Water Iron Explosion

Vale ready to weather storm

Falling nickel prices are being caused by the production of nickel pig iron in China, a mining industry expert says.

"(It's caused by) the market realization that there's more production in China from nickel pig iron," said Terence Ortslan, the managing director of TSO & Associates, a research firm focused on the mining sector.

"(Production is) going to reach a record amount and probably we have not seen the end of it ... that's carving into the market share of the producers and the nickel coming from traditional sources for stainless steel."

Nickel pig iron is low-grade nickel ore from the Philippines and Indonesia combined with coke. It's popular because it is less costly to produce than nickel.

"I think we have a new trend with the Chinese nickel iron pig production," said Ortslan, adding that it's a trend the market is worried about.

In February, the price of nickel was just under US $14 per pound, but has since dropped to slightly more than US $10.

Another reason for the falling prices, Ortslan said, is inventory buildup.

Vale's Angie Robson would not comment on the falling nickel prices, but said the company is working to make changes so they won't be affected in the future.

"We're making significant investments over the next five years to become a more productive and a more efficient operation so that we can be profitable and successful in any price cycle," said Robson.

"Prices are cyclical, but we're making improvements so that we can weather those storms when prices fall."

Vale lost approximately 4% of nickel production planned for 2011 after an explosion in its No. 2 furnace in February. The company announced this week the furnace has been rebuilt and is back in production.

The explosion was caused by a tapping block failure, which led molten matte to leak and come into contact with cool water.

There were no layoffs resulting from the furnace shutdown, but reshuffling was necessary while it was being rebuilt.

"We had to move to a one-furnace operation as a result, which meant we had to scale back production in a couple of our mines to accommodate that, but there were no layoffs. We had to transfer some employees from their home mine to other mines. Now that the No. 2 furnace is back online and we're finished our planned maintenance period, with both furnaces running we'll be back to normal and stable operations.

City Fire Service called to Essar Steel explosion - Sault This ...

Essar Steel Fire (Revision)

SSMFS responded to ESSAR Steel after being called by the ESSAR Steel Fire Service to assist in extinguishing fires in the # 7 Blast Furnace area. The fires were under control by 01:12 hours. There was no structural damage to the Blast Furnace; however, an office trailer and a personnel transport vehicle were totally destroyed.

The explosion was caused by molten iron which spilled into a slag pit that contained water. As a result of the spill, hydrogen gas was formed which in turn caused the explosion. There were no injuries reported and the dollar value caused by the explosion has not yet been determined.

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