Nickel price sustainableHigh nickel prices sustainable: Norilsk
Norilsk Nickel, the world's largest nickel producer, expects nickel prices to remain where they currently are over the medium term, as market fundamentals remain the same over the next year or so.
Speaking on an interim results conference call, management said the supply of the metal would not go up materially until 2008, when projects being built by Inco and BHP Billiton (BIL) come on stream.
On the demand side no slow down is predicted, according to the company.
Nickel is currently trading at $30,700/t, 129% up since the year's starting price of $13,380/t.
Norilsk made an after tax profit of US$2.37 billion for the half year to end-June, compared to $974 million a year earlier. The company made US$4.2 billion in interim revenues, compared to US$3.3 billion the year before.
The company produced 117,000 tonnes of nickel, 187,000 tonnes of copper, 1.5 million ounces of palladium and 336,000 ounces of platinum in the half year.
South African platinum producers extract small amounts of nickel in the mining process.
For example, Implats (IMP) the second largest platinum miner, sold 14,800 tons of nickel in the financial year to end-June for $15,343/t. Nickel sales contributed 5.2% to total sales of 17.5 billion rand for the group.
African Rainbow Minerals (ARM) and LionOre own Nkomati, the country's primary nickel mine, which produces about 5,000 tons of nickel a year. Investigations are underway to boost that production.
Staffer , INet
09 October 2006