Nickel - Major Correction, where to next ?

[paul29]

RUSSIA'S Norilsk Nickel will suspend the two remaining mines in its Australian nickel operations because low prices have made the operations unsustainable.

Norilsk will suspend the Black Swan and Lake Johnston mines immediately, cutting staff by about 330 from March 1 to leave a small number of employees to carry out care and maintenance at the sites.

Last year, the two mines produced about 25,000 tonnes of nickel concentrate.

Norilsk owns a number of mines in Western Australia, producing almost 30,000 tonnes annually.

Norilsk bought US-based OM Group's nickel business for $US408 million in 2007 as well as taking over Australia's third-largest nickel miner, LionOre Mining International, for $US6.36 billion when nickel was bringing record prices.

In November, the world's biggest nickel miner shut its Cawse and Waterloo operations because of the metal price slump.

Australian nickel miner Western Areas said yesterday it had restructured its ore offtake deal with Norilsk, relying instead on its own concentrator, which is in the start-up phase. Nickel is mainly used to make stainless steel, and global steel prices fell by about 40 per cent during the course of last year.

After hitting record highs of more than $US50,000 a tonne in mid-2007, nickel plunged to a five-year low of $US8850 a tonne in October, forcing many operations to shut down.

Earlier this year, BHP Billiton announced it would shut its 50,000 tonne Ravensthorpe nickel laterite operation.

It took an impairment charge of $US3.36 billion from the project, which it commissioned last year.

[tricha]

Interesting picture, something strange is happening with the stock levels, which generally trend up at this time of the year.

[tricha]

RUSSIA'S Norilsk Nickel will suspend the two remaining mines in its Australian nickel operations because low prices have made the operations unsustainable.

Norilsk will suspend the Black Swan and Lake Johnston mines immediately, cutting staff by about 330 from March 1 to leave a small number of employees to carry out care and maintenance at the sites.

Last year, the two mines produced about 25,000 tonnes of nickel concentrate.

Norilsk owns a number of mines in Western Australia, producing almost 30,000 tonnes annually.

Norilsk bought US-based OM Group's nickel business for $US408 million in 2007 as well as taking over Australia's third-largest nickel miner, LionOre Mining International, for $US6.36 billion when nickel was bringing record prices.

In November, the world's biggest nickel miner shut its Cawse and Waterloo operations because of the metal price slump.

Australian nickel miner Western Areas said yesterday it had restructured its ore offtake deal with Norilsk, relying instead on its own concentrator, which is in the start-up phase. Nickel is mainly used to make stainless steel, and global steel prices fell by about 40 per cent during the course of last year.

After hitting record highs of more than $US50,000 a tonne in mid-2007, nickel plunged to a five-year low of $US8850 a tonne in October, forcing many operations to shut down.

Earlier this year, BHP Billiton announced it would shut its 50,000 tonne Ravensthorpe nickel laterite operation.

It took an impairment charge of $US3.36 billion from the project, which it commissioned last year.

I maintain that something odd is happening with the Nickel LME stocks.

It could mean a shortage of nickel, is coming again. Most producers are suffering with the high Aussie $ and lower nickel price.
Lake Johnston is starting up again, talk is Australian nickel miner Western Areas, will use Norilsk plant Lake Johnson to concentrate their overflow ore.
Hmm, perfect marriage, Western Ares is dirt cheap, so do not be surprised if Norisk mount a take over very soon.

Happy hunting folks.

[tricha]

[QUOTE=tricha;356474]Interesting picture, something strange is happening with the stock levels, which generally trend up at this time of the year.

The picture is broke, but the stock levels are still dropping, when historically at this time of the year they should be rising.

I have not a clue what is going on, I can only guess is, that at this price nickel mines, are unprofitable and are reducing output.
IGO, PAN and MCR will strugglle at the current nickel price, WSA will reveal all in a week.

If there is another nickel shortage, all these companies will rebound. WSA will be printing money.

[gazprom1]

Hi Tricha,

Who knows when the nickel price will rebound but IMO PAN will perofrm ok. They are 34% hedged for FY2012 according to their numbers. Also, their cash costs per pound is relatively low and can still make money at these levels. Maybe a good opportunity for them to scoop up an under pressure producer as have cash in the bank.

Gazprom

[JBmurc]

Buying a few shares in WMG ....have they discovered the next "Mt Kieth" Nickel monster deposit ???? early days but some great signs

https://thewest.com.au/business/publ...rce-c-10372105

[Sideshow Bob]

Great thread dredge......almost 12 years between drinks!!

[JBmurc]

Yep ASX has a huge amount of stocks /resources/sectors and so few ST members in the ASX markets.(dead opposite to you NZX ). couldn't be assed starting another thread for Nickel ...