Venezuela takes over Loma de Níquel, workers get the shaft

I know, old joke, and it doesn’t work well for an open pit mine. But it’s unfortunately true. Anglo American is now fully out of Venezuela, having sold its coal mine and involuntarily returned its nickel concession.

The Venezuelan state took over operations of the Loma de Níquel mine at midnight Sunday morning, confirming what I reported here a month earlier. The situation was more like my “Imaginary scenario 2,” in which the government has no idea it’s about to be in the nickel business and doesn’t handle the transition very well. Mine manager Carlos Dini, cited in El Universal, says PDVSA is now “operating” the mine, although a worker at the mine says it’s not PDVSA but rather managers left over from Anglo American who are running things.

Anglo confirming Venezuela departure? UPDATE: No, but…

UPDATE: A worker tells me Anglo has said no such thing. However, the government did send someone to guarantee workers that they’d still have their jobs after Nov. 11. So, I guess it’s all going according to plan…

Earlier version of story:

Venezuela’s gossip-master extraordinaire Nelson Bocaranda says Anglo American has told Venezuelan mine workers to stay home tomorrow as its nickel mine will be expropriated. I haven’t confirmed that yet, but it would fit with the Venezuelan government’s usual method of avoiding sabotage — always expropriate a bit before the last possible minute.

In other news, a worker writes in to say that the company has been totally closed-mouthed about this whole operation, but that workers knew something was afoot as mine operations halted and the site’s electrical furnaces were cut to minimum power. No metal output in October, according to my source.

Don’t mind if I toot my own horn a bit more in pointing out that readers here knew about Anglo’s departure from Venezuela before they told their own workers. See, the Internet is more than just cat bounces after all.

Oh wow, forget mining & energy, I want to bounce cats.

UPDATE2: I missed this, from Reuters on Friday: Anglo has indeed confirmed the end of metal production at Loma de Niquel and the company’s likely departure from Venezuela.

Loma de Niquel, the Venezuelan ferronickel producer owned by Anglo-American, closed in September as a long-running dispute over the company’s mining concessions comes to a head.

Anglo has warned that unless a deal can be reached before November 10, when its last three concessions expire, “there will be no further production contribution from this operation”.

If that turns out to be the case, it will remove around 17,000 tonnes of annual capacity from the market, a larger hit on supply than any of the cost-related cuts so far announced.

I would dispute his claim that there was any long-running dispute. But otherwise, nice work getting Anglo’s statement.

Exclusive: Anglo-American out of Venezuela in a month

Image taken without permission from Minera Loma de Niquel website, click for original.

Anglo American has a nickel mine in Venezuela. A month from now, from what I hear, that won’t be the case. The concessions now being mined expire Nov. 11 along with the site environmental permit, according to a person familiar with the situation. The government hasn’t renewed the concessions, so it’s lame duck time for them. The company now has a month to comply with its permit requirements — including returning the site in pristine condition. That won’t happen. The site ain’t in bad shape as mines go, but it has some big gouges in the ground where scoops pick up damp, crumbly, pale-blue ore, dump it on trucks, which dump it into some of the most ridiculously hot furnaces you can imagine (1650°C), where the nickel is smelted out and turned into dark pellets that are cooled in little water pools and then loaded into containers (very shallow, or the container would be too heavy) and trucked to Puerto Cabello and thence to points unknown.

The writing has been on the wall for years, as Anglo American has been writing down the value of its sole remaining Venezuelan asset.