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Business leaders plug Canada to Brazilian companies – by Stephanie Nolen (Globe and Mail – March 22, 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.

RIO DE JANEIRO — Canada is a stable, predictable country where “some of the rules are tough, but you know what they are,” and Brazilian companies will find it astoundingly easy to set up shop here, an audience of business leaders heard in Rio de Janeiro this week. That ringing endorsement came from no less an authority than Luciano Siani, chief financial officer of Vale SA, which has the highest-profile Brazilian investment in Canada.

Mr. Siani described his company’s move to set up potash operations in Saskatchewan in 2009: “We were promptly welcomed by a central agency of the government that provided us in a few months with a contract for gas, water, energy – there was no difficulty whatsoever to get all of the logistics for the project. And these are things that would have taken several years here in Brazil … it would be a nightmare.”

Mr. Siani made this unexpected plug for Canada at an event organized by the Canadian consulate in Rio, which brought BMO Financial Group vice-chairperson Kevin Lynch to town to talk up Canada as its “investment champion.” Canada’s trade with Brazil is currently $6-billion a year. That’s up 25 per cent from where it was five years ago, but it is still only the equivalent of four days of Canada-U.S. trade, Mr. Lynch noted.

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Going deep underground in Canada in search of dark matter – by Ivan Semeniuk (Globe and Mail – March 22, 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.

SUDBURY, Ont. — The deeper you go, the higher you fly. The Beatles lyric seems apt while I’m plunging down a mine shaft at 10 metres a second. My ears pop as the open-air elevator descends and the bare rock walls rush past in a blur.

After three minutes we’re two kilometres below ground, and the elevator stops. We’ve finally reached the level of SNOLAB. Located near Sudbury, Ont., it’s one of the world’s deepest laboratories and a place where scientists are hoping to answer a riddle of cosmic proportions: What is dark matter?

Unseen but ever present, dark matter makes up 85 per cent of all the stuff in the universe. Like an invisible conductor, its gravity guides the motions of galaxies and stars. When the universe began, dark matter helped to shepherd atoms together, ultimately making it possible for planets to form and life to emerge. Until we understand dark matter, we won’t really understand why we exist.

Like the Higgs boson, which was confirmed last year, or the gravitational echoes from the Big Bang reported earlier this week, the detection of dark matter would be a Nobel Prize-worthy find – one that would offer a genuinely new piece of information about the nature of reality.

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China doomsayers misguided and will be proven wrong – Vale CEO – by Juan Pablo Spinetto & David Biller (Mineweb.com/Bloomberg – March 20, 2014)

http://www.mineweb.com/

Vale CEO, Murilo Ferreira, says investors betting against China and its demand for iron ore from the company will be proven wrong.

Investors betting against China and the nation’s demand for iron-ore from top producer Vale SA will be proven wrong, Chief Executive Officer Murilo Ferreira said.

“The biggest enemy to our share price is a certain belief that China will be over,” Ferreira said during a presentation in Sao Paulo today. “They are once more betting against China as they did in 2004, 2005, 2006 and beyond and I think that people are going to fail again with their projections.”

Shares of Vale, which ships about half its iron ore and pellets to China, dropped to a five-year low earlier this month on concern a possible economic slowdown in the biggest buyer of the mineral will hurt sales. Iron-ore entered a bear market on March 7, losing 23 percent from a five-month high in August through today, as Australian miners including Rio Tinto Group boost supply and China tightens monetary conditions.

The world’s third-largest mining company has underperformed its main peers in the stock market for the past year as weakening demand growth in China and a multibillion-dollar tax dispute with Brazil weighed on investors’ confidence.

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NEWS RELEASE: One mine, a multitude of economic benefits

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.

Any new employer and enterprise in Ontario should be celebrated for the job and business opportunities it provides. Every one boosts the province’s economy, produces tax revenue to support infrastructure and provides stability to society. Because of the large scale involved, the start-up of a new mine multiplies the positive economic impact of most new businesses.

Last month, Vale officially opened the Totten nickel-copper mine in the Sudbury Basin. It is located in Worthington, which is about 40 kilometres west of Sudbury. Senior company management, employees, the Premier, the Minister of Northern Development and Mines, local First Nations leaders and municipal officials were on hand to show support and participate in the mine’s opening ceremonies. For sure this was an event worth celebrating, so let’s look at some of the numbers behind this new mine to see what benefits it offers.

The capital expenditures to bring the new mine into production were $760 million – more than three-quarters of billion dollars. The development of the project took seven years to complete. In order to put this sum into perspective, the 2014 operating budget for the City of Greater Sudbury is projected at $502 million and the projected operating budget for Windsor in 2014 is $722 million.

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Vale Stares At $1 Billion Investment Loss If Guinea Panel Recommendation Implemented (Forbes Magazine – March 12, 2014)

http://www.forbes.com/

Vale might find $1 billion in investments at the Simandou iron ore deposit wiped out if the Guinean government accepts and implements the recommendations of a technical committee. This committee had been set up to review mining concessions awarded under previous administrations.

It has recommended that Vale and its partner BSGR should be stripped of the rights to exploit Simandou because BSGR obtained the concession allegedly through corruption. The committee wants the tendering process for the northern part of Simandou to be conducted again. The committee will submit its recommendations to a strategic committee which will take a final decision.

If the recommendations are accepted, Vale’s investments worth $1 billion will have to be written off. It is not clear whether the company will be compensated for the amount it has already paid to BSGR for acquiring a 51% stake in northern Simandou in the first place. A re-tendering process will also witness Vale’s competitors like Rio Tinto and BHP Billiton competing for the deposit.

However, a more immediate concern would be the possibility of international arbitration because BSGR has threatened to take this route if stripped of its ownership. This would mean a lengthy and protracted legal battle which will simply delay progress with mining the disputed deposit.

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RPT-UPDATE 1-Panel says Guinea should strip BSGR, Vale of rights to iron deposit – by Silvia Antonioli, David Rohde and Saliou Samb (Reuters India – March 10, 2014)

http://in.reuters.com/

LONDON/CONAKRY, March 7 (Reuters) – A technical committee in Guinea has recommended the government strip BSG Resources (BSGR) and its partner Vale of the rights to exploit a giant iron ore deposit because the panel alleges BSGR obtained the concession through corruption, sources close to the matter said.

The latest development in a saga surrounding one of the world’s largest mining deposits casts uncertainty over the future of the sought-after Simandou, a mine that could help one of Africa’s poorest countries to prosper.

It also raises concerns over the position of Brazilian miner Vale, which, according to a source close to the company, has spent more than $1 billion in its Guinean venture and risks seeing its investment and efforts wiped away.

BSGR vigorously denied the allegations of wrongdoing and said it believes the committee’s procedure is part of a predetermined and orchestrated plan to expropriate the company’s mining rights.

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Update 1 – Vale back at work on Ontario nickel project – by Allison Martell and Euan Rocha (Reuters U.S. – February 3, 2014)

http://www.reuters.com/

(Reuters) – Vale SA’s Canadian unit has resumed work on its Copper Cliff Deep nickel project in the Sudbury basin and expects to complete a feasibility study by the end of the year, a company executive said on Monday.

The project is expected to cost somewhere in the range of a billion dollars to build and could be one of the unit’s lower-cost operations, said Kelly Strong, Vale’s vice president of Ontario and UK operations.

If it goes ahead, the revised project, now dubbed Copper Cliff Mine, would be another boost for the Sudbury basin in northern Ontario, where Vale recently opened Totten, its first new mine in more than 40 years. “It’s going to look a little bit different than the original project – it’s going to be three phases,” said Strong.

The project would merge and expand what are now two separate mines. Its earlier incarnation was put on hold in the wake of the 2008 financial crisis. In 2010, Vale Canada said it was re-evaluating the project, though work did not proceed.

The first of the three phases could start producing within the next two to three years, Strong told Reuters. A final go-ahead will depend on the project securing a green light from Vale’s board in Brazil.

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UPDATE 3-Vale vows spending austerity as metals price outlook improves – by Jeb Blount and Guillermo Parra-Bernal (Reuters U.S. – February 28, 2014)

http://www.reuters.com/

RIO DE JANEIRO/SAO PAULO Feb 27 (Reuters) – Vale SA , the world’s largest iron ore producer, will continue reining in costs this year even as the outlook for prices and sales volumes is improving, its chief executive officer said on Thursday.

“We plan to continue with austerity,” Murilo Ferreira, the company’s CEO told investors at a conference call to discuss fourth-quarter earnings.

The company will also continue efforts to sell underperforming units and control investments as it sharpens its business focus on iron ore, responsible for about three-quarters of revenue and nearly all of its profit.

His remarks come as Vale reported a net loss of $6.45 billion in the quarter, its largest since Brazil’s government sold control to investors in 1997 and more than twice the shortfall of the year-earlier period. The loss was due to non-recurring events such as a one-time income tax settlement and the write-off of an abandoned potash project in Argentina.

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Vale Rallies as Chinese-Led Iron Ore Demand Boosts Earnings – by Juan Pablo Spinetto (Bloomberg News – February 27, 2014)

http://www.bloomberg.com/

Vale SA (VALE), the world’s largest iron-ore producer, rallied the most in three weeks after fourth-quarter earnings before taxes and other items beat estimates on rising prices for the steel-making material.

Vale rose as much as 2.7 percent to 29.81 reais in Sao Paulo today, the most intraday since Feb. 6, before closing at 29.31 reais. The gain pared its loss this year to 10 percent. The benchmark Ibovespa index of Brazilian shares rose 2.2 percent.

The world’s third-largest mining company is increasing cash generation after Asian-led demand pushed up average iron-ore prices 12 percent in the fourth quarter. While iron ore declined this quarter because of rising supplies and monetary constraints in China, it will remain at profitable levels for Vale for a sustained period of time, Executive Director for Ferrous and Strategy Jose Carlos Martins said.

“The price will continue to be very favorable and very profitable for Vale,” Martins told analysts on an earnings conference call today. “There is a very strong resistance in price in the range of local Chinese iron-ore costs.”

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UPDATE 2-Vale quarterly loss more than doubles after tax payment – by Jeb Blount (Reuters U.S. – February 27, 2014)

http://www.reuters.com/

Feb 26 (Reuters) – Vale SA, the world’s No. 3 mining company by market value, said on Wednesday its net loss more than doubled in the fourth quarter after it took a $6.5 billion charge for an income-tax settlement with the Brazilian government and wrote off part of a failed potash investment.

Vale lost $6.45 billion in the three months ended Dec. 31 compared with a loss of $2.62 billion in the fourth quarter of 2012. The loss was well above the $3.83 billion average loss forecast of seven analysts in a Reuters poll and its worst quarterly since at least 1997 when Brazil’s government sold the company to private investors.

Vale’s full-year profit was $584 million in 2013, the worst annual result in more than a decade.

While the tax settlement resulted in one of the company’s worst ever losses, Vale continues to dispute the payments, which it considers double taxation of its overseas operations. By making the payment in November it was able to cut its potential liability in half. If a protest against the charges prevails in Brazil’s Supreme Court, the company has said it expects a rebate.

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Vale Sees Nickel Over $20,000 a Ton on Indonesia Ban – by Liezel Hill (Bloomberg News – February 25, 2014)

http://www.bloomberg.com/

Nickel will climb significantly in 2015 and may advance to more than $20,000 a metric ton in the next few years because of Indonesia’s ban on ore exports, said Vale SA (VALE5), the world’s second-biggest producer.

The restrictions that Indonesia put in place last month probably won’t be eased, Peter Poppinga, executive director for base metals at the Rio de Janeiro-based company, said in a Feb. 21 interview. Big price movements are unlikely this year because of the high level of stockpiles in China, he said.

The largest nickel-ore producer banned the export of unprocessed ores in January as it tries to transform itself into a maker of higher-value products. Nickel, used to make stainless steel, climbed 3 percent this year, beating all other base metals in London as Barclays Plc forecast that the curb will help to shift the global market to a deficit from 2015. Vale last week opened its Totten nickel mine in Ontario after investing about C$760 million ($686 million) in the project.

“Next year I see the nickel price jumping quite significantly,” Poppinga said in the interview at the mine. “It is about Indonesia today, everybody knows that. The ore ban is in place and it’s holding, and I think the authorities in Indonesia are very reasonable and very serious about that.”

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Vale’s Totten Mine opens after three-year delay – by Jonathan Migneault (Sudbury Northern Life – Feb 21, 2014)

http://www.northernlife.ca/

It started as a hole in the ground, but after a $760-million investment, Vale’s Totten Mine had its official opening Friday.

Dignitaries from around the province, including Ontario Premier Kathleen Wynne, Sudbury Mayor Marianne Matichuk, and Michael Gravelle, the province’s minister of Northern Develoment and Mines, gathered around the ceremonial ribbon to welcome Vale’s sixth mine in the Sudbury region, and its first to open in nearly 40 years.

Subury MPP Rick Bartolucci, Ontario’s former minister of Northern Development and Mines, had was not present at the ceremony due to a prior commitment. “The 200 jobs that are being created as a result of the Totten Mine will support families and will fuel the economy of this region,” Wynne said at the grand opening.

The premier said the provincial government has an important role to play in developments like the Totten Mine by creating a regulatory environment that encourages businesses to invest and prosper.

The mine was supposed to open in 2011, but a number of factors, including the global economic crisis in 2008 and 2009, slowed Vale’s progress.

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Vale ‘Not in Hurry’ in Over Canada Glencore Negotiations – by Liezel Hill and Juan Pablo Spinetto (Bloomberg News – February 22, 2014)

http://www.bloomberg.com/

Vale SA (VALE5), the world’s second-biggest nickel producer, said it’s not in a rush to reach an agreement with Glencore Xstrata Plc to combine operations in Canada’s Sudbury basin.

“We are studying and we are talking but we are not in a hurry,” Peter Poppinga, Vale’s head for base metals, said yesterday in an interview.

Vale and Glencore, the world’s third-largest refined nickel producer, last year initiated talks on jointly operating mines, mills and smelters in the Sudbury area, about 400kilometers (250 miles) north of Toronto, Poppinga said in November. Vale Chief Executive Officer Murilo Ferreira told reporters on Dec. 18 his Rio de Janeiro-based company expected to make a decision on a possible combination in the first quarter.

Poppinga said yesterday he didn’t expect an agreement “early this year,” and declined to comment further on the talks. Glencore declined to comment on the state of talks with Vale in an e-mail statement.

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Accent: Sudbury’s [Vale] Totten a space-age mine – by Laura Stricker (Sudbury Star – February 22, 2014)

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

In major mining centres, the opening of a new mine is no small feat. Especially when that mine is a company’s first to open in the area in more than four decades – and took seven years to get production-ready.

On Friday, Vale’s Totten Mine, located in the mineral-rich Sudbury Basin, officially opened to great fanfare. The $760-million mine is the company’s sixth in the basin and its first to use the newest, state-of-the-art mining technology.

“It integrates many of the advances that have been developed since the last Vale mine was built 40 years ago. These technical advances will continue to position Sudbury hard rock miners as among the most productive and competitive in the world,” said mining analyst Stan Sudol. “It also ensures that the Totten Mine is at the lower end of the cost curve.

“This is very positive for the Sudbury Basin. Totten confirms that Sudbury is still the richest mining district in North America, bar none. Because so much high-tech innovation has been included in the development of Totten, it also indicates Sudbury’s becoming a global Silicon Valley of underground knowledge, expertise and research and education.”

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New Sudbury mine ‘very important’ to Vale – by Carol Mulligan (Sudbury Star – February 22, 2014)

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

Vale will continue to invest in Canada despite bad market conditions and low nickel prices because of the strength of its assets, and those assets aren’t just its ore bodies and its operations, said Peter Poppinga.

Vale officially opened its newest Sudbury operation Friday, the $760-million Totten Mine, a nickel and copper producer. Totten is state of the art, fully automated, has an outstanding safety record and excellent environmental standards.

“But Totten for us actually means much more,” said Poppinga, president and chief executive officer of Vale Canada, and executive director of Vale Base Metals and Information Technology for Vale SA.

“When I (say) asset I don’t mean only ore, I don’t only mean mines or surface facilities. I actually also mean the people, the workforce, the motivated workforce, and I also mean the stability of the business environment and the regulatory environment.

“This is very important for us,” Poppinga told more than 100 invited guests in the warm room of Worthington mine, 40 minutes west of Sudbury.

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