As we await further developments on BCL and therefore BML, an interesting article on Vale re its take on prospects for Nickel prices (and cobalt). What must be remembered though is that whilst Vale is a top class operator, it's New Caledonia mines are laterite mines, and therefore higher cost for processing, though mainly if not exclusively open pits, and therefore actual extraction cost are more reasonable, though the Island is mid ocean and logistics probably high. I've not been there , so not sure. Some quotes follow.....
"ME
LBOURNE –
Brazil's
Vale is reassessing its loss-making New Caledonian nickel
operations as part of a wider review of low performing assets after new Chief Executive
Fabio Schvartsman took charge last month, a spokesperson said."--------
"The nickel price today is languishing at around $9 000/t with no indication of recovery in the near-term. This has forced us to reassess all areas of the nickel
business, including our
operations in
New Caledonia, which continue to lose money at these prices."----------
"Global nickel miners are coming under renewed pressure to cut costs or close capacity as a flood of cheap ore enters the market, and
Vale has already said it plans to suspend two of its older high-cost Canadian mines this year.
Indonesia and the
Philippines are ramping up shipments after
Indonesia relaxed an ore
export ban earlier this year and a hardline Filipino environmentalist was ousted from the country's
mining ministry.
LME nickel reached a one-year trough of $8 680 last month and has since recovered to around $9 300.
Vale has said that it is aiming to cut cash costs to $10 500 to $11 000 a tonne at its
New Caledonia operations in the second half, as it ramps up production and prices of byproduct cobalt soar."
http://www.miningweekly.com/article...perations-under-review-2017-07-04/rep_id:3650
Another article in similar vein is link:
http://www.miningweekly.com/article...ssure-on-beleaguered-nickel-miners-2017-06-07
"
Citi recently told clients that for the first time in 10 years it saw little chance of a rally in the short, medium or long term.
"Miners have been holding on as long as they can. They will be close to running out of wiggle room in terms of
cutting costs," said
Mark Pervan at consultancy
AME Group in
Sydney.
"We need to see some reasonably sized refined capacity cutbacks to restore prices and confidence back to the market." Consultant
Wood Mackenzie estimates that more than half of the world's nickel industry is running at a loss. High cost mines include those in the
Dominican Republic,
Greece,
Cuba,
Western Australia and
New Caledonia, analysts said.
Brazil's
Vale has already said that it plans to suspend two of its older high-cost Canadian mines this year."
In conclusion I want to point out I do not wish to make our outlook look worse, just to be realistic, so there may be a small upside to the ongoing delays, hard as they are to stomach, in that it seems some production is being taken out of the market and this may help prices. As always, much depends on how China, India and other consumers progress. Electric vehicle developments too are not just good for lithium miners, as we all know, but very promising for cobalt, copper and nickel. Good for manganese too, worth remembering.
Lets hope some good comes of it. Regards to all.
(20min delay)
