Nickel miners set to change? Or the same old story?
Published by MAC on 2005-10-12
Nickel miners set to change? Or the same old story?
12th October 2005
This week, the world's second biggest nickel producer, Canada's Inco, announced that it would merge with the country's second major producer, Falconbridge. "New Inco" (there's nothing like changing your title to imply you're also changing your modus operandi) would at a stroke become the sixth largest mining company on the planet.
As with many M&A's (mergers and acquisitions) in the minerals industry, the main aims of the two companies are: to cut costs (an estimated $350 million a year), consolidate operations (the two companies have huge mines and plants in the Sudbury region of Ontario), and boost market access.
However, mining analysts aren't unanimous in backing the deal - mainly on economic grounds: with metal prices riding high, it will be a costly exercise, perhaps too costly for some speculators.
There's also "the Xstrata factor". The UK-Swiss mining conglomerate, controlled by the shadowy private trading company, Glencore, holds just under 20% of Falconbridge. Will Xstrata walk away with money under its belt? Will it make a counter-bid, albeit an expensive one? Or will it bide its time (perhaps increasing its stake), and strike for ownership at a later date?
As numerous postings on this site reveal, Inco is one of the least responsible, and less responsive, of big mining companies. Falconbridge has a somewhat better reputation - both among communities and workers - though the differences shouldn't be over-stressed. If Xstrata - itself no slouch when it comes to environmental destruction - does take over New Inco, standards that are already unacceptably low within nickel mining and smeltingy, could fall even lower.
Meanwhile, Norilsk Nikel - an even greater corporate polluter than Inco - looks likely to be toppled from its perch as number one in the nickel industry. Possibly in response to the threatened Inco-Falconbridg merger, Zhak Rozenberg, the company's deputy director has just "unveiled" a major programme to reduce its noxious emissions and water use.
But, read between the lines: this won't happen yet and it seems little more than hype. "Ecological problems are not ecological problems as such," declares Mr Rozenberg. "they are a result of unsatisfactory technology." Yet reducing Norilsk's SO2 emissions to virtually nil is a "dream".
As for his views on what a nickel-free world would look like:"We might as well return to the stone age, sit by a crystal clear river all day, eat absolutely ecologically clean fish, and that would be it."
Indeed, Mr Rozenberg!
Interview - Norilsk will Become Cleaner, but not Overnight
Story by Maria Golovnina, Planet Ark (Reuters)
October 12, 2005
MOSCOW - Norilsk Nickel, one of Russia's heaviest industrial polluters, has earmarked billions of dollars to turn itself into a greener company -- but the ambitious changes won't happen overnight.
Zhak Rozenberg, Norilsk's deputy general director, told Reuters the company would spend as much as 100 billion roubles ($3.5 billion) by 2015 on ecology-related projects at its huge Soviet-era plants lying north of the Arctic Circle.
"We were set up at a time when ... there was no ecological ideology, when the Soviet Union had an entirely different agenda," Rozenberg, who supervises Norilsk's green projects, said in an interview.
"As a global company we certainly have to accept global standards. That's why we are introducing international technology at our facilities. But one can't force us to drop everything else and achieve that overnight."
Norilsk, the world's biggest producer of nickel and palladium, has long been under Western pressure to do more to cut emissions at its operations around Norilsk -- the world's second largest city above the Arctic Circle after Murmansk.
Norilsk says it has become more ecologically aware since its Arctic production sites -- set up in the 1930s by prison labour -- were taken over in the 1990s by managers who wanted to build a more competitive and westernised company.
"We are doing all we can for the company to achieve high international standards for ecology by 2015 and turn into a competitive company in all respects," Rozenberg said. Norilsk expects to reduce atmospheric emissions of sulphur dioxide on the Taimyr peninsula by 78 per cent by 2015, and by more than 90 percent on the Kola peninsula by mid-2008.
Winds
Critics say the economic chaos of the 1990s and Norilsk's focus on production growth have put off clean-up efforts, with some ecologists saying toxic dust from Norilsk's smelters can be detected as far away as Canada.
Rozenberg said more scientific work needed to be done to establish whether those concerns were justified.
"The Siberian department of the Russian Academy of Sciences has been studying these processes in the past three years and has shown that sulphur dioxide can spread for about 80 km (50 miles)," he said. "This data is being studied and analysed at the moment."
Rozenberg said that Norilsk, while seeking to raise output, will shut down a number of outdated production and processing facilities and reduce the amount of sulphur emissions resulting from the smelting process.
Norilsk is also working with the Norwegian government on a project to cut noxious emissions in Kola and plans to reduce water use at its plants.
"Ecological problems are not ecological problems as such. They come as a result of unsatisfactory technology," he said.
"That's why ... we are looking for ways of improving that technology which would allow us -- and that's a dream -- to produce so little (sulphur) dioxide as to be harmless for the environment."
Since 1996, Norilsk has cut emissions of solid waste per tonne of produced metal by 60.4 percent, while gas consumption fell by 42.4 percent.
Rozenberg played down international pressure on the company, saying that Norilsk's ecology projects were in line with Russia's broader social priorities of raising living standards.
"When talking about the globalisation of ecology we have to consider our national interests first, and that's a combination of ecological, social and economic policies," he said.
"First of all we have to improve the lives of people who work for us, improve their living environment, and at the same time think about forests, water and grass. Ecological and economic projects have to be harmonised.
"Otherwise we might as well return to the stone age, sit by a crystal clear river all day, eat absolutely ecologically clean fish, and that would be it."
Mining assets of the new Inco Ltd.
12th October 2005
NICKEL OPERATIONS
Montcalm mine (Timmins, Ontario)
Raglan mine (Nunavik Territory, Quebec)
Sudbury mines, mills & smelters (Sudbury, Ontario)
Thompson mines, mill & smelter (Thompson, Manitoba)
Voisey's Bay mine & mill (Newfoundland & Labrador)
Falcondo mine & plant (Dominican Republic)
Clydach refinery (Swansea, Wales)
Taiwan refinery (Kaohsiung, Taiwan)
NICKEL PROJECTS
Goro (New Caledonia)
Koniambo (New Caledonia)
Kabanga (Tanzania)
Nickel Rim South (Sudbury, Ontario)
PT Inco expansion (Indonesia)
COPPER OPERATIONS
Kidd Creek mines, mill & smelter (Timmins, Ontario)
Horne smelter (Rouyn-Noranda, Quebec)
CCR refinery (Montreal, Quebec)
Anatamina mine (Ancash, Peru)
Collahuasi mine (Region I, Chile)
Lomas Bayas mine (Region II, Chile)
Altonorte smelter (Region II, Chile)
COPPER PROJECTS
Frieda River (Papua New Guinea)
El Morro (Region III, Chile)
El Pachon (Argentina)
West Wall (Region IV, Chile)
ZINC OPERATIONS
Brunswick mine & mill (Bathurst, New Brunswick)
Brunswick smelter (Belledune, New Brunswick)
Kidd Creek refinery (Timmins, Ontario)
CEZ refinery (Valleyfield, Quebec)
General Smelting (Lachine, Quebec)
ZINC PROJECTS
Lady Loretta (Queensland, Australia)
Lennard Shelf (Western Australia, Australia)
Perseverance (Matagami, Quebec)
COBALT OPERATION
Port Colborne refinery (Port Colborne, Ontario)
ALUMINUM
St. Ann bauxite mine (Discovery Bay, Jamaica)
Gramercy Alumina refinery (Gramercy, Louisiana)
Primary aluminum smelter (New Madrid, Missouri)
Cozy with corporations
Ivan Morgan, Newfoundland Independent
9-15th October 2005 (Volume 3, Issue 41)
Ivan Morgan questions relationship between MUN and Inco, considering company's human rights record
What is innovative? What isn't? I recently read a series of press releases from a group calling themselves the Society for Corporate Environmental and Social Responsibility - Memorial University of Newfoundland chapter.
I think they are an innovative bunch. They work towards making corporations better behaved towards human beings. They have made serious allegations regarding human rights abuses perpetrated by Inco in Indonesia, New Caledonia and Guatemala. How they have been treated by Memorial's administrations is as telling as it is troubling.
Memorial accepted a ton of money from Inco to build something called the Inco Innovation Centre, which officially opened recently. I went on MUN's website and found lots of great news about the innovation centre. It was written in that dreadful everything's-coming-up-roses style so favoured by communications weasels. They used the word innovation a lot. If you believed their press, the centre is a beacon of wonderfulness. Scott Hand, Inco president, was quoted as saying: "We believe that this centre will help to foster and promote the kind of partnerships and innovation that have made Voisey's Bay possible; not just technical innovation, but social, political and economic innovation as well".
MUN's president, Dr. Axel Meisen was quoted as saying "... the true value of the new building will come from the innovations that the centre will foster at Memorial..." Sounds great.
But there wasn't a word about the bold and bright young men and women who showed up with the innovative social and political questions for Dr. Meisen and Mr. Hand. Nothing about pointed questions they have regarding Inco's abysmal human rights record in other parts of the world. Nothing about their allegations of hired security staff (I actually prefer the term goons) Inco may have employed to intimidate protesters in Indonesia.
No reponse to their allegations that Inco is brutal to and contemptuous of people in New Caledonia and Guatemala.
Maybe their innovation is the wrong kind. Maybe the centre is for the innovative students who know where their bread is buttered and know when to shut up. Maybe that's the kind of student who makes Dr. Meisen and Mr. Hand happy.
I don't like how cozy MUN is getting with corporations. We pay for the university out of our taxes. Inco's only reason for existing is to make money for its shareholders. That's it. So when they act like they are helping us, and helping the university, I get suspicious.
Why are Dr. Meisen and the rest of th university hierarchy so quiet on these troubling questions? I don't know if these young people have a case, but if they do, shouldn't Dr. Meisen listen? Is he not in a leadership role? With his clout, he might actually be able to bring INco to heel on some of these issues. No harm in trying - or is there?
What is the cost of the Inco Innovation Centre? And I don't mean the dollars and cents Inco wrote off humouring us. I mean the cost to our university's reputation. Have we spent all these decades building a university only to have it develop a reputation for being easily bought?
A university is supposed to train people to ask questions - to challenge orthodoxies and debate issues. Aren't these young people doing just that?
Why are they marginalized?
The fact that corporations like Inco are brutal to people in Third World countries is old news. Isn't it innovative to force them to clean up their acts?
I understand Inco's behaviour. They have to make money for their shareholders. But is it the university administration's job to stifle their own students for fear of embarrasing their corporate clients? If these young students are misled, would it not be better to engage them in healthy debate? What does ignoring them prove?
Dr. Meisen, you seem to have ignored your own students. Can I ask you a few questions? Do you have a clear, unequivocal statement on the university's position on the human rights of the people of Indonesia, New Caledonis and Guatamala? What standards does MUN have in accepting money, continuing to accept money, or continuing to be associated with corporations who blatantly abuse human rights in other parts of the world? In other words, what would Inco have to do to make you take their name off the centre?
Or could you if you wanted to? Would you - in your role as leader of our university - ask Inco for a clear outline of their policies regarding the human rights of the people affected by their mining activities? Can we be innovative in encouraging Inco to adopt a solid human rights policy, based on Canadian standards, for its holdings in every country?
If your staff has trouble writing it, I would happily help - no strings attached and free of charge.
-- CESR -Society for Corporate Environmental and Social Responsibility Memorial University of Newfoundland Chapter
Website: http://www.ucs.mun.ca/~cesr/index.asp
Mineros de níquel: ¿habrá cambios o será más de lo mismo?"
Durante esta semana, el segundo productor mundial de níquel, la canadiense INCO, anunció su intención de fusionarse con Falconbridge, la segunda productora de ese metal en Canadá. La "nueva INCO" (no hay nada mejor que cambiar de nombre para hacer ver que se cambia un modus operandi), se convertiría en la sexta mayor compañía minera del mundo.
Como muchas otras fusiones y adquisiciones en la industria minera, los objetivos principales de las compañías interesadas son: reducir costos (unos 350 millones al año), consolidar operaciones (ambas compañías tienen grandes minas y plantas cerca de Ontario), y acceder a nuevos mercados.
Sin embargo, los analistas del sector no apoyan la operación de manera unánime, básicamente por motivos económicos: con las cotizaciones en alza, podría tratarse de un ejercicio costoso, quizá demasiado costoso para algunos especuladores.
Está también el "factor Xstrata". El conglomerado minero suizo-inglés, controlado por la sombría compañía de comercio privada Glencore, posee el 20 por ciento de Falconbridge. ¿Xstrata se irá tranquilamente con dinero en la billetera? ¿O hará una contra oferta? ¿O esperará su momento (quizá ampliando su participación) para luego intentar tomar control de la compañía?
Tal como revelan muchas publicaciones en este sitio web, INCO es una de las compañías mineras grandes menos responsables, y de las que menos responden. Falconbridge tiene quizá una mejor reputación entre comunidades y trabajadores, aunque sus diferencias no deben sobredimensionarse. Si Xstrata, que no se queda atrás en cuanto a destrucción del medioambiente, se queda finalmente con la Nueva INCO, los estándares actuales de la minería y refinación del níquel, que ahora son inaceptablemente bajos, podrían ser aún peores.
Mientras tanto la empresa Norilsk Nikel, un contaminante corporativo aún peor que INCO, parece estar por perder su lugar privilegiado como número uno en la industria del níquel. Posiblemente en respuesta a la amenzada de la fusión INCO-Falconbridge, el director de la compañía, Zhak Rozenberg, acaba de "develar" un programa para reducción de emisiones y uso de agua en todas sus operaciones.
Pero leamos entre líneas: esto no pasará inmediatamente, y parece más bien poco más que una estrategia de publicidad. "Los problemas ecológicos no son propiamente ecológicos" declaró el señor Rozenberg. "Son el resultado de tecnología insatisfactoria". De hecho, que Norilsk reduzca sus emisiones de CO2 a prácticamente nada es "un sueño".
Con respecto a su visión de lo que sería un mundo libre de níquel, Rozenberg dijo que "volveríamos a la edad de piedra, sentados frente a un río cristalino todo el día, comiendo pescado absolutamente ecológico y limpio, y eso sería todo".
Efectivamente, señor Rozenberg!