Vale – Page 72 – Republic of Mining

Nickel supply continues to spring surprises – by Andy Home (Reuters – November 2, 2012)

November 3, 2012

http://www.reuters.com/

(Reuters) – Nickel has been the underperformer of the industrial metals traded on the London Metal Exchange (LME) for much of this year. The stainless steel input fell harder during the summer sell-off and rallied less than the others on the QE3-fuelled bounce in September.

Since then the broader price pull-back has seen three-month nickel crash back to below $16,500 per tonne, a level where it is challenging the top end of the production cost curve.

The reason for this consistent underperformance is not just concern about the state of the stainless steel sector. After all, global growth fears have affected just about every industrial commodity from aluminum to iron ore to zinc.

What has marked nickel out since the start of the year and what continues to weigh so heavily on prices is the market’s supply side. Supply is expected to exceed demand by 50,000 tonnes this year, according to the International Nickel Study Group.

It will do so again next year but the scale of surplus will depend on the success of a wave of new projects currently entering production, a classic commodity example of bad timing.

[Sudbury] Vale exec [John Pollesel] ousted – – by Carol Mulligan (Sudbury Star – Novemeber 1, 2012)

November 1, 2012

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

Vale’s corporate spokesman denied 10 days ago that John Pollesel’s head was on the chopping block. But then, on Wednesday, the company confirmed the role of the Sudbury-born director of Vale’s Base Metals North Atlantic Operations was “no longer required.”

Vale spokesman Cory McPhee told The Star on Oct. 21 there was no truth to a widely circulating rumour that Pollesel was being cut by the company.

Wednesday, Vale’s Sudbury spokeswoman, Angie Robson, said base metals at Vale “is in the process of a business-wide review to address some significant short-term challenges.

“Part of that effort involves reshaping and restructuring the business to position ourselves for long-term success and sustainability,” she said.

Vale’s parent company, Vale SA, has said of late, it is determined to ensure all operations are self-sustaining, prompting decisions such as winding down production at the 100-year-old Frood Mine.

Gravelle calls for Westray application [in Vale deaths] – by Carol Mulligan (Sudbury Star – October 31, 2012)

October 31, 2012

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

The Westray provision of the Criminal Code of Canada isn’t a useful law unless it’s applied, says the federal New Democrats’ mining critic, Nickel Belt MP Claude Gravelle.

If companies know charges are not going to be laid under the bill, “what have they got to lose?” asked Gravelle.

The Westray bill was created as a result of the 1992 Westray coal-mining disaster in Nova Scotia in which 26 miners were killed after methane gas ignited, causing an explosion.

Despite serious safety concerns raised by employees, union officials and government inspectors, the company didn’t make the changes necessary to avoid the tragedy.

That eventually led to the passage of the bill, under which company executives can be criminally charged if employees are injured or killed because of their failure to take action. United Steelworkers Local 6500 called earlier this year for charges to be laid under the Westray provision against Vale Ltd. executives in the June 8, 2011 deaths of two men at Stobie Mine.

‘Rail-veyors’ and robots [mining innovation] – by Julie Gordon (Reuters/Sudbury Star – October 29, 2012)

October 29, 2012

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

In an office trailer parked outside a mine shaft in a Copper Cliff Mine, operator Carolyn St-Jean leans back in her chair and monitors a machine loading nickel-rich ore into rail cars deep underground.

Once filled, the automated train will snake through a series of narrow tunnels, emerge from a rocky outcropping, then loop past St-Jean’s window and dump its payload for sorting.

Vale SA, the Brazilian company that owns the mine near this nickel-rich area, has spent nearly $50 million in two years to install and test the “ra i lveyor.” The company believes the transport system will revolutionize how it builds and extracts new mineral deposits.

The equipment is made locally by Rail-Veyor Technologies Global Inc. It is one of many mining technologies developers hope will allow future production to be run almost entirely by people safely above ground.

Such advances may prove crucial as easy-to-exploit deposits run dry and miners drill deeper in more remote places to supply China, India and other emerging economies. The technology could make mining cheaper and safer, avoiding the need to dig wide tunnels and hire large numbers of expensive, skilled workers.

Sudbury nickel mine stops operations at year’s end due to falling prices – by Andrew Livingstone (Toronto Star – October 20, 2012)

October 25, 2012

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Operations at the Sudbury mine site where 40 per cent of the nickel used to make allied artillery during the First World War came from will be suspended at the end of the year.

The Frood site, which has been in operation for over a century, will be closed because of recent decline in the price of nickel and market volatility.

Since 2011, the price of nickel has dropped 30 per cent, 17 per cent this year alone. The closure will not lead to any job losses, said McPhee. 85 workers are currently employed at the site and when it closes, will be reassigned to other jobs within the Sudbury operation.

The Frood site has been mined for more than 100 years, but the ore now has low value and the company had been mining at a loss.

Vale profits to drop 61%: Analysts – by Jeb Blount and Sabrina Lorenzi (Reuters/Sudbury Star – October 23, 2012)

October 24, 2012

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

RIO DE JANEIRO (Reuters) – Vale SA (VALE5.SA: Quote, Profile, Research, Stock Buzz) the world’s No. 2 mining company, is expected to report that third-quarter profit tumbled 61 percent from a year earlier as output slipped and the price of iron ore and other metals dropped to three-year lows.

Profit is also likely to be hurt by the company’s decision to set aside about $540 million for the possible payment of back royalties in a dispute with Brazil’s government.

Net income likely fell to $1.92 billion in the three months ending September 30 from $4.93 billion the year before, according to the average estimate of 19 analysts in a Reuters poll.

If results expected late on Wednesday confirm the estimate, it will mark the company’s worst quarterly profit in 33 months. Falling prices and weak demand in China, Vale’s largest market, have led the Rio de Janeiro-based company to delay spending, close operations and consider cuts to investments and dividends.

“Third quarter results are likely to suffer from a steep drop in prices,” BTG Pactual Group analysts Edmo Chagas, Antonio Heluany and Gregory Goldfinger wrote in a Monday report.

[Thompson, Manitoba] USW Local 6166 points to contracting out as a ‘contributing factor to our low productivity’ – by John Barker (Thompson Citizen – October 19, 2012)

October 20, 2012

The Thompson Citizen, which was established in June 1960, covers the City of Thompson and Nickel Belt Region of Northern Manitoba. The city has a population of about 13,500 residents while the regional population is more than 40,000. editor@thompsoncitizen.net

Vale’s Manitoba Operations is “one of the highest cost producers” in Canada and the United Kingdom, USW Local 6166 acknowledged Oct. 19, a day after the company said it was considering mothballing Birchtree Mine again next August. In a news release issued by the local, President Murray Nychyporuk pointed to contracting out as a “contributing factor to our low productivity” at Manitoba Operations.

While it’s not easy to say definitively how many contractors are working in Birchtree Mine because a number of contractors often work in multiple locations throughout Manitoba Operations and flow between worksites, Ryan Land, manager of corporate affairs for Vale’s Manitoba Operations, said late Friday afternoon there are about 40 contractors working at Birchtree Mine and a “little more than half are miners.”

Issues of cost and productivity are not new to the nickel miner. Productivity at Manitoba Operations from all mines for the number of pounds of nickel and copper produced in an eight-hour shift dropped from 320 pounds in 2001 and 315 pounds in 2000 to 198 pounds in October 2008, the company said on Nov. 28, 2008.

Time to stand ‘on our own feet,’ Vale CEO says – by Mark Gentili (Sudbury Northern Life – October 18, 2012)

October 19, 2012

http://www.northernlife.ca/

Prices, market prompt belt-tightening at company

Although it is confident base metal prices will rebound in the medium- to long term, Vale Canada’s CEO has issued a statement to its Base Metals employees worldwide that it is taking steps to keep the company profitable in the short term.

Peter Poppinga’s letter sets what Cory McPhee, the company’s vice-president of corporate affairs, describes as a “broad direction” for Vale’s base metals division. This direction focuses on ensuring the continued safety of workers, prioritizing value over volume and pursuing a directive Poppinga terms “standing on our own two feet.”

“Basically, we want all of our divisions to be self-sustaining,” McPhee explained to Northern Life Oct. 18. The letter issued this week precedes more discussions, both face-to-face and by letter, with the company’s base metal employees to keep them in the loop of Vale’s plans.

The first step was announced today when the company revealed it will be suspending operations at its Frood site of the Stobie Mine as of the end of the year. Although 85 jobs will be affected by the decision, no layoffs are in the works, said Angie Robson, manager of corporate affairs for Vale’s Ontario operations, in a statement today.

[Sudbury mine] Closure part of global trend: Analyst – by Harold Carmichael (Sudbury Star – October 19, 2012)

October 19, 2012

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

Nickel analyst Stefan Ioannu of Haywood Securities in Toronto is not surprised by Vale’s decision Thursday to close the 100- year-old Frood Mine in Sudbury.

” You have deposits and greater depths right now,” he said. “The deeper you go, the more expensive it is to get to stuff. Maybe ( Vale) can squeeze a little more out if it sells at $10 (a pound), a little less at $7.”

Ioannu said the Frood decision is one of many being made across the globe right now by the mining industry. “One of the big things we have been seeing coming out of the majors is a focus,” he said. “They will be shutting some of their big projects and focusing on regular operations to cut costs. It’s an interesting shift.

“It’s very difficult for the big companies to justify developing things with the (nickel) price now.” Ioannu said while he sees nickel prices rising to US$10 a pound, they could bottom out at $6. The reason they will rebound, said the mining analyst, is that high-grade nickel pig iron deposits in Indonesia — which could be turned on and off quickly and flood the nickel markets — are mostly gone and only low grade ones remain.

[Sudbury Vale] Operations suspended – by Harold Carmichael (Sudbury Star – October 19, 2012)

October 19, 2012

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

The first shoe has dropped at Vale’s Greater Sudbury operations as part of the company’s new “self-sustaining” push. Vale announced Thursday it is suspending operations at the Frood section of Stobie Mine by the end of the year. The 85 employees affected will be transferred to other operations.

“No employees will be laid off as a result of this decision,” said Vale spokeswoman Angie Robson. “While this move will affect approximately 85 employees, those employees working at Frood will be deployed to other areas of the operation, and all commitments under our collective agreements will be honoured.”

Robson said the move was a hard business decision that had to be made in difficult times. “Current market volatility, declining metal prices and falling demand for our products requires decisive action to ensure our business in Sudbury remains sustainable and robust throughout this challenging economic cycle,” she said. “Frood has a rich history and has been integral to our success for more than a century.

“However, after more than 100 years of operations, Frood is a remnant area that has low value ore and declining grades. In (times of ) lower metal prices, we are actually mining at a loss. At the same time, the area requires high capital investments in order to sustain production, so while the grades are going down, our mining costs there are increasing.

Vale wields Sword of Damocles over [Thompson, Manitoba] Birchtree Mine – by John Barker (Thompson Citizen – October 19, 2012)

October 19, 2012

‘Birchtree Mine is being considered for care and maintenance, effective August 2013’

Birchtree Mine, which opened in 1968, is being “considered for care and maintenance” in 10 months time next August, Vale said Oct. 18. The mine was previously on care and maintenance from 1977 to 1989.

“Unless we are able to affect another outcome, operations will be suspended at Birchtree Mine as of August 2013. This will mean that by the end of 2012 there will be no further development of the mine and it will be gradually ramped down until August when it will be placed on standby. The mine may re-open depending on future nickel prices, market dynamics and the viability of doing so. Previously, Birchtree Mine was on standby for nearly 12 years before re-opening in 1989 and the current life of mine plan anticipated closure at some point in the next 10 years.”

The bad news was delivered in a follow-up letter to Manitoba Operations employees in Thompson to an earlier one issued Sept. 7 by Lovro Paulic, general manager of smelting and refining, Don Wood, general manager of production services and Mark Scott, general manager of mining and milling. The three most senior managers in Manitoba Operations also issued the Oct. 18 letter jointly.

Vale reports production declines across wide band of commodities – by Dorothy Kosich (Mineweb.com – October 18, 2012)

October 22, 2012October 18, 2012

http://www.mineweb.com/mineweb/view/mineweb/en/page102055?

Bloomberg Industries says Vale’s share of the global seaborne iron-ore market has declined from 28% in the first half of 2011 to 26% for the same period of this year.

RENO (MINEWEB) – Vale has reported production declines in iron ore, pellets, manganese, copper, potash and phosphate rock for the first nine months of this year.

While the Brazilian mega-miner’s coal output increased a record 144.4% during the period, pellet output was up 3.8% and nickel production stayed flat.

For the first nine months of this year, Vale reported iron ore production of 234.5 million metric tons, a 2.2% drop over the 240 million metric tons of production reported during the first nine months of 2011.

“At Carajas we have not been able to match last year’s performance,” said Vale. “Issues with environmental permitting led to the continuation of mining in some older pits, which has entailed lower productivity, lower Fe content and higher costs.”
“Current performance is definitely not consistent with the high quality of our assets and corrective measures are underway,” the company said in its 3Q12 production report.

Sudbury must become ‘self-sustaining’ – Vale by Jonathan Migneault (Sudbury Star – October 18, 2012)

October 18, 2012

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

Vale’s Sudbury operations must become “self-sustaining,” according to a letter sent to the company’s global operations Wednesday by Peter Poppinga, CEO of Vale Canada Ltd.

What that will mean to the company’s Sudbury operations and its 4,000-plus employees will become clear by the end of the week.

“In every area that we operate, there will be conversations with employees about specific actions that can be taken at those sites,” said Cory McPhee, Vale’s vice-president of corporate affairs. “Sudbury is no different.”

McPhee said Vale needs to make changes to improve efficiencies and control costs, while facing a difficult base metals market hampered by weak prices and demand.

He said representatives from the company will be speaking with employees across its global operations, including in Sudbury, before the end of the week to go over exactly what they mean by becoming more “self-sustaining.”

Vale’s major challenges go beyond iron ore – by Jeb Blount (Mineweb.com – October 12, 2012)

October 12, 2012

www.mineweb.com

Costs are soaring, new mines are running behind schedule and growth in China, Vale’s largest market, is slowing.

RIO DE JANEIRO (REUTERS) – Roger Agnelli, who was forced out as chief executive of Brazil’s Vale in May 2011, may have been lucky to leave the world’s second-largest mining company when he did.

Since Murilo Ferreira replaced him as CEO, a series of setbacks have raised questions about Vale’s ability to increase sales and profit and maintain its place as the world’s top producer of iron ore, the main ingredient in steel.

Costs are soaring, new mines are behind schedule and growth in China, Vale’s largest market, is slowing. The price of iron ore, responsible for nearly three-quarters of the Rio de Janeiro-based company’s sales, recently sank to three-year lows.

Making matters worse, Brazilian laws and government interference threaten to hobble Vale, the country’s biggest exporter. Vale shipped $42 billion of raw materials in 2011, 16 percent of exports from the world’s sixth-largest economy.

“What the government is doing to Vale won’t kill the proverbial golden goose, but it could make the goose sick,” said Mauricio Canedo, an economist specializing in industrial policy and commodities at the Getulio Vargas Foundation (FGV), a Rio de Janeiro economic research institute. “Vale’s future looks less promising now than it has for some time.”