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Vale confirms CEO Agnelli’s exit – by Brenda Bouw (Globe and Mail-April 2, 2011)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media. Brenda Bouw is the paper’s mining reporter.

The ouster of Roger Agnelli as chief executive officer of Brazilian mining giant Vale SA signals a tightening government grip on the country’s resource sector and heightens concerns over rising political risk in Latin America’s largest economy.

Rio de Janeiro-based Vale confirmed a search is under way to replace Mr. Agnelli, who has held the top job at the world’s largest iron ore producer for the past decade.

Vale said its controlling shareholder Valepar, majority held by the Brazilian government, hired a headhunting firm to find a replacement for Mr. Agnelli, 51, when his mandate ends in May. Valepar will hold shareholder meetings next week to nominate a new CEO from a list of three candidates, Vale said.

Toronto-based metals executive director Tito Botelho Martins, 47, is seen as the leading candidate to replace Mr. Agnelli.

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Life in Kirkland Lake during World War II – by Michael Barnes

The following is an excerpt from Michael Barnes’ new book: Gold in Kirkland Lake, published by General Store Publishing House, and available for $29.95. Contact the author at www.barnes4books.com.

After the war in Europe commenced, the bright spot in Ontario’s Kirkland Lake gold camp area was the Kerr Addison mine in Virginiatown, which by 1941 was able to ramp up milling to 1,200 tons per day.

Over at Larder Lake, the Omega mine payroll had not raised much over the past few years, with muckers and labourers earning $4.64 a day and track and lamp men $5.20, while the main official in charge underground, the mine captain, took top dollar at $8.70.

On the surface, Kirkland Lake was busy and in good economic health. The town’s population had now dropped to 21,500 and seen 1,600 men go to serve their country in the armed forces, and some miners had left to work in war-related industries.

In the patriotic fervour that gained strength after the declaration of war, there was a move by some southern-based citizens to change the name of Swastika to what they thought would be a more politically acceptable “Winston,” honouring the wartime British leader.

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OMA Meet the Miners event helps Queen’s Park focus on mineral industry 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.

 

A solid contingent of industry leaders, cabinet ministers, MPPs and public servants celebrated the role of the mineral sector at the Ontario Mining Association’s Meet the Miners event.  The event was rescheduled to March 28 at the Sutton Place Hotel after adjusting arrangements to make way for the provincial budget at the Legislature, which was delivered on March 29.

“Thank you for being here to help us celebrate the contributions Ontario’s mining industry makes to the society and economy of the province,” said Marc Boissonneault, Vice President Sudbury Operations for Xstrata Nickel and OMA Chairman.  “Mining remains a key sector to help us move to a greener and more productive society.”

Michael Gravelle Minister of Northern Development Mines and Forestry saluted the OMA for its role for more than 90 years in making a positive difference in the province.  “Ontario is a better place for the vision and innovation of the mining industry. The mining industry in Ontario not only has made it through challenging times recently but it has come out stronger than ever.”

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Where does mining fit into the Ontario provincial Budget?

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.

 

Political analysts will undoubtedly remind us that details of the Liberal government’s provincial Budget delivered on March 29 will be repeated many times over leading up to the Ontario election on October 6.  The Budget contains specifics about protecting health care and education, jobs and growth and promises to make the delivery of public services more efficient.

But where does mining fit into the government’s plans?  It might not be obvious from a cursory reading of Budget documents.  There are no references to mining in either Ontario Finance Minister Dwight Duncan’s Budget speech itself, titled “Turning the corner to a better tomorrow,” or the press release and its supporting background papers.  However, if you delve into the 300-page book on “Budget Papers,” you will be able to piece together some clues.

In the chapter “Key Ontario Sectors,” two pages are dedicated to Mining and Opportunities in Ontario’s Ring of Fire.  “Mining, a traditionally strong part of the Ontario economy, is benefiting from growing world demand for commodities and from tax relief provided through Ontario’s tax plan for jobs and growth,” said the document.  “The government is supporting the development of new mineral deposits in the North and Far North, including helping promising mining opportunities in the Ring of Fire area of the Far North with potentially large deposits of minerals such as chromite, nickel, copper and platinum.”

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Vale’s man in Canada [Tito Martins] touted as new chief in Brazil – Andy Hoffman (Globe and Mail-March 31, 2011)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media. Andy Hoffman is the paper’s Asia-Pacific Reporter.

Tito Botelho Martins has endured a string of long and difficult winters in Canada. Now he’s in line for a triumphant return to sunny Rio de Janeiro.

The Toronto-based executive is being touted as the leading candidate to replace Roger Agnelli as the chief executive officer of Brazil’s Vale SA (VALE-N32.92-0.05-0.15%), the world’s top iron ore producer and one of the biggest mining companies on the planet.

Mr. Agnelli, the flashy former investment banker who has steered an aggressive decade-long expansion of Vale’s international operations, has fallen out of favour with Brazil’s government over corporate strategy. Unhappy with Mr. Agnelli’s perceived failure to invest enough in Brazilian mining and steel projects, Brazil’s President Dilma Rousseff is understood to be using the government’s leverage as a key shareholder of Vale (through state pension funds), to force Mr. Agnelli to step aside.

Newspaper Folha de S.Paulo reported that Mr. Martins, who was parachuted in to run Vale’s nickel and copper mining business from Toronto in early 2009, will be named Vale’s new CEO.

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Vale shuffle rumoured [Tito Martin likely new CEO]- by Carol Mulligan (Sudbury Star-March 31, 2011)

Carol Mulligan is a reporter for the Sudbury Star, the City of Greater Sudbury’s daily newspaper. cmulligan@thesudburystar.com

Speculation is rampant this week that Tito Botelho Martins is the man most likely to become the next chief executive officer of Vale. Martins, currently executive director for Base Metals for Vale and CEO for Vale Canada, works out of Toronto for the Brazil-based Vale.

A Brazilian n ews p a p e r was quoting two sources Wednesday who said Martins, 47, has a good chance of being named to the top job that has been held for years by Roger Agnelli. Cory McPhee, Vale Canada’s vice-president of corporate affairs, would only offer a no-comment Wednesday about the rumour.

“We are not commenting on the speculation around executive moves,” McPhee said in an e-mail to The Sudbury Star. Two high-ranking officials with United Steelworkers in Canada have been following the news about Martins with interest.

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Report pegs Vale director [Tito] Martins to be new CEO (Globe and Mail – March 30, 2011)

“Tito Martins is a Vale man, heart and soul; he understands the company.” (Marcio Macedo, a partner with Humaita Investimentos – Sao Paulo)

SAO PAULO – Reuters

Vale SA director Tito Botelho Martins will be named the company’s new chief executive officer, a local newspaper reported Wednesday, the latest chapter in an ongoing tussle over the leadership of the world’s largest producer of iron ore.

Newspaper Folha de S.Paulo reported that Brazilian bank Bradesco, a key Vale shareholder, backed Mr. Martins to replace current CEO Roger Agnelli. Folha, which did not say where it obtained the information, said Bradesco would announce its decision by Friday.

Mr. Martins’ designation would likely hearten investors following concerns the government would tap an inexperienced politician who would slow the company’s profit growth.

“Tito Martins is a Vale man, heart and soul; he understands the company,” said Marcio Macedo, a partner with Humaita Investimentos in Sao Paulo, which manages close to $37-million (U.S.) in assets and owns Vale shares. “Right now, Vale shares are very, very cheap. If he is confirmed, I think we could see some relief for the shares.”

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[Roger Agnelli, Vale] Brazil’s Behemoth – by Ken Stier (Time Magazine-February 21, 2008)

Few companies offer a more stunning testimonial to the benefits of privatization–and fortuitous timing–than the formerly state-owned Brazilian mining firm Companhia Vale do Rio Doce. In the 55 years following its founding in 1942, Vale, as it is now known, grew into a comfortably large domestic player. Since being unshackled from Brazil’s state bureaucracy in 1997, Vale has soared into the ranks of global-commodities powerhouses, with net income rising from $680 million in 2002 to $9.2 billion in the first nine months of 2007, placing it as one of the top-three diversified mining and metals firms in the world. The industry has become blast-furnace hot: witness BHP Billiton’s hostile $147.4 billion bid for iron-ore-rich Rio Tinto Group.

Already the world’s largest producer of iron ore and one of the largest producers of nickel, Vale is also a growing force in copper, manganese, bauxite, precious metals, aluminum, coal, steel and energy. Its stock price has more than doubled in the past year, to nearly $33, and the company’s market value is about $160 billion, 16 times what it was in 1997. Douglas B. Silver, an industry veteran and CEO of Colorado-based International Royalty Corp., calls Vale “the most effective giant mining company in the world,” not just for its size but also for its skill at operating in difficult emerging markets. Along the way, Vale has built what could be a model for other formerly state-run enterprises hoping to make a mark on the world stage.

Roger Agnelli, a 48-year-old investment banker, became CEO in 2001. He inherited a company whose historic strength lay deep in the Amazon, in the massive iron-ore deposits of Carajas. Iron ore then accounted for 75% of Vale’s revenues, and Agnelli’s first move was to consolidate domestically, by selling off peripheral holdings in paper and forestry (Agnelli’s family business) and using the proceeds to swallow eight rival firms.

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Vale/Roger Agnelli upheaval: One more thing for nickel miners to worry about – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

Rumours are swirling this week that Vale SA CEO Roger Agnelli is being forced out of his job. Evidently the Brazilian government seeks greater control over the company saying Agnelli has not aligned the company with “national interests” despite record profits.

Ordinarily, putting a government agenda ahead of good corporate management would herald a sharp downturn in a company’s share value. Anything that hints of government interference – be it nationalization, government resource ownership or excessive taxes and royalties – usually scares off investors very quickly. Vale will be lucky to avoid this sort of disaster.

Vale’s public image in Canada has been deeply tarnished by a pair of strikes – one lasting a year in Sudbury and the other lasting 14 months in Labrador. Despite promising to spend $10 billion over five at its Canadian operations, the company is still viewed with distrust by many people.

Adding greater Brazilian government influence over the company will do nothing to endear Vale to residents of Sudbury or anywhere else in Canada.

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The Paradigm Shifts: Global Imbalances, Policy, and Latin America – Mark Carney – Governor of the Bank of Canada Calgary [Commodities] Speech (March 26, 2011)

Remarks by Mark Carney – Governor of the Bank of Canada – Inter-American Development Bank, Calgary, Alberta (26 March 2011)

CHECK AGAINST DELIVERY

“Commodity markets are in the midst of a supercycle. …This surge in demand is the result of rapid growth in the emerging world, particularly in Asia. …Rapid urbanization underpins this growth. Since 1990, the number of people living in cities in China and India has risen by nearly 500 million, the equivalent of housing the entire population of Canada 15 times over. …Even though history teaches that all booms are finite, this one could go on for some time.” (Governor of the Bank of Canada – Mark Carney, March 26, 2011)

Introduction

Globalization is the opportunity and the challenge of our age. It has the potential to lift billions out of poverty, vastly expand economic prospects, and develop a more diverse and resilient global economy. However, globalization also brings stresses, so policy-makers will need both discipline and new frameworks to realise its promise.

The financial crisis has accelerated the shift in the world’s economic centre of gravity. Emerging-market economies (EMEs) now account for almost three-quarters of global growth—up from just one-third at the turn of the millennium.

Although this paradigm shift to a multipolar world is fundamentally positive, it is also disruptive. Labour, capital and commodity markets are changing rapidly. The effective global labour supply quadrupled between 1980 and 2005 and may double again by 2050.1 Cross-border capital flows have exploded, growing at a rate almost seven times the peak during the last wave of globalization.2 Commodity markets are in the midst of a supercycle.

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Remarks at 2011 “Meet the Miners Reception” – by the Honourable Michael Gravelle Minister of Northern Development, Mines and Forestry (March 28, 2011)

Meet the Miners is an Ontario Mining Association (OMA) initiative at Queen’s Park involving member companies and their employees, which helps shine the spotlight on the industry in government circles.

Check Against Delivery

Meet the Miners is an OMA initiative at Queen’s Park involving member companies and their employees, which helps shine the spotlight on the industry in government circles.Thank you, Chris, for that kind introduction. Welcome, everyone. It is my pleasure to co-host the annual “Meet the Miners” reception once again. First of all, I want to thank you for being flexible and having “Meet the Miners” day today.

Although the provincial budget presentation scheduled for tomorrow necessitated a change in plans and venues for the OMA, I hope that your meetings today were both productive and enjoyable. I am certainly delighted to join you and my legislative colleagues here this evening.

One has to look no further then to the numbers to understand that Mining is  and will remain a major contributor to Ontario’s economy:

  • In 2010, our mineral production was valued at $7.7 billion. And during the same year, mining companies reinvested more than a billion dollars into ongoing operations and new mine development.
  • In 2010, Mining and exploration companies spent over $800 million on exploring and evaluating mineral deposits throughout the province. And this year, we are going for another record – $940 million!
  • As well, close to 30 per cent of all investment in mineral exploration in Canada is taking place in Ontario. With over 300 companies actively exploring more than 600 projects.

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Ramblings of alarmist activists fall on deaf ears here in North [Ontario] – by Ron Grech (Timmins-The Daily Press-March 25, 2011)

Ron Grech is a reporter for The Daily Press, the city of Timmins newspaper. Contact the writer at  
rgrech@thedailypress.ca

What we see again is an alarmist message from special interest groups aimed at
justifying extreme measures that will impact the lives and livelihood of people in
Northern Ontario. Northerners have a natural inclination to bond and care for the
health of their surroundings. Why else would they choose to live here and raise their
families here? (Ron Grech – March 25, 2011)

With the Darlington public hearings beginning last week, activists were provided an opportunity to push their agenda thanks to an earthquake and tsunami setting off a nuclear crisis in Japan.

Proponents for refurbishing of the nuclear facility pointed out the two circumstances are very different. The fact is half of Ontario’s power comes from nuclear plants and they have operated for more than 30 years without incident. The province does not sit on a fault line, so facilities here do not encounter immense earthquakes and tsunamis the way they do in Japan.

But that type of reasoning washes over the public when people are captivated by a disaster and uneasy about bringing it close to home.

Northerners can’t help but watch this discussion in southern Ontario without being mindful of how they have been affected by knee-jerk alarmism and governments swayed by public pressure and half-truths.

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[Roger Agnelli] Brazil pressures Vale to invest inward – by Peter Koven (National Post-March 29, 2011)

The National Post is Canada’s second largest national paper. This article was originally published in the Financial Post on March 29, 2011. pkoven@nationalpost.com

TORONTO — In Brazil, politics appear to be trumping profits. President Dilma Rousseff’s government is working hard to force the chief executive of mining giant Vale SA out of his job. Despite Vale’s tremendous success in recent years, the government wants the company to change its investment focus in order to boost Brazil’s economy.

As CEO, Roger Agnelli played a key role in transforming Vale into a global powerhouse from its humble roots as a state-owned company, making it a huge winner for investors in the process. The company earned a net profit of US$17.3-billion last year, and sports a market value of almost US$170-billion.

A change at the top could have huge implications in the global mining industry. If Vale is forced to look inward in Brazil, it leaves a question mark over its international assets, including all the Canadian ones it acquired when it bought Inco Ltd. for about $19-billion.

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[Roger Agnelli] Brazil and Vale, At a Crossroads – by Stuart Burns (Metal Miner-March 29, 2011)

MetalMiner blog provides unique insight, analysis, and tools for buyers, purchasing professionals, and everyone else for whom metals and their related markets matter.

Stuart Burns

We have written on several aspects of business and the metals markets in Brazil recently; the latest just last week about Gerdau Steel raising billions in a share sale with the probable intent of bidding for one or more of its major domestic competitors. Generally that is taken as a positive sign; although to invest in new facilities for organic growth rather than acquisition would be better, at least buying competitors is a vote of confidence in the economy’s future.

So what should we make of the spat developing between the government of new president Dilma Rousseff and Vale, reported in an FT blog article? Apparently, Vale’s high-profile chief executive Roger Agnelli’s contract is coming up for renewal in May and the government is making every effort to prevent his re-appointment. Although Vale was privatized in 1997, the firm is Brazil’s largest exporter and along with Petrobras, the national oil company, a major source of foreign exchange and tax revenue. Vale tripled profits last year to $17 billion on the back of some $47 billion in revenues according to an FT article this week.

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Sustainability In Nickel Projects: 50 Years of Experience at Vale Inco – by S.W. Marcuson, J. Hooper, R.C. Osborne, K. Chow and J. Burchell (December 1, 2009)

The principal author, Dr. Sam Marcuson ( Sam.Marcuson@valeinco.com ) is vice-president, business improvement for Vale Inco Limited, Mississauga, ON, Canada. This article was adapted from a plenary speech made at the CIM Conference of Metallurgists held August 2009 in Sudbury, Ontario. The full paper is available from the author or the conference proceedings.

Looking at the industry’s past and present with a view to projecting into the future can be a valuable exercise for executing and maintaining sustainable development

The first eight years of this century saw rapid growth in the consumption and production of nickel and related commodities. In response to growth in the BRIC countries, but especially China, new projects, many in under-developed countries, were initiated. Nickel pig iron, produced in aging Chinese blast furnaces, unexpectedly emerged. Simultaneously, scientists concluded that global warming is “unequivocal” and human activity is the main driver, “very likely” (>90%) causing most of the rise in temperatures since 1950[1]. These factors point to a future in which sustainable development becomes of paramount interest to the mining and metallurgy industry.

To the practicing metallurgist and operator, “sustainability” may appear as keeping employees safe, meeting prevailing environmental regulations and contributing to social programs contractually agreed to, while maintaining a low-cost operation that meets production and financial targets. But this is a highly simplified view that ignores many of the sustainability concepts.

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