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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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NEWS RELEASE: Vale opens first new mine in Sudbury in over 40 years

(L to R) Cutting the ceremonial ribbon at the official opening ceremony of Totten Mine on February 21st, 2014 are: Conor Spollen, Vice-President, North Atlantic Projects, Vale; Rick Bertrand, President, United Steelworkers, Local 6500; Bob Booth, Totten Mine Manager, Vale; Hon. Marianne Matichuk, Mayor, City of Greater Sudbury; Kelly Strong, Vice-President, Ontario & UK Operations, Vale; Hon. Kathleen Wynne, Premier of the Province of Ontario, Hon. Michael Gravelle, Minister of Northern Development and Mines; Province of Ontario; Peter Poppinga, CEO of Vale Canada and Executive Director of Vale’s Global Base Metals; Chief Paul Eshkakogan; Rob Assabgui, General Manager, Mines & Mill, Vale.

http://www.vale.com/canada/EN/

Canada NewsWire – SUDBURY, ON, Feb. 21, 2014 /CNW/ – Vale celebrated the official opening of Totten Mine today in a ceremony with the Honourable Kathleen Wynne, Premier of Ontario, the Honourable Michael Gravelle, Minister of Northern Development & Mines, members of the Sagamok Anishnawbek First Nation and many other community leaders.

“Totten Mine is Vale’s first new mine in the Sudbury Basin in more than 40 years and represents a significant investment in the future of our operations in Ontario and across Canada,” said Peter Poppinga, President & Chief Executive Officer of Vale Canada and Vale’s Executive Director of Base Metals and Information Technology.

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Environment takes precedence at Sudbury Vale’s Totten mine – by Lindsay Kelly (Sudbury Mining Solutions Journal – November 25, 2013)

Sudbury Mining Solutions Journal  is a magazine that showcases the mining expertise of North Bay, Timmins and Sudbury. This article is from the December, 2013 issue.

Water, emissions priorities for mine design

More stringent environmental oversight of new mine development means more work. But instead of a challenge, it’s actually made the pro­cess easier at Totten Mine because it allows Vale to meet industry expectations and be creative in its approach, said senior environmental specialist Allison Merla.

“There’s the opportunity here to do it right, right away,” said Merla, who acted as the environmental co-ordinator for the mine, ensuring Vale’s permits and requirements met current industry standards.

“If you’re looking at a legacy site that has always done something a certain way for years, and they’re working on some of the older permits or legislative requirements, it takes a while to instill that change. Here, we’ve built it right and we’re going to do it right.”

Every aspect of Totten was designed with the envi­ronment in mind, starting with its overall footprint. The headframe and main operations have been laid out on top of previous mine workings, while the Victoria Creek pumphouse, from which Vale gets its domestic water, has been retrofitted and upgraded to meet today’s standards.

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Sudbury Vale’s Totten mine boasts copper, nickel and PGMs – by Lindsay Kelly (Sudbury Mining Solutions Journal – November 25, 2013)

Sudbury Mining Solutions Journal  is a magazine that showcases the mining expertise of North Bay, Timmins and Sudbury. This article is from the December, 2013 issue.

The mineralization at Vale’s Totten Mine is so rich, ribbons of copper, nickel and precious metal can be viewed at surface just by walking through the parking lot.

“It’s pretty interesting for anybody who likes geology,” said Lance Howland, Totten’s chief mine geologist. “They can go out for their lunch break to look at exactly what’s here, and that’s pretty much what you’d see underground.”

Totten Mine is situated along the Worthington Offset, one of the fractures resulting from the creation of the Sudbury Basin 1.8 billion years ago. Offset deposits like Worthington were formed when pressure caused by molten material cooling around the basin pushed its way into a fracture.

“(The molten material) carried with it the copper, nickel and precious metals, and formed multiple deposits along that string. One of them was Totten Mine,” Howland said. “It’s a pretty unique story and we’ve got some very interesting deposits that a lot of people around the world have come here to see given how unique it is.”

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Vale’s Team Totten rises to challenge – by Norm Tollinsky (Sudbury Mining Solutions Journal – November 25, 2013)

Norm Tollinsky is editor of Sudbury Mining Solutions Journal, a magazine that showcases the mining expertise of North Bay, Timmins and Sudbury. This article is from the December, 2013 issue.

Ground conditions, water ingress and a 60-year-old timbered shaft among the challenges overcome

When Bob Booth and Gary Annett of the Totten project team hand over the reins to mine manager Dave Pisaric on December 31st, life won’t be near as exciting.

Few mine development projects go exactly as planned. Mother Nature can frustrate the intentions of the most experienced and skilled engineers and geoscientists, as happened at Totten when unfavourable ground conditions and water ingress began bogging things down.

The team stepped it up a notch, hunkered down…and saw it through. Vale decided against the engineering, procurement and construction management (EPCM) approach and kept the project management in house.

Annett, with the ominous title of Totten execution manager, was assigned to Totten in February 2008. A 15-year Vale and Inco mining engineer and alumnus of Laurentian University, Annett worked his way up through operations and spent eight years at the company’s Coleman Mine.

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Vale officially reopens Totten Mine in Sudbury after 40 years (CBC Sudbury News – February 21, 2014)

http://www.cbc.ca/sudbury/

Dignitaries, including Premier Kathleen Wynne, are in Sudbury today for the opening of the Totten Mine. The project is mining giant Vale’s first new mining operation in the Sudbury area in 40 years.

The Totten Mine was originally closed in 1972, but Vale found advances in mining technology that would make it possible to re-open the site.

Sudbury mining researcher and writer Stan Sudol said this is a good sign for the industry in northeastern Ontario. “Totten is an excellent example of using technology in the globally competitive world of nickel mining,” he said.

“And it also shows that even though we’ve been mining for 130 years in the Sudbury Basin, there’s a lot to be found. We just have to find it, we have to go deeper.”

The mine’s opening has not been without difficulty. The project was originally scheduled to open in 2011, and has cost Vale over $760 million so far. The mine is expected to employ about 150 people.

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Totten Mine re-opens in Sudbury (Morning North Markus Schwabe’s Interview With Stan Sudol – February 21, 2014)

http://www.cbc.ca/morningnorth/ The Totten mine is the first new mining project from Vale in forty years. It was originally closed in 1972. Mining analyst Stan Sudol spoke to us about what this new development means for the Sudbury region. Listen audio (runs 6:38) Click here for the interview: http://www.cbc.ca/morningnorth/past-episodes/2014/02/21/totten-mine-re-opens-in-sudbury/  

UPDATE 2-Vale may sell Brazil potash project on tax dispute -CEO (Reuters U.S. – February 19, 2014)

http://www.reuters.com/

BRASILIA, Feb 19 (Reuters) – Vale SA may sell a $4 billion potash fertilizer project in Brazil’s northeastern state of Sergipe if it is unable to reach a tax accord with municipal authorities, Chief Executive Officer Murilo Ferreira said on Wednesday.

Shareholders “cannot be subject to fiscal uncertainties” about the project Ferreira said during a hearing before a Senate committee in Brasilia. Vale, the world’s No. 3 mining company by market value, is the world’s largest iron ore producer and a growing fertilizer producer.

Vale plans to shut down its planning work at the site on Feb. 28 if there is no resolution, Ferreira said. Sergipe Governor Jackson Barreto said at the same hearing that the state will find a solution to the tax problem. The impasse stems from a battle between rival Sergipe towns Capala and Japaratuba over the location of the mine’s planned processing facility on their territory so they can reap the expected tax benefits.

“We won’t do anything to hurt the state, but lacking a political solution we’ll hire a bank to sell the project to somebody interested in developing it,” Ferreira said.

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Brazilian government to help pay for potash mine – by Henry Lazenby (MiningWeekly.com – February 18, 2014)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Brazil-focused fertiliser development firm Verde Potash on Tuesday said the Brazilian government would help fund construction of its flagship Cerrado Verde project, located within the country’s largest agriculture market.

The company announced that the project was selected to receive financing from a special financing programme of the government.

“Inova Agro’s decision is immensely important not only for Brazil, but for the world’s population, ever so reliant on Brazil’s food production. Thanks to a ground-breaking funding programme in the agriculture sector, Brazil takes a step towards reducing its economy’s debilitating dependency on imported potash,” president and CEO Cristiano Veloso said.

Inova Agro is a Brazilian government programme intended to fund innovative projects in the agriculture sector, including those focused on fertilisers. Selected projects would be considered for subsidised interest rates, equity investment and non-reimbursable project investment grants from the Brazilian Development Bank and/or the Financing Agency for Studies and Projects, both of which are arms of the Brazilian government with a mandate to support domestic projects.

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Vale Indonesia Targeting $112m in Profit, May Reduce Land Concession by Up to 44% – by Tito Summa Siahaan (Jakarta Globe – February 12, 2014)

http://www.thejakartaglobe.com/

Jakarta. Vale Indonesia, the country’s largest nickel producer, has set its net income target at $112 million this year, according to a document presented during a hearing with members of the House of Representatives Commission VII overseeing mineral affairs.

The local outfit of Brazil’s Vale targets production of 79,691 metric tons of nickel matte this year, a slight increase from last year’s target of 79,500 tons, which is set to be missed due to operational disruption in the fourth quarter, the document showed.

“We expect to book sales of $1 billion, assuming that the price at the London Metal Exchange averaged $16,000,” Vale Indonesia president director Nico Kanter said at the parliament building.

The company may have missed its target of $213.6 million in net income last year due to a sharp decline in nickel prices, according to Nico.

The average nickel price for last year was $15,000, down from an average of $17,374 in 2012. He said the price of nickel is projected to recover this year thanks to the government’s decision to ban exports of unprocessed nickel ore, but trends for the first few months still showed price fluctuations.

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