nickel price up...A tropical cyclone forced five mines in New Caledonia producing 4 percent of the world's nickel to shut on Friday, while flooding in Australia shut in millions of metric tons in coal and aluminum exports.
Severe weather is raising the cost of raw materials, potentially fuelling inflation in the industrial heartlands of Asia, which rely on the commodities to produce steel, generate power and make everything from bathroom fixtures to airplanes.
The price of steel making coal from Australia has jumped 35 percent since flooding caused by monsoon rains just before Christmas idled nearly 50 mines in Queensland state, while London Metal Exchange-traded nickel has risen 8 percent since Monday to an eight-month high of $25,999 on Thursday.
New Caledonia, sandwiched between Tahiti and Australia and home to a quarter of world's known nickel reserves, was on alert on Friday as tropical cyclone Vania was expected to hit the eastern part of the island sometime early on Saturday with wind gusts up to 140 km per hour.
Nickel has been the lifeblood of the island's economy for more than a century.
The island's biggest employer, Societe Le Nickel (SLN), has suspended nickel mining at its five locations ahead of the storm, a spokeswoman in the capital Noumea told Reuters by telephone.
SLN's 55,000-tonnes-per-year Doniambo smelter in Noumea was taking precautionary measures while continuing to operate. SLN is a subsidiary of France's Eramet.
Much of the nickel produced by SLN is used to manufacture stainless steel in Japan.
Anglo-Swiss mining group Xstrata said it was also taking measures to protect employees and secure the construction site of its $3.85 billion Koniambo nickel project on the island.
Koniambo, 49 percent owned by London-listed Xstrata, is due to start processing ore next year and eventually ramp up to produce 60,000 metric tons a year.
Australia's QNI Nickel Ltd, which feeds its 30,000-tonnes-per-year Yabulu refinery with nickel ores from New Caledonia, has managed to build ample supplies to ride out any disruption to shipments stemming from the storm, a company spokesman said.
"Part of our wet season strategy this year has been to build up a stockpile that would get us through a couple of months," QNI'S spokesman said.
https://www.reuters.com/article/idUSTRE70D0KO20110114