PERTH – ASX- and TSX-listed Western Areas has reported record nickel production of 6 278 t for the first two months of the 2011 financial year.

The company said in a statement on Tuesday that the production exceeded its target by 60%, and provided further confidence that the 2010/11 goal of 25 000 t/y of nickel from the Flying Fox and Spotted Quoll operations, in Western Australia, could be reached.
 

Around 3 864 t of nickel was mined from the Tim King pit, at Spotted Quoll, which was double the budget of 1 932 t nickel mined during July/August.

Western Areas expected high levels of production at the Forrestania operations to be maintained as the Spotted Quoll underground project is developed and the Flying Fox T5 orebody ramps up to full production.

Meanwhile, the nickel-sulphide miner noted that two shipments with a total of 15 000 t concentrate, containing 2 100 t of nickel has so far been shipped to China’s largest nickel producer, Jinchuan.

A third shipment is expected to take place in September.

Western Areas has a two-year contract to sell 25 000 t of nickel in concentrate to Jinchuan, as well as an additional 10 000 t/y to diversified miner BHP Billiton’s smelter at Kambalda.

MD Julian Hanna said on Tuesday that China was becoming the dominant global importer of nickel to supply expanding stainless steel, plating and battery industries.

He noted that available nickel supply to China is about 350 000 t/y, compared with a growing demand of up to 450 000 t/y. Simultaneously, China was planning to reduce domestic nickel pig-iron production because of energy restrictions.

“Western Areas is exploring new opportunities in China and introducing the company to new investors in the region. With the start of exports through Esperance, it is logical we should look to expand our activities in China,” said Hanna.

Source:miningweekly