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| Inco Starts To Consign OMG To Refine Nickel On Toll Base From 2nd Half 2006 |
| = 25,000 Tons / Year For Three Years, To Smelt To Nickel Matte At Boliden`s Plant |
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OMG ( OM Group, Inc. ) of the USA announced on the end of last week ( local time ) that we have reached a definitive agreement with Inco Limited to refine 21,000 - 25,000 tons of contained nickel per annum on toll base for three years, starting from the 1st July of 2006 and ending on the 30th June of 2009. OMG refines to nickel metal from nickel matte at OMG`s refinery in Harjavalta of Finland. This contract to refine to nickel metal on toll consignment will be materialized by the following three ways. Firstly, nickel concentrates produced by Inco are transported to Boliden AB in Sweden, operating the plant to smelt copper and nickel, and, then, smelted to nickel matte at Boliden`s smelter. After that, nickel matte will be refined to nickel metal at OMG`s refinery in Harjavalta, which is adjacent to Boliden`s smelter. The quantity of nickel concentrates to be transported from Inco to Boliden`s smelter will come to 240,000 tons per annum. By the three ways as contracted this time, both companies of OMG and Boliden are able to operate their facilities to smelt and refine nickel on a full scale from the second half of 2006, giving a substantial merit to these two companies. The contract agreed upon between Inco, OMG and Boliden to smelt and refine nickel on toll consignment has suddenly come up to the surface and a meaning of this contract seems to be complicated. Inco has developed the Voisey`s Bay nickel project in Labrador of Newfoundland of Canada and started to ship nickel concentrates from this Voisey`s Bay mine from November of 2005. Inco is scheduled to produce 50,000 tons per annum of nickel in nickel concentrates at the Voisey`s Bay mine and, therefore, it is wondered whether the quantity of nickel concentrates to be produced at the existing nickel mines in Sudbury area of Ontario province has a margin to supply for OMG or not. For a reference, in order to materialize the merger between Inco and Falconbridge under process, it was announced that, in relation to the Antimonopoly Act, Falconbridge`s Nikkelverk refinery ( with capacity to produce 80,000 tons / year of refined nickel ) in Norway will be separated from this merger and become an independent company. However, when Nikkelverk refinery with the annual capacity of 80,000 tons in Norway is separated, a balance of capacities to supply nickel concentrates and to smelt and refine nickel concentrates will be broken and, therefore, it was also announced that new Inco has planned to deliver nickel matte to Nikkelverk refinery, which is scheduled to become an independent company, on commercial base. Furthermore, in view of the fact that the quantity of refined nickel sold by Inco is larger than that produced by Inco, Inco purchased refined nickel from outside sources ( approximately 30,000 tons in 2003 and approximately 17,000 tons in 2004 ) and, from a common point of view, a necessity to purchase refined nickel from outside sources is resolved by 20,000 tons per annum of nickel metal to be produced on toll consignment as mentioned above. |
| last modified : Mon 13 Feb, 2006 [10:54] |
