Vale – Page 51 – Republic of Mining

Bearish Bets on Vale Surge to Record High as Iron Ore Retreats – by Julia Leite and Juan Pablo Spinetto (Bloomberg News – March 18, 2015)

March 19, 2015

http://www.bloomberg.com/

(Bloomberg) — Traders are increasing bets that Vale SA is poised for further declines after its shares hit a 10-year low.

Short interest in American depositary receipts from the world’s largest iron-ore producer jumped to a record 27.4 percent of shares outstanding Monday, according to data compiled by London-based Markit and Bloomberg. The ADRs added 0.2 percent to $6.12 at the close of trading in New York, paring losses in 2015 to 25 percent. They dropped 46 percent in 2014.

Prices for iron-ore, a key ingredient in steelmaking, have plunged 71 percent since peaking in 2011, helping send Vale shares to the lowest since November 2004 last week. Demand for the material hasn’t kept up with increased production by Vale and rivals Rio Tinto Group and BHP Billiton Plc amid a slowdown in economic growth in China, the biggest consumer.

“People are concerned, with some investors betting there’s too much iron ore and not enough Chinese demand,” said Ari Santos, an equity trading manager at H. Commcor in Sao Paulo. “And if ore falls, Vale suffers.”

China, which accounts for about half of Vale’s shipments and for more than two-thirds of global iron-ore imports, has set a 2015 economic expansion goal of about 7 percent, the lowest in more than 15 years.

Vale CEO Ferreira Said to Be in Talks to Head Petrobras Board – by Anna Edgerton and Sabrina Valle (Bloomberg News – March 10, 2015)

March 12, 2015

http://www.bloomberg.com/

(Bloomberg) — Vale SA Chief Executive Officer Murilo Ferreira is being sounded out to take over as chairman of the board of Brazil’s beleaguered oil producer Petroleo Brasileiro SA, people with knowledge of the discussions said.

Government representatives have spoken with Ferreira, 61, about replacing former Finance Minister Guido Mantega as chairman, according to three people who asked not to be named because the talks aren’t public. The next Petrobras board meeting in which a new leader could be confirmed will be on March 23.

Ferreira would be the first executive since at least 2003 to head the state-controlled oil producer’s board, replacing a political appointee who was known for his obedience to President Dilma Rousseff. After last month choosing Aldemir Bendine, a state banker backed by Rousseff’s party, to replace Maria das Gracas Foster as chief executive officer, the government recognizes the importance of choosing a market-friendly name to lead the board, one of the people said.

“He’s a great Brazilian executive, competent, with credibility, a good name for Petrobras,” consultant David Zylbersztajn, a former oil regulator who worked with Ferreira in the early 2000s, said in a phone interview from Rio. “Knowing Murilo, I can say he can stand his own.”

Vale and Petrobras press offices declined to comment on the possibility of Ferreira joining the oil company’s board.

Future Fumes?: Will Sudbury super stack be needed by Vale after retrofit project? (Canadian Mining Journal – February/March 2015)

March 11, 2015

http://www.canadianminingjournal.com/

At more than 388m high and just over 36m wide at base, Vale’s “Super Stack” in Sudbury is unquestionably the city’s most outstanding feature.

In fact, it’s also one of Northern Ontario’s more outstanding features because it’s literally the tallest structure in the north and can be seen for miles from every direction as it towers over the city.

Even Sudbury’s world-renown “Big Nickel” pales by comparison when it comes to size and impressive landmarks. Built from almost 16,500m3 of concrete and strengthened with nearly 956 tonnes of 38mm and 13mm re-bar, the stack is a solid monument that has withstood the harshest of conditions that Mother Nature could throw at it.

Extreme cold and blowing snow, fierce winds and driving rain, heat and lightning, and even ground-shaking tremours, have barely made a mark on the stack. And, the fact that it’s also lined from top to bottom with 6.4mm nickel stainless steel and that its walls are 1.1m thick at the base and 267mm at the top, have all added to make the stack almost indestructible.

It was clearly built to last and since it started rising on the horizon in 1970, and subsequently going into service on August 21, 1972, the stack has performed as planned by safely carrying sulphur dioxide from INCO’s (now Vale’s) Copper Cliff smelter high into the atmosphere and away from the city.

Vale Posts Quarterly Loss Amid Declining Iron-Ore Prices – by Juan Pablo Spinetto (Bloomberg News – February 26, 2015)

February 26, 2015

http://www.bloomberg.com/

(Bloomberg) — Vale SA, the world’s largest iron-ore producer, reported a second consecutive quarterly loss as prices fell and Brazil’s weakening currency increased debt costs. Shares fell.

Vale’s fourth-quarter net loss narrowed to $1.85 billion, or 36 cents a share, from a record loss of $6.45 billion, or $1.26, a year earlier, the Rio de Janeiro-based company said Thursday in a statement before markets opened.

Vale is boosting iron-ore output to a record, helping to expand a global glut as the top producers squeeze smaller miners for market share amid slowing demand from China. While a declining currency in Brazil and Canada helps Vale cut expenses at its main operations, it boosts the cost of servicing dollar-denominated debt. Foreign exchange and monetary losses curbed profit by $1.26 billion, the company said.

While Vale posted a “solid” performance in its iron-ore unit, the base metals business including nickel and copper operations performed below expectations, Bank of America analysts led by Thiago Lofiego said.

“Base metals posted weak results,” the analysts said in a note to clients Thursday. “A more intense cash-burn due to lower iron ore prices and still-high capex should result in increasing leverage and subdued dividends in the coming years.”

Nunatsiavut president Sarah Leo ‘quite disturbed’ over Vale agreement – (CBC News Newfoundland – February 25, 2015)

February 25, 2015

http://www.cbc.ca/news/canada/newfoundland-labrador

The Inuit government in Labrador isn’t happy with the announcement of changes to the Voisey’s Bay agreement, which will allow Vale to continue exporting unprocessed ore from the massive nickel mine.

Nunatsiavut president Sarah Leo said the Newfoundland and Labrador government was required to consult the Inuit because the mine is on land connected to their land agreement with the provincial and federal governments.

“We should’ve been consulted — I mean, it’s in our backyard. It’s right here,” she said. “We have a land claims agreement that specifically has a chapter dedicated to the Voisey’s Bay project,” Leo told CBC News. “So, it’s very important to us that we have an understanding and are involved in what’s happening with the project.”

On Tuesday, Natural Resources Minister Derrick Dalley and Vale VP Stuart Macnaughton announced that they were amending the Voisey’s Bay Development Agreement to allow the company to send nickel concentrate from the mine in Labrador to Ontario and Manitoba for processing.

The delay is connected to delays in completing Vale’s massive processing facility in Long Harbour, in Newfoundland’s Placentia Bay.

Vale to pay Newfoundland $230-million for nickel export boost – by Sue Bailey (Canadian Press/Globe and Mail – February 25, 2015)

February 25, 2015

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

ST. JOHN’S — Mining giant Vale SA will pay Newfoundland and Labrador $230-million for letting the company export more Voisey’s Bay nickel concentrate while a processing plant ramps up in the province.

Vale will be allowed to export another 94,000 tonnes that must be replaced later, Natural Resources Minister Derrick Dalley said Tuesday.

The move will mean $200-million in compensation from Vale over three years. Another $30-million in community investments from the company are to be negotiated with the province. Complex design and other issues have delayed full operation of the Long Harbour processing plant, about 120 kilometres west of St. John’s.

The $4.3-billion facility will be an asset for years to come, Mr. Dalley said. The announcement is on top of other export allowances in 2013 and 2002, totalling 633,000 tonnes in potential processing exemptions that must be replaced.

Stuart Macnaughton, Vale’s vice-president of operations in the province, said the added flexibility means mining at Voisey’s Bay in Labrador will continue while the plant in Long Harbour is finished.

Vale gets extension for exporting Voisey’s Bay ore – by Terry Roberts, CBC News Newfoundland – February 24, 2015)

February 24, 2015

http://www.cbc.ca/news/canada/newfoundland-labrador

Long Harbour nickel plant now schedued for full production by 2018-19

Vale has won approval from the Newfoundland and Labrador government to export more nickel concentrate from its mine at Voisey’s Bay, as a result of delays in commissioning its $4.25 billion processing plant in Long Harbour.

The company will pay $200 million over four years in compensation for the right to export an additional 94,000 tonnes of nickel concentrate from its mine on Labrador’s northern coast to its other processing facilities in Ontario and Manitoba. Vale will contribute another $30 million to a community fund.

The exemption gives Vale flexibility in its efforts to bring its nickel processing plant in Long Harbour, in Newfoundland’s Placentia Bay, up to full capacity, and to avoid any production interruptions at the Voisey’s Bay mine, which is one of the Canada’s most significant nickel finds.

The latest amendment to the Voisey’s Bay Development Agreement was announced Tuesday morning by Natural Resources Minister Derrick Dalley and Stuart Macnaughton, Vale’s vice-president of operations in Newfoundland and Labrador.

“Had the export cap not been increased, we would have been left with no choice but to stop operating in Labrador for up to 18 months and not resume normal operations at Voisey’s Bay until Long Harbour was able to process larger quantities of nickel concentrate from Voisey’s Bay,” said Macnaughton.

Low dollar could help Sudbury miners in labour negotiations – by Staff (Northern Ontario Business – February 19, 2015)

February 19, 2015

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

A low Canadian dollar could work in the United Steelworkers’ favour as they enter into contract negotiations with Vale in Sudbury, said a Laurentian University commerce professor.

The current five-year collective bargaining agreement between the United Steelworkers Local 6500 and Vale will expire at midnight on May 31, 2015. Jean-Charles Cachon said the low Canadian dollar should give the Steelworkers more bargaining leeway when it comes to salaries.

The lower Canadian dollar decreases Vale’s operational costs in Sudbury, Cachon said. “As workers are paid in Canadian dollars, any weakening of the Canadian dollar is to the advantage of Canadians,” he said.

“It’s becoming a seller’s market in terms of the job market,” Cachon said. “There are less and less people waiting to work for the mining industry. They (Vale) are probably going to have to pay a premium for employees in the next few years.”

Cachon said he expects the Canadian dollar to stay well below parity as long as oil prices remain low. But while the low dollar might give workers more negotiating room, Cachon said he does not expect Vale to give in without a fight.

UPDATE 1-Brazil’s Vale beats iron ore forecast, takes nickel crown – by Stephen Eisenhammer (Reuters U.S. – February 19, 2015)

February 19, 2015

http://www.reuters.com/

Feb 19 (Reuters) – Brazilian miner Vale SA said on Thursday it produced 319.2 million tonnes of iron ore in 2014, beating its forecast for the year, as it begins to boost production after years of stagnation.

Vale, the world’s largest producer of iron ore, produced 83 million tonnes of the steelmaking ingredient in the fourth quarter, an increase of 2 percent from the same period a year earlier.

Full-year iron ore production rose 6.5 percent compared with the previous year, breaking through the 300 million-tonne-a-year mark, where it has been practically frozen since 2007. Vale had forecast output of 312 million tonnes for the year.

The growth in production will be more than offset by falling iron ore prices, which fell by half last year as a massive increase in Australian capacity coincided with a slowdown in China, the main market for iron ore.

Vale took the crown for the world’s biggest producer of nickel from Russia’s Norilsk Nickel, reaching 275,000 tonnes of the ingredient used to make stainless steel in 2014. That was its best performance since 2008, despite falling short of guidance.

INTERVIEW-Vale’s CEO rules out nickel IPO, writedowns – by Stephen Eisenhammer and Marta Nogueira (Reuters U.K. – February 11, 2015)

February 11, 2015

http://uk.reuters.com/

Feb 10 (Reuters) – Vale’s chief executive said on Tuesday that a possible initial public offer of part of its nickel division was off the cards for now due to low prices for the commodity, but that other asset sales could be expected over the coming year.

The Brazilian miner is under pressure to resolve a cash-flow squeeze this year as it wrestles to fund mega-projects in the midst of a price slump in its core product: iron ore. But Chief Executive Murilo Ferreira said that the option of spinning off part of its base metals division, which had been outlined in December, was no longer attractive.

“We’re not going to sell it on the cheap … You can forget that possibility,” Ferreira said in an interview at the Rio de Janeiro offices of the world’s largest iron ore producer.

He added that a sale of the entire division was not being considered, and dismissed reports that former Xstrata CEO Mick Davis might be looking to buy it through his startup, X2. “It has been at least two years since I have seen our friend Mick Davis,” he said.

Cash will be raised through other means and Ferreira said the market could expect an announcement of some form of divestment in March and another in the second half of the year. He did not elaborate.

Rio Tinto to defy mining pain with big payout while rivals suffer – by Sonali Paul and Silvia Antonioli (Reuters U.S. – February 10, 2015)

February 10, 2015

http://www.reuters.com/

MELBOURNE/LONDON – (Reuters) – Rio Tinto is expected to star among the top five global miners with a return of billions of dollars to shareholders at its annual results, even as the firm is set to report its worst half-year profit since 2009.

It will likely be all downhill for investors in the megaminers after Rio Tinto reports on Feb. 12 as they are all tipped to report sharp slides in earnings, gutted by weaker prices for almost everything they produce.

Iron ore will be the biggest source of pain, even though it remains the most lucrative product for Brazil’s Vale, Rio Tinto and BHP Billiton, and investors’ main concern is how the big miners are going to shore up cash flow. The top three producers have wounded the industry by flooding the market with new supply, knocking iron ore prices down nearly 50 percent in 2014, a steeper slide than anyone anticipated.

While boosting output, Rio has bolstered its cash flows by slashing costs, cutting capital spending and reducing debt, putting it in the best position to return cash to shareholders. BHP took the same steps, but has been whacked by plunging oil prices.

“In our opinion Rio has significantly greater flexibility (than BHP) at this point in time to pursue short-term capital management initiatives,” said Ben Lyons, a portfolio manager at ATI Asset Management.

Sudbury needs premier needs to act boldly [turn Laurentian in global Harvard of hardrock mining] – by Stan Sudol (Sudbury Star – February 9, 2015)

May 4, 2015February 9, 2015

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

Note: this is the second of two parts.

Sudbury: Paris of the Mining World

While I can’t remember who coined the phrase, “Sudbury, the Paris of the Mining World” – I wish I had been that clever – there is an amazing amount of truth to the statement. Obviously, in no uncertain terms, does any part of Sudbury remind anyone – even in a drugged or drunken state – of Paris.

However, my lake-filled, mid-sized hometown does have a wide variety of retail, tourist, educational and other amenities that most tiny isolated mining towns do not and it is located only 400 km north of Canada’s largest city, Toronto.

A few years ago, a colleague who moved from Red Lake to Sudbury almost considered herself in “mining heaven” with the abundance of amenities not found in that tiny gold mining centre.

In addition to the Ontario government’s new differentiation and international student outreach policies, there are many other reasons why all post-secondary mining programs should be relocated to Sudbury’s Laurentian University.

Iron Ore Extends Rout as China Slows, Banks Reduce Forecasts – by Jasmine Ng (Bloomberg News – January 26, 2015)

January 26, 2015

http://www.bloomberg.com/

Iron ore retreated to the lowest level in more than five years as a slowdown in China hurt the outlook for demand in the world’s biggest user while the largest mining companies add to supply, boosting a surplus.

Ore with 62 percent content delivered to Qingdao, China, tumbled 4.3 percent to $63.54 a dry metric ton, according to data by Metal Bulletin Ltd. That’s the lowest price on record going back to May 2009, and was the biggest one-day fall since Nov. 18. The commodity is 11 percent lower this year.

The raw material has been in a bear market since March after Rio Tinto Group (RIO), BHP Billiton Ltd. and Vale SA spent billions of dollars to boost low-cost output even as China slowed. Goldman Sachs Group Inc. joined global banks on Friday in cutting price forecasts for 2015, predicting a return to a bull market is probably more than a decade away. The love affair between China and iron ore is cooling, the bank said.

The decline in prices is mainly due to “slower demand growth for steel in China, together with the expected new iron ore supply,” Vanessa Lau, a Hong Kong-based analyst at Sanford C. Bernstein Ltd., said before the figure was released. Steel mills in China are also cutting output before the Lunar New Year, putting further pressure on prices, she said, referring to the national holiday next month when industrial activity slows.

Goldman Joins Banks Cutting Iron Ore Outlook on Global Glut – by Jasmine Ng (Bloomberg News – January 23, 2015)

January 23, 2015

http://www.bloomberg.com/

First Citigroup Inc., then UBS Group AG, now Goldman Sachs Group Inc. For iron ore, which plummeted 47 percent in 2014, the cuts to price forecasts from global banks just keep coming in the opening weeks of the year.

The steel-making ingredient may average $66 a metric ton this year from an earlier estimate of $80, Goldman Sachs said in a report dated Jan. 23. This is the first time the New York-based bank has reduced its 2015 prediction since March 2013, and it’s at least the fifth bank this month to lower estimates, citing rising seaborne supplies and weaker demand growth from China, the biggest user.

The iron-ore surplus emerged last year after the largest miners including Rio Tinto Group (RIO), BHP Billiton Ltd. and Vale SA (VALE5) invested billions of dollars to boost output and as China grew at the slowest pace in more than two decades. Cheaper energy costs and depreciating currencies may delay supply cuts needed to rebalance the market, causing prices to extend losses, said Citigroup and UBS, which pared estimates for the commodity by as much as 22 percent.

“Significant overinvestment to date will ensure that the market is well supplied, while demand from the Chinese steel sector is maturing,” Goldman analysts including Christian Lelong wrote in the report. “A painful war of attrition awaits” the iron ore industry as less competitive mines shut, the analysts said.