It has been a little more than a year now since Murilo Ferreira
assumed his post as president and CEO of Vale Inco Ltd., the
wholly owned Canadian subsidiary of Brazilian-based
Companhia Vale do Rio Doce (Vale). During that time, Ferreira
traded the tropical temperatures of Brazil for those of Toronto,
where he helped navigate the 106-year-old company through
a name and branding change, and oversaw one of the most
profitable years the company has ever experienced.
After all of that, even a spirited executive would have every
right to be a little tired, no? Well, not Ferreira. Slightly jet-lagged
maybe — from visiting Vale Inco’s operations and projects in
20 countries around the globe, and a marketing network that
extends to 40 countries — but the enthusiasm and energy
emanating from this dynamic leader is undeniable.
Of course, it certainly helps that Vale recently announced
that in 2007 it enjoyed gross revenues of US$33.1 billion — the
highest in the company’s history and 28.8 per cent more than
that recorded in 2006.The same report also indicated that nickel
was second only to iron ore in terms of revenue generation.
We asked Ferreira to share his thoughts on the nickel industry
and where he perceives it is headed. The future, we discover,
looks pretty bright.
CIM: 2007 was quite a year for the nickel market.
Ferreira: Yes, it was a very exciting and challenging year. We
reached new records in nickel prices and there were huge
increases in Chinese steel production. There was also robust
growth in the demand for high nickel alloys, mainly due to the
energy and aerospace sectors.
On the supply side, many of the traditional suppliers struggled.
Most suffered with the supply interruptions, so in this
regard, the large increase in nickel pig iron from China, instead
of being a problem, was actually good news for the whole
industry, as it brought more balance to the market.
CIM: Is this demand from China expected to continue?
Ferreira: Yes, we are very positive that in the next few years
Chinese steel production will continue to drive growth in nickel
demand. Chinese demand has grown 29 per cent on average
between 2000 and 2007. It’s pretty unbelievable, but we still
forecast that demand will grow strongly over the next few years.
CIM: How does Vale Inco hope to meet this demand?
Ferreira: We are, and will continue to be, extremely focused on
our customers. In this regard, it’s important for us to have a
high-quality product to supply to our customers.We have by far
the largest nickel reserves — 27 per cent of the world’s reserves
— which will serve as a strong foundation for the future. From
that we can expect a good pipeline from which to bring new
projects that will continue to drive this growth.
We have a lot of promise in our Totten mine project — the
first new Vale Inco mine in Sudbury in more than 35 years.We
are going ahead with the
Goro project in New
Caledonia, where we plan to
ramp up in the last quarter
of 2008. We also have the
Onça Puma project underway
in Brazil, which we’re
forecasting to start in the
first quarter of 2009. There’s
also PT Inco in Indonesia. In
addition,we have a commitment
to build a new refinery
in Voisey’s Bay.