a conference. “We have high-quality resources. We have a management team that’s operating in a very cost-disciplined way. We should be taking advantage of those things.”

Iron ore slumped 40 percent in the past 12 months as BHP and Rio Tinto Group in Australia and Brazil’s Vale SA expanded low-cost output to boost sales volumes and cut costs, spurring a surplus as China slowed. The strategy drew criticism from rivals including Fortescue Metals Group Ltd. and Glencore Plc, which said that the approach damages the industry. It’s also drawn flak from political leaders including Colin Barnett, the premier of Western Australia where BHP and Rio operate mines.

“What we’re doing very clearly is we’re operating our enterprise in a very economically rational way,” Chirgwin said in Singapore on Thursday. “We took action, so it wasn’t just words. In 2011, that’s the last time our board approved billions of dollars of additional investment in expansion.”

Chinese iron ore mines face ‘annihilation’ as BHP, Rio Tinto, Vale boost output – by Jasmine Ng, Feiwen Rong and Jesse Riseborough (Sydney Morning Herald – May 13, 2015)

May 13, 2015

http://www.smh.com.au/

Iron ore production in China is poised to shrink further as cheaper imports and faltering demand threaten to close mines supplying mills in the top steelmaker. Most private mines in China have costs that are too high and produce ore of too low a quality to survive, according to Sanford C Bernstein & Co. Output that fell 20 per cent to 311 million metric tons last year would drop to 271 million tons this year and shrink further next year, Goldman Sachs said.

Iron ore retreated 39 per cent over the past 12 months as Australia’s Rio Tinto and BHP Billiton as well as Brazil’s Vale SA boosted low-cost production to cut costs and protect market share, spurring a glut as China slowed. The outlook for supply, and consequences for miners in China, will be in focus on Thursday as executives from the biggest producers address a conference in Singapore. BHP chief executive officer Andrew Mackenzie warned on Tuesday that lower prices were here to stay.

Georgi Slavov, head of basic resources research at Marex Spectron Group, said in an email: “Mines not part of larger cash or credit line-rich steel groups are facing annihilation. Utilization in China keeps dropping, which means more and more mines are struggling to meet the ends and produce.”

Ontario mining safety review prioritizing proposals (CBC News Sudbury – May 13, 2015)

May 13, 2015

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

After the fanfare of putting out mining safety proposals, they get shortlisted for action

Some members of the Mining Health, Safety and Prevention Review are pushing ahead to turn safety recommendations into legislation. The chair of the committee, George Gritziotis is also the province’s Chief Prevention Officer.

He said he will soon be meeting with an advisory group which is prioritizing proposals from the review, as well as a recent inquest in Sudbury. Gritziotis said the 24 recommendations from the inquest into the deaths of Jordan Fram and Jason Chenier at Stobie Mine in Sudbury overlap, or dovetail, with the 18 from the review.

“You know there are recommendations in there that speak to hazards that are present in the workplace today that we want to move on right away,” he said.

“Following our May meeting, we will begin prioritizing which ones we are going to push forward on, and which are priority areas based on a number of things including risk assessment, our data around evidence and discussions we have with our partners. In terms of timeline it’s going to be a busy six to twelve months.”

Vale to divide and conquer by lifting high-grade iron ore output – by James Wilson (Financial Times – May 10, 2015)

May 11, 2015

http://www.ft.com/intl/companies/mining

Vale is keen to build up its supply of higher-quality iron ore in a move that could increase pressure on some rival producers in the global market for the steelmaking commodity.

The Brazilian miner is one of a quartet of companies that dominate the global market in iron ore, where prices have plummeted over the past year as a glut of supply — mainly from Australian producers — has encountered weakening Chinese demand.

Vale’s recent indications that it would be prepared to hold back some supply have helped to arrest the slide in the iron ore price, while underpinning a rally in the company’s shares in the past month.

In an interview Luciano Siani, chief financial officer, did not rule out Vale cutting its growth plans for next year. The miner expects to produce 340m tonnes of iron ore this year and has previously estimated that 2016 output will be 376m tonnes.

However, Mr Siani said Vale would be likely to “push to the fullest” its production of the highest grade of iron ore, which commands a premium price from steelmakers. By contrast Vale would be more likely to “manage” its more “standard” iron ore supplies, he said.

Sudbury family ‘overwhelmed’ by recommendations – by Carol Mulligan (Sudbury Star – May 8, 2015)

May 8, 2015

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

A coroner’s jury went beyond the eight recommendations jointly submitted at an inquest into the deaths of two men at Vale’s Stobie Mine and added 16 of its own to improve mine safety in Sudbury, in Ontario and throughout Canada.

The three-woman, one-man jury accepted eight recommendations suggested and agreed upon by Vale, United Steelworkers Local 6500, the Ministry of Labour and the families of Jason Chenier and Jordan Fram.

The first recommendation was that the Ministry of Labour implement the recommendations of the Mining Health, Safety and Prevention Review regarding water management in mines and the internal responsibility system.

The review was struck in December 2013 in response to pressure by families and mine workers for an inquiry into mine safety after the Sudbury men’s deaths. Chenier, 35, and Fram, 26, were killed when a run of muck overcame them while they were working at the 3,000-foot level near the No. 7 ore pass.

Sudbury should be proud of jury’s work: coroner – by Carol Mulligan (Sudbury Star – May 8, 2015)

May 8, 2015

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

The community owes a debt of gratitude to the work of the jury that made 24 recommendations to make mining safer in Ontario at the inquest into the deaths of two Vale workers. Presiding coroner Dr. David Eden said the issues surrounding the deaths of Jason Chenier and Jordan Fram were complex and of great concern to the community.

The “very well-considered and essential questions” and “thoughtfulness and thoroughness” of the recommendations displayed the highest level of dedication and commitment on the part of the three women and one man who sat on the jury, said Eden.

A fifth juror had to drop out a week into the two-week inquest because of medical reasons. Eden read the recommendations Thursday at the Sudbury Courthouse. “The community that you represent here should be proud of your work,” Eden told the jury.

The jury answered five basic questions that are at the heart of every coroner’s inquest. They determined that Chenier, 35, and Fram, 26, were involved in an accident and were presumed to have died June 8, 2011, about 10 p.m. The men were pronounced dead by the attending coroner early the morning of June 9.

Sudbury Steelworkers ratify new contract with Vale (Sudbury Star – May 1, 2015)

May 1, 2015

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

United Steelworkers locals 6500 and 6200, representing production and maintenance employees in Sudbury and Port Colborne, have voted to accept a new five-year contract, Vale announced Friday.

The new agreement takes effect on June 1. When the polls closed earlier today, 76.7% of members in Sudbury and 87% of members in Port Colborne had voted in favour of the new five-year deal.

“We are extremely pleased with the outcome,” Mitch Medina, Vale’s lead negotiator, said in a release. “A new five-year agreement, delivered a month before the old contract expires, points to a maturing in our labour relations. By the time the new contract expires in 2020 we will have enjoyed an unprecedented full decade of labour peace.”

The new five-year deal contains improvements in contract language, wages, benefits and pensions. USW Locals 6500 and 6200 represent 2,800 production and maintenance employees in Sudbury and Port Colborne.

Vale ups stakes in iron ore war – by Stephen Bartholomeusz (The Australian – May 1, 2015)

May 1, 2015

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

Of far greater consequence to Rio Tinto, BHP Billiton and Australia than Andrew Forrest’s complaints about their volume and cost-driven iron ore strategies is what the “other” major seaborne producer does in response to the crash in iron ore prices.

They might be encouraged by the commentary that accompanied Vale’s first-quarter results overnight.

The Brazilian group is the larger of the three major seaborne iron ore producers and is in the midst of an ambitious and expensive ($US17 billion) program to increase its production by 40 per cent, to almost 460 million tonnes a year from last year’s 327 million tonnes.

As with all the other producers, Vale is slashing costs to try to dampen the impact of the dive in iron ore prices and was able to proclaim that, for the first time in its history, cash costs were less than $US20 a tonne. A significant component of the $US13 a tonne reduction in cash costs was a 20 per cent, or $US4.50 a tonne, fall in freight costs.

Vale has traditionally been competitive with Rio (RIO) and BHP (BHP) in production costs and its ore is generally of higher quality. Its disadvantage has been distance from China and the impact that freight costs have had on its landed costs.

UPDATE 2- Vale posts $3.2 bln loss on iron ore’s relentless fall – by Stephen Eisenhammer (Reuters U.S. – April 30, 2015)

April 30, 2015

http://www.reuters.com/

(Reuters) – Brazil’s Vale SA , the world’s No. 1 producer of iron ore, on Thursday posted its third straight quarterly loss under pressure from falling prices of the commodity as demand growth from China slows.

The miner reported a net loss of $3.2 billion in the first quarter, compared with a net profit of $2.4 billion in the same period last year. The result compares with a forecast net loss of $2.4 billion according to a Reuters poll.

The first-quarter loss was wider than that in the third and fourth quarters of last year. Vale has been hit by a tumble in the price of the main steel-making ingredient .IO62-CNI=SI, which is near its lowest in a decade having fallen 47 percent in the past 12 months.

Prices have fallen due to huge new capacity from Brazil and Australia that is beginning to flood the market, just as growth slows of Chinese demand for steel.

As well as weaker iron ore prices, Vale said the depreciation of the Brazilian real against the dollar had cost the company $3.02 billion in the quarter.

Inquest: Jury urged to look at all mines with rec’s – by Carol Mulligan (Sudbury Star – April 30, 2015)

April 30, 2015

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

The project manager of the Mining Health, Safety and Prevention Review urged a coroner’s jury to consider making recommendations that will improve safety throughout all Ontario mines, not just at Vale’s Stobie Mine or at Sudbury mining operations.

Wayne DeL’Orme was the last witness to testify at the inquest into the deaths of Jordan Fram and Jason Chenier on June 8, 2011. Chenier, 35, was a supervisor for Vale and Fram, 26, was a miner. They were killed by a run of tons of muck that had been hung up in the No. 7 ore pass, let go and swamped the 3,000 level near the pass where they were working.

DeL’Orme told the three-woman, one-man jury Thursday that the role of the mining review was to look at all aspects of health and safety in underground mines and recommend ways to improve conditions.

It was prompted by a call for a full-blown mining inquiry after the deaths of the men at Stobie. A group called MINES (Mining Inquiry Needs Everyone’s Support) lobbied for a review, led by Wendy Fram, the mother of Jordan Fram. Thousands of postcards were sent to Labour minister demanding an inquiry.

Superintendent warned about water levels – by Carol Mulligan (Sudbury Star – April 29, 2015)

April 29, 2015

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

A former superintendent at Stobie Mine who toured the underground facility the day two men were killed at its 3,000-foot level said he left the mine about noon with concerns about excess water and plugged drain holes.

Larry Lauzon was brought in June 8, 2011, to offer advice to superintendent Keith Birney about safety practices. Stobie routinely experiences constant problems due to water being funnelled from surface.

Stobie supervisor Jason Chenier, 35, and miner Jordan Fram, 26, were killed by a run of tons of muck on the 3,000-level. The incident is believed to have occurred about 9:45 p.m.

Lauzon testified Tuesday at the seventh day of the coroner’s inquest into their deaths that he noticed on his tour varying depths of water accumulation at several levels of Stobie’s B division, where the men were overcome by muck. He talked with Birnie, cautioning him to take water issues seriously, and spoke with workers they encountered on their tour about safe mining practices.

As he was leaving the mine, Lauzon said he looked for the mine manager to see if he was aware of water conditions in the mine.

NEWS RELEASE: TRIBUTE TO KELLY STRONG, OUTGOING CHAIRMAN

April 29, 2015

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.

This week marks the end of the Ontario Mining Association Chairmanship for Kelly Strong. On behalf of our 86 member companies, we would like to express our gratitude, and applaud his commitment to fostering a resilient and effective association.

Kelly’s leadership is characterized by pragmatic thinking, a commitment to enhancing the credibility of our sector and to building constructive relationships at Queen’s Park. He has been particularly passionate about issues related to mine safety, promoting a competitive energy policy, and communicating with the public through initiatives such as So You Think You Know Mining.

Kelly also championed the need to redouble our efforts to share safety practices among member companies. He feels strongly that OMA committees are in the best position to learn from each other, and enabling a process to do so must be the top priority for the association.

With close to 25 years in the mining industry, Kelly began his career at Placer Dome’s Campbell Mine in Red Lake, where he was promoted to senior roles, including Chief Mine Engineer and Mine Captain. In 2001, he joined Vale, most recently serving as Vice President of the company’s Ontario and United Kingdom Operations.