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UPDATE 2-New Caledonia says to take legal action over Vale nickel spill – by Cecile Lefort and Melanie Burton (Reuters India – May 9, 2014)

http://in.reuters.com/

(Recasts with statement from New Caledonian provincial government)

May 9 (Reuters) – New Caledonia’s southern provincial government said on Friday it was starting legal proceedings against Vale over environmental damaged caused by an effluent spill at the miner’s nickel operations.

Vale said in an earlier statement that the spill contained some acid, but that subsequent test results carried out on a nearby river and the sea showed conditions appeared to have returned to normal.

The mining giant said it had suspended 80 percent of its nickel production in New Caledonia and planned a complete shutdown later on Friday, helping to send nickel prices up nearly 6 percent. A spokesman for Vale could not immediately be reached for further comment.

The southern province of New Caledonia was starting legal proceedings under its environmental code after the spill had killed about 1,000 fish, and swimming and fishing had been suspended in the area, it said in a statement. The local government did not say when it might allow Vale to resume operations, but said pollution had been contained to a river.

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Nickel at Two-Year High as Vale Ordered to Suspend Plant – by Agnieszka Troszkiewicz (Bloomberg News – May 8, 2014)

http://www.bloomberg.com/

Nickel reached a two-year high in London after Vale SA suspended activity in New Caledonia, stoking concern supply might fall short of reviving demand.

The suspension at the plant was ordered after a spill, according to the island archipelago’s Southern Province government. Nickel surged 41 percent in London trading this year after leading global miner Indonesia barred exports of raw ores in January. The potential for sanctions against Russia also aided prices, according to Societe Generale SA.

“Clearly with the nickel market already tightening on Indonesia and possible sanctions against Russia, this is adding to the general sense that the market is facing a supply shortage over the coming months, if not years,” Robin Bhar, an analyst at Societe Generale in London, said by phone today.

Nickel for delivery in three months gained 4.5 percent to $19,487 a metric ton by 1:48 p.m. on the London Metal Exchange after touching $19,786, the highest level since March 2, 2012.

The spill was yesterday and operations were suspended, Cory McPhee, a Vale spokesman in Toronto, said by e-mail today.

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Vale: Iron ore price to improve second half of the year – by Frik Els (Mining.com – May 1, 2014)

http://www.mining.com/

Murilo Ferreira, CEO of Brazilian mining giant VALE (NYSE: VALE), knows how to talk his book – he’s regularly been the most optimistic about the direction of the iron ore price of the large producers.

The Rio de Janeiro-based miner’s first quarter results disappointed with earnings falling 19% and sales of $9.5 billion coming in more than $1.5 billion below expectations in large part due to lower iron ore realized prices.

During the earnings call Ferreira was undeterred:

“We expect that the price in the second half will be better than the first half. One thing is for sure the price will not go below $110 on a sustainable basis. I think we have many time seen the price going below this level, but recovering very fast […] because those are the level that many producers mainly in China will leave the market

Ferreira, at the helm of the $70 billion firm since May 2011, does caution that since supply is going to be steady, his prediction would depend on improvement on the demand side “not only in China, but outside China.”

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Nickel bolsters Vale’s bottom line – by Jeb Blount (Reuters/Sudbury Star – May 1, 2014)

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

Brazilian miner Vale SA said on Wednesday that first-quarter profit fell by nearly a fifth, a result in line with expectations, after the price of iron ore, its main product, fell sharply.

Net income fell 19% to $2.52 billion, compared with $3.11 billion in the same quarter of 2013, according to a securities filing. The result was near the $2.59 billion average estimate in a Reuters survey of 13 analysts and comes after a $6.54 billion fourth-quarter loss.

Vale Chief Executive Officer Murilo Ferreira has been working to slash costs and unload unprofitable businesses for more than a year as a slowdown in Chinese growth limits demand for iron ore and other metals. China, the world’s largest steel producer, is the biggest market for iron ore, the main ingredient in steel.

Vale is the world’s largest iron ore producer and a major miner of nickel, copper and fertilizers. In Sudbury, Vale is the city’s largest employer and runs mines, mills and a smelter. Nickel and copper are the main minerals produced in Sudbury.

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War of Titans: Rio Tinto suing Vale over iron ore rights in Guinea – by Cecilia Jamasmie (Mining.com – April 30, 2014)

http://www.mining.com/

In a new and unexpected twist in the battle to control Guinea’s rich Simandou iron ore deposits, the companies once operating in the area have began a series of billion-worth lawsuits, with iron ore miner No.2 Rio Tinto (LON, ASX:RIO), suing the world’s largest producer Brazil’s Vale (NYSE:VALE).

The first one to shoot was Vale, which filed Monday an action against his former partner in Guinea BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz’s empire, before the London Court of International Arbitration, Swiss newspaper Le Temps reports (in French).

One of the paper’s sources said Vale is seeking a minimum compensation of US$1.1 billion, due to losses suffered because BSGR’s actions in Guinea. Last week, The West African nation concluded that BSG Resources obtained the Simandou and Zogota concessions through corrupt practices and decided to revoke all mining rights for both companies.

Vale had a 51% stake in the project, which acquire from BSGR in 2010 in a $2.5bn deal.The company however only paid $500 to Steinmetz’s firm, suspending all instalments left as soon as it learned of the accusations against its partner.

Guinea’s President Alpha Conde said Wednesday it was clear the Rio de Janeiro-based firm did nothing wrong, adding the mining giant is free to reapply to acquire rights to one of the largest untapped iron ore deposits in the world.

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UPDATE 2-Guinea president – Vale did no wrong, can bid to reclaim mining permits – by Stephanie Nebehay (Reuters India – April 30, 2014)

http://in.reuters.com/

GENEVA, April 30 (Reuters) – Guinea’s President Alpha Conde said on Wednesday he hoped Brazilian miner Vale would bid to reclaim two iron ore permits, because the company had not been involved in the alleged corruption that led to their cancellation.

Guinea cancelled the two mining concessions jointly held by Vale and BSG Resources earlier this month, after a government-appointed technical committee accused BSGR of obtaining the rights through corruption.

BSGR, the mining branch of Israeli billionaire Beny Steinmetz’s conglomerate, has denied the allegations and said it will seek international arbitration. Conde told reporters during a visit to Geneva on Wednesday that Vale, the world’s largest iron ore producer, had done nothing wrong.

“We will launch an open and transparent bidding process … Vale was not involved in the corruption or aware of it and we strongly hope that Vale will participate,” Conde said.

“Vale can come back through the bidding process,” he added.

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Vale considers action after iron ore rights revoked – by Tom Burgis (Financial Times – April 27, 2014)

http://www.ft.com/home/us

Vale is weighing legal action after Guinea formally cancelled multi-billion-dollar iron ore rights that the Brazilian mining group held jointly with Israeli tycoon Beny Steinmetz’s family conglomerate following a two-year corruption inquiry.

The revocation of the rights came two weeks after a government inquiry in the west African nation concluded that BSG Resources, the mining arm of Mr Steinmetz’s business empire, won them through a bribery scheme before agreeing to sell a majority stake in its Guinean assets to Vale for $2.5bn in 2010.

Vale, the world’s biggest iron ore miner, said on Friday that it was “actively considering its legal rights and options”. A spokesperson for the group declined to elaborate on its plans on Sunday.

BSGR denies wrongdoing and says it is the victim of a plot to seize its assets. The Guernsey-registered company has said it will “prove the allegations raised in Guinea’s rigged and illegitimate process are false” and has threatened to take Guinea to international arbitration. BSGR declined to comment on Vale’s statement.

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Skip malfunction closes North Mine – by Carol Mulligan (Sudbury Star – April 23, 2014)

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

Production at Vale’s Copper Cliff North Mine has been halted, and all but a skeleton crew of workers sent home as Vale personnel and United Steelworkers Local 6500 officials try to figure out why a skip hoist mechanism malfunctioned Sunday.

No one was injured when the conveyance used to bring ore from underground to surface travelled beyond ground, not stopping until it reached the concrete floor at the top of the head frame of the mine shaft.

Vale spokeswoman Angie Robson said the cause of the malfunction isn’t known and the extent of damage is still being assessed.  The area has been secured and production halted until repairs can be done, to ensure employee safety, she said.

In a statement, Robson said she didn’t know how long Copper Cliff Mine would be closed. USW Local 6500 president Rick Bertrand said Tuesday he has never seen anything like it in more than 20 years in mining. “Right now, everyone’s working together to see what caused it to happen,” Bertrand said.

No one was injured in the incident. Employees were above ground when the skip malfunctioned, said Robson. Bertrand said the skip, which could be filled with as much as 10 tons of ore, would weigh about 25 tons if full.

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Vale required to produce safety plans – by Carol Mulligan (Sudbury Star – April 16, 2014)

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

A Ministry of Labour inspector is requiring Vale Ltd. to produce safety plans for the front-line supervisor, superintendent and managers for the area in which millright Paul Rochette was working when he was killed April 6 at the Copper Cliff Smelter Complex.

The requirement to produce the documents by April 25 is part of a phase of examining documentation in the Ministry of Labour’s investigation of the death of the 36-year-old father of two in the crushing and casting plant at the complex. Rochette suffered severe head trauma and another millwright, a 28-year-old man, suffered a concussion and facial lacerations in the accident.

It is believed that a large piston or moil, that crushes nickel-copper ingots at high pressure moving along a conveyor belt, broke off and ended up in the system and may have struck the men. The company and the men’s union, United Steelworkers Local 6500, are conducting a joint investigation into the accident.

The Ministry of Labour and Greater Sudbury Police Service are also investigating. The Labour ministry has control of the scene at this point in the investigation.

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UPDATE 2-BHP and Australian rivals raise iron ore targets as competition grows – by James Regan (Reuters India – April 16, 2014)

http://in.reuters.com/

SYDNEY, April 16 (Reuters) – Australian miners are racing ahead with plans to expand iron ore production to capture more of the Chinese market for the steelmaking ingredient, amid strong competition from the world’s biggest supplier Vale of Brazil.

Efforts to beat already ambitious output targets comes as a crackdown in China on using commodities as collateral to raise cash risks unleashing iron ore sales from tens of millions of tonnes sitting in Chinese port warehouses, pressuring prices.

Fortescue Metals Group Ltd, which is raising production 57 percent this year, says its needs iron ore prices to stay between $110-$120 a tonne for the next 12-18 months in order to pay off a targeted $2.5 billion in debt.

The Australian Bureau of Resources and Energy Economics forecast an average price of $110 a tonne this year but only $103 a tonne in 2015. By 2016, Citigroup sees the price falling to $80.

Iron ore was quoted at $117.10 .IO62-CNI=SI on Wednesday. BHP, the world’s biggest diversified mining company, on Wednesday lifted full-year iron ore production guidance by 5 million tonnes to 217 million as it pushes ahead with new mine work in Australia.

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Vale Lands $2.8 Billion Brazil Funding for Iron Expansions (1) – by James Attwood (Bloomberg News – April 15, 2014)

http://www.bloomberg.com/

Vale SA (VALE5) secured 6.2 billion reais ($2.8 billion) of funding from Brazil’s state development bank for expansions at Carajas, the world’s largest iron-ore complex.

The BNDES loan will help finance Rio de Janeiro-based Vale’s railway network and a new mining and processing unit in Para state with annual capacity of 90 million metric tons, the bank said in a statement distributed by e-mail today.

Chief Executive Officer Murilo Ferreira is seeking to recover ground in the seaborne iron-ore market that it lost to Australian rivals BHP Billiton (BHP) Ltd. and Rio Tinto Group since 2007. Serra Sul, part of Carajas in northern Brazil, is the industry’s most expensive project ever at almost $20 billion.

The expansion and related distribution network will generate about 30,000 jobs at the peak of construction and is scheduled to start operating in 2016, BNDES said. It will be the first major iron-ore venture to fully replace in-mine trucks with conveyor belts, according to the miner.

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Funeral Thursday for millwright killed on job – by Carol Mulligan (Sudbury Star – April 9, 2014)

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

A mass of Christian burial will be held Thursday at 11 a.m. at St. Joseph Church in Chelmsford for the millwright killed on the job at Vale’s Copper Cliff Smelter Complex on Sunday. Paul Rochette, 36, died of severe head trauma at the scene after a large piston on a belt that was crushing ingots of smelted copper-nickel broke off between the smelting and matte processing stages.

Another millwright, a 28-year-old man, suffered a concussion and facial lacerations, but was in stable condition Monday at Health Sciences North’s Ramsey Lake Health Centre. There was no word on his condition Tuesday.

Rochette is survived by his two young children, Isabella and Skyler, parents Eddy and Sue Rochette of Val Caron, sister Angele Kirwan (Ryan) of Val Caron and brother Dan (Nadine Gosselin) of Napanee. In his obituary, it said Rochette will be missed by his best friend, Jessica Daoust, as well as by several nieces and nephews, and many friends, relatives and coworkers.

Visitation will be held Wednesday at Co-operative Funeral Home in Sudbury from 2-5 p.m. and from 7-9:30 p.m. Rochette was described Monday by Vale’s Kelly Strong as experienced, skilled and well trained for his job as an industrial mechanic at the smelter’s casting and crushing plant, as was the younger millwright who was injured.

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China’s steel meltdown will ripple around the world – by Carl Mortished (Globe and Mail – March 27, 2014)

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.

LONDON — There’s too much mining, and too much iron ore. Overproduction will take the price of steel’s raw material down by almost a third over the next few years, says Australia’s official forecaster. A supply glut could be just part of the problem, because a swathe of Chinese steel makers are burdened with too much debt – and Beijing is not keen on bailouts.

Australia’s iron triumvirate – Rio Tinto Group, BHP Billiton Ltd. and Fortescue Metals Group Ltd. – are ramping up production, and chasing market share at the expense of prices. The frenzied digging means that the country’s exports of ore are expected to rise by almost a fifth to 680 million tonnes this year.

Australia’s Bureau of Resource and Energy Economics is predicting that by 2019, the iron ore price will fall from last year’s average of $126 (U.S.) per tonne to $87.

The price has already declined by a fifth since the beginning of this year, moving close to $100 per tonne, amid concerns that China’s export engine is slowing.

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Mine promises hope for Thompson – by Jonathon Naylor (Brandon Sun – March 27, 2014)

http://www.brandonsun.com/

THOMPSON — As one door closes, will another open? That’s the fundamental question facing this hearty northern mining city.

Nickel giant Vale’s announcement that it will shut down its smelter and refinery at the end of 2014 (later revised to the end of 2015) raised grim speculation about Thompson’s future. But overlooked is the fact that while those surface operations are nearly tapped out, Vale is concentrating on its subterranean prospects.

“Our recent exploration activities have focused on increasing the confidence of near-infrastructure reserves and resources with the goal of maintaining current production levels from our existing mines,” says Ryan Land, the personable manager of corporate affairs for Vale’s Thompson operations. “This strategy will continue in the near term, and will be re-evaluated on an ongoing basis in response to nickel market conditions.”

Not only does Vale still run three Thompson-area mines — T-1, T-3 and Birchtree — there remains the irresistible promise of a fourth, known as 1-D, a $1- billion-plus mega-development.

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Stars Aligned for Nickel Bull Market – by Tim Maverick (Wall Street Daily – March 27, 2014)

http://www.wallstreetdaily.com/

Russian President Vladimir Putin’s actions have certainly stirred the pot in the energy market, as our Investment Director, Karim Rahemtulla, recently pointed out. And now, the ripples have spread far beyond the energy market to other commodity markets.

You see, the threat of Western sanctions against Russia has put renewed focus on a base metal that’s been in the doldrums for years… nickel.

That’s because the world’s largest producer of the metal, which is used to make stainless steel and nonferrous alloys, happens to be Mother Russia’s Norilsk Nickel (NILSY). NILSY mines a whopping 17% of the world’s nickel each year. Sanctions against such a huge source of nickel would indeed be a big deal, and share prices are reacting accordingly.

Nickel is suddenly in bull market mode, and prices recently hit their highest level since April at $16,230 per metric ton on the London Metals Exchange (LME). That represents a gain of more than 20% since nickel’s low on January 9, at $13,334 per ton, and meets the technical definition of a bull market.

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