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Are You a Base Metal Growth Bull or a Gold Gloom-and-Doomer? – by Brian Sylvester (The Gold Report – January 2, 2013)

http://www.theaureport.com/

Gold bugs say the global economy could collapse any day now. But what about investors who see continued growth in emerging economies and a steady, if slow, U.S. recovery? Look to base metals, recommends Haywood Analyst Stefan Ioannou. He expects price runs for 2013–2015, especially for zinc, which is facing a serious supply squeeze. Do your homework now to get positioned as soon as the uptick begins. Ioannou shares his favorites in this Gold Report interview.

The Gold Report: Stefan, what is your 2013 outlook for copper?

Stefan Ioannou: Strong fundamentals underpin the copper price going into 2013. Despite a tough copper equity market in 2012, the metal price itself has been pretty solid, averaging around $3.60 per pound ($3.60/lb). Improving automobile numbers out of the U.S. and stronger manufacturing numbers out of China will both have a positive near-term impact on the copper price. We expect copper prices to move a bit higher in 2013.

TGR: How far off is a return to $4/lb copper?

SI: I think 2013 is too soon for a sustained $4/lb price, but it will likely test that mark a few times in the coming year. There is a stronger argument for a long-term $4/lb copper price.

TGR: Many of the copper companies you cover also have a zinc component. Zinc started 2012 near $2,200 per metric ton ($2,200/mt), dipped to $1,750/mt at midyear and now hovers around $2,000/mt. What is behind the volatility?

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[New Caledonia] Koniambo nickel commissioning support – control infrastructure – by International Mining (December 27, 2012)

http://www.im-mining.com/

Xstrata Nickel’s Koniambo project in New Caledonia is commissioning as it prepares for first ore by the end of 2012. The project design relies heavily on the use of Profibus DP, a digital communications bus, to link field instrumentation and electrical motor controls to the ABB Distributed Control System that is used for control and monitoring of the facilities. Ian Pearce, Chief Executive of Xstrata Nickel, said in November: “We are very excited about the progress being made at Koniambo, including the successful delivery of Line 1.

It is a testament to our dedicated project and operation teams at Koniambo Nickel that we can now focus on moving to first production. “With the completion of Line 1, the majority of our construction resources will now be devoted to the second production line, which is forecast to be complete in the second quarter of 2013. Koniambo Nickel will ramp up to a steady state annual production run rate of 60,000 t of nickel in ferronickel within two years, by the end of 2014.

“Koniambo Nickel’s mine is already operating with the geological integrity of our resource forecasts intact. The ore-preparation plant and overland conveyer are in operation and the team is working to ensure we have 30,000 t of on-spec ore ready for the metallurgical plant by the end of the year.”

Gary O’Connell, Project Technical Director, along with Thierry Bonnet de Larbogne, KNS Process Control Manager, requested XPS Process Control group to assist in troubleshooting of the Profibus installations when problems were experienced during pre-operations testing. The Process Control group has two certified Profibus professionals (Alan Hyde & Phil Nelson) within the group.

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Canadian Royalties aims to start shipments from Nunavik Nickel in 2013 – by Jane George (Nunatsiaq News – November 28, 2012)

http://www.nunatsiaqonline.ca/

More than 650 people already working on site

A Chinese-owned mine in Nunavik will soon see huge ice-class vessels sailing through Hudson Strait to bring nickel, copper, platinum and palladium to European markets.

After sinking $735 million into infrastructure, Jien Canada Mining Ltd., the owner of Nunavik’s second soon-to-be operating mine, plans to ramp up production in early 2013 and hire more Nunavik workers.

The mine company, which expects to reach full production by 2014, will produce nickel, copper, palladium and platinum for at least 13 years. Located 20 miles from Xstrata Nickel’s Raglan nickel mine, the Nunavik Nickel mine sits in “one of the most inhospitable places in the world,” said its president, John Caldbick in a recent interview.

But the cold, rocky plateau is rich in minerals, and early in 2013 the mine will start processing ore. More than 650 people are now on site, living in its 428-person main camp and other temporary camps. Some workers are excavating ore from the Expo open pit mine, while others complete essential parts of the mine’s infrastructure.

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Xstrata plea for ONTC – by Ron Grech (Timmins Daily Press – November 27, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Xstrata Copper is seeking the city’s support in ensuring freight rail service to the mine is maintained in light of the province’s plan to sell the Ontario Northland Transportation Commission.

In a presentation to Timmins council Monday, Tom Semadeni, general manager of Kidd Operations, identified the divestiture of the ONTC and its potential impact on freight rail service as a possible challenge in the future. Semadeni said city council could “help us in term of lobby efforts … to make sure they maintain service.”

He said trucking the material would be more costly to the company and more damaging to the roads. Coun. Gary Scripnick said hearing these concerns directly from mine management should be helpful in any future discussions Mayor Tom Laughren has with provincial ministers.

He said it is important for the mayor to be able to report what mining officials are telling him. Other areas of concern expressed by Semadeni included high energy costs and the limited availability of housing in Timmins.

He said Xstrata Copper has hired close to 550 in the last five years and as a result has experienced the challenges associated with the housing shortage first-hand.

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NEWS RELEASE: Koniambo Nickel completes construction of first production line and readies for first molten metal by year end Koné, 23 November 2012

Xstrata Nickel, the industrial partner in the Koniambo Nickel Project, is pleased to announce that the construction of the first production line of the smelter (Line 1) is complete. The necessary support services and operational infrastructure are undergoing pre-operational testing and commissioning. First molten metal is expected before year end and we anticipate the first metal being tapped from Line 1 in January 2013.

Ian Pearce, Chief Executive of Xstrata Nickel, said: “We are very excited about the progress being made at Koniambo, including the successful delivery of Line 1. It is a testament to our dedicated project and operation teams at Koniambo Nickel that we can now focus on moving to first production.

“Our journey to this point has been a long and complex one, but Koniambo Nickel is finally close to becoming a reality and bringing mutual benefit to all the stakeholders who have a keen interest in its success. I am proud of the role Xstrata has played in making Koniambo Nickel a reality – including continuing construction throughout the global financial crisis – and the support we have received from our many partners in New Caledonia and France.”

With the completion of Line 1, the majority of our construction resources will now be devoted to the second production line, which is forecast to be complete in the second quarter of 2013.

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Group worried about metals in Sudbury soil – by Carol Mulligan (Sudbury Star – November 23, 2012)

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

A committee concerned about the health of Sudburians is calling on the government of Ontario to fill what it says is a gap in a study that looked at metals of concern in Sudbury’s air, water and soil.

Recommendations from the Sudbury Community Committee for Human and Environmental Health are the next logical step to the Sudbury Soils Study, says the committee and an environmental expert it commissioned to review the study.

The Sudbury Soils Study was a $15-million, eight-year study of the effects of a century of mining on the soil, air and water of the Sudbury Basin. The committee says the study didn’t consider an important factor relating to Sudburians’ health — the quality of the air inside their homes.

Scientific data collected for the study, conducted by the Sudbury Area Risk Assessment group, included indoor dust testing at 91 homes in five communities in Sudbury. That sampling showed, in many of those homes, levels of metals such as nickel and lead three to six times higher than concentrations those metals in soils in the areas.

The dust samples were collected in Falconbridge, Copper Cliff, Hanmer, Coniston and Sudbury Centre, some of which were dubbed hot spots because of smelting activities over the years.

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[Sudbury] Local likes [Glencore-Xstrata] mine deal – by Carol Mulligan (Sudbury Star – November 21, 2012)

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

The takeover of mining giant Xstrata Nickel by trader Glencore could be a good thing for Sudbury, says the president of the union representing 855 production and maintenance workers at Xstrata’s Sudbury operations.

The $31-billion takeover approved by Xstrata shareholders Tuesday could result in more investment in exploration and mine development, said Richard Paquin, president of Mine Mill Local 598/CAW.

The deal isn’t final, said Paquin, as it requires regulatory approval by several countries, including the European Union. But it is one step closer to a merger almost one year in the making.

Xstrata shareholders were expected to approve the takeover offer Tuesday and they did, but they surprised observers by failing to endorse a plan that would pay top Xstrata executives big money to remain with the merged company.

Those key executives won’t get that protection with this approval, said Paquin, adding that is not his and his union’s issue. Nor are Paquin and his union worried about being taken over by another foreign company.

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Glenstrata deal costs chairman Bond his job – by Clara Ferreira-Marques and Emma Farge (Reuters Canada – November 20, 2012)

http://ca.reuters.com/

LONDON/ZUG, Switzerland (Reuters) – Shareholders in Xstrata (XTA.L: Quote) prompted the resignation of the miner’s chairman on Tuesday as they voted through a $31 billion takeover by trader Glencore (GLEN.L: Quote) but twice snubbed a controversial pay plan to retain key managers.

Xstrata Chairman John Bond, formerly chairman of HSBC (HSBA.L: Quote) and Vodafone (VOD.L: Quote), would have been chairman of the new Glencore Xstrata.

Bond had been under fire for months over a 140 million pound ($223 million) “golden handcuffs” package for managers the Xstrata board said were key to operations, and over what some investors felt was an insufficient fight for better terms from Glencore, Xstrata’s top shareholder.

It took an unprecedented, activist stance from the Gulf state of Qatar, an unexpected kingmaker and second-largest shareholder in Xstrata, to force Glencore to improve the offer – just hours before a September shareholder vote, later cancelled.

At the shareholder meeting in the lakeside Swiss town of Zug activist investor Knight Vinke, also a top 25 Xstrata shareholder, accused the board of “governance failings” and said it had no confidence in its independence and robustness.

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Tension for Xstrata board as Glencore deal nears finish line – by Clara Ferreira-Marques (Reuters – November 18, 2012)

http://www.reuters.com/

(Reuters) – Commodities trader Glencore (GLEN.L) is set to all but clinch its $30 billion takeover of Xstrata this week, despite a potential snub for the miner’s board if, as expected, investors scrap a controversial pay plan for its managers.

Shareholders in both Glencore and Xstrata (XTA.L), the world’s fourth-largest diversified miner, will vote in Switzerland on Tuesday.

European competition regulators will decide by Thursday whether to give the green light to one of the sector’s biggest ever acquisitions, or begin a longer probe.

After nine months of unexpected twists and wrangling between Xstrata and its top shareholders – not to mention years of on-off talks between the miner and trader – the deal is moving towards the finish line, a victory for Glencore’s boss, top shareholder and the deal’s chief cheerleader, Ivan Glasenberg.

The deal’s prospects were boosted last week thanks to support offered by Xstrata’s second-largest investor, Qatar, overcoming initial reticence over the terms of the deal. Glencore, Xstrata’s top shareholder, has separately offered up antitrust concessions, in the hope of securing an EU nod.

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Qatar backing puts Glencore’s takeover of Xstrata on track – by Sarah Young (Mineweb.com – November 15, 2012)

http://www.mineweb.com/

Qatar said on Thursday that it will vote in favour of two key resolutions on the takeover aimed at creating a mining and trading powerhouse.

LONDON (REUTERS) – Commodity trader Glencore’s $32 billion takeover of miner Xstrata looked set to go ahead after Qatar Holdings – the bid target’s second-largest shareholder – backed the deal.

Qatar, an unexpected kingmaker in Glencore’s bid for Xstrata, said on Thursday that it would vote in favour of two key resolutions on the takeover aimed at creating a mining and trading powerhouse.

In a snub to Xstrata management, Qatar said that it will abstain from voting on a multimillion-pound management retention plan, which increases the chances of that aspect of the deal being voted down. “In a nutshell, this means the deal is all but done,” Liberum analysts said.

Qatar’s support for the deal, first announced in February, comes after its surprise opposition to terms in June and brings Glencore within weeks of sealing its long-running pursuit of the Swiss mining company.

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Correction: Given platinum’s problems, can Xstrata really justify a Lonmin takeover? – by Lawrence Williams (Mineweb.com – November 12, 2012)

http://www.mineweb.com/

Speculation that Xstrata will make another attempt to oust the Lonmin Board and take the company over remains rife in London, despite Lonmin’s rebuff of the Xstrata overtures. (Correction on Lonmin rights issue status)

LONDON (MINEWEB) – Despite an official rebuff by the Lonmin Board, Xstrata looks as though it may well be about to make a serious play to take over Lonmin and its South African platinum mines – although the timing could be better for the diversified miner with the Glencore merger vote coming up in just over a week’s time – just a day after Lonmin’s own proposed fundraising plan is due to be voted on.

Xstrata is a logical saviour for Lonmin, although the latter doesn’t seem to think so. It owns 24.6% of Lonmin already, has platinum, chrome and ferrochrome operations in the Bushveld Complex area – where 90% of the world’s platinum reserves are thought to lie and which accounts for 70% of annual global production – but is not a major platinum miner and could view picking up the remainder of Lonmin at a relatively cheap price as an attractive long term play.

It is sitting on a huge loss on its existing holding, but nevertheless probably sees Lonmin’s platinum reserves, resources and operations as a great long term asset, particularly at Lonmin’s current hugely depressed share price. But, perhaps importantly if it doesn’t take up its rights, a large proportion of the the Lonmin fundraising could remain with the underwriters – even though the rights issue price has been set at a substantial discount to make it more attractive to existing shareholders.

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

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Glencore offers to end Nyrstar deal to land Xstrata – by Foo Yun Chee (Mineweb.com – November 1, 2012)

http://www.mineweb.com/

A source close to the deal says Glencore is prepared to end an exclusive zinc sales deal and sell its minority stake in Nyrstar to win EU approval for its $33 billion takeover of Xstrata.

BRUSSELS (REUTERS) – Commodities trader Glencore has offered to end an exclusive zinc sales deal and sell its minority stake in world No. 1 producer Nyrstar to win EU approval for its $33 billion takeover of Xstrata, a source said on Wednesday.

The European Commission – which is examining the merger, one of the largest in the sector to date – is concerned the deal will hand the group an excessive slice of the northern European zinc market, the person familiar with the matter said.

Analysts estimate a combined Glencore-Xstrata, which would be the world’s largest zinc miner, would have 50 percent of the European zinc metal market. Ending Glencore’s agreement with Nyrstar would free up 350,000 tonnes, the person said.

The person said Glencore, the single largest shareholder in Nyrstar, was also willing to sell its stake of just under 8 percent in the company. The EU competition authorities will decide whether the offer is sufficient to allay regulatory worries or more is required.

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Xstrata seeks New Brunswick miners – by Liz Cowan (Northern Ontario Business – October 2012)

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.

Xstrata Copper and the Timmins Economic Development Corporation (TEDC) joined forces recently to recruit some potential employees. The Brunswick Mine in Bathurst, N.B., a division of Xstrata Zinc, is winding down operations since its mine life ends in 2013.

The Timmins operation, which includes the Kidd Mine and the metallurgical site, made a pitch to try and recruit some employees to Timmins.

“We gave a presentation on our operations and then the (TEDC) gave a presentation on the city itself,” said Brian Fleury, Xstrata senior human resources advisor in Timmins. “We had about 40 positions to fill at the time and we are always looking for those with mining experience. These would be very familiar with Xstrata’s way of doing things so they could fit in very well and hit the ground running.”

Cheryl St. Amour, director of business development and retention for the TEDC, offered the prospective employees an overview of what their life would be like in Timmins. “It wasn’t just the mine talking about their mine and their perspective of the community,” she said. “I talked about what the community offers.”

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Mining inquiry gains momentum – by Heidi Ulrichsen (Sudbury Northern Life – October 2, 2012)

This article came from Northern Life, Sudbury’s biweekly newspaper.

150 pack Steelworkers Hall for forum

Wendy Fram said she was overwhelmed by the turnout at a forum examining the need for a mining inquiry at the Steelworkers Hall Oct. 1. About 150 people, many of them friends of her late son, Jordan Fram, packed the hall, and stood at the back when the chairs ran out. Jordan, along with his co-worker Jason Chenier, died in a mining accident at Vale’s Stobie Mine last year.

“I find that there’s already support to help us deal with this inquiry,” Wendy said. “Hopefully this is going to work for us. I’m going to try to stay as positive as I can and work hard and get this going.”

During the event, Wendy was elected chair of a new group called Mining Inquiry Needs Everyone’s Support (MINES), which will push for a mining inquiry. Her daughter, Briana Fram, was elected the group’s secretary. Miner Jodi Blasutti along with Cheryl Dufoe, whose son, Lyle Dufoe, died in a mining accident in Timmins in 2007, will act as co-vice-chairs.

Those at the event were invited to sign up as members of the group. “It’s my first time ever being a chair of a committee,” Fram said. “I’ll do my best. I have my daughter for support, which is a great support. My husband works at Vale, so he has a lot of great input as well.”

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