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Present Circumstances And Near Future Pictures Of Deferred Nickel Projects (1)
= Economic Crisis Has Caused To Postpone 80% Of Nickel Projects, 40,000 Tons Will Be Newly Produced In 2009
It has passed one year after the world economy has entered into an unprecedented crisis originated from the monetary emergency at Lehman Brothers of the USA. This problem has put a substantial impact on the world economy. More than 80% of the surged new nickel projects have been deferred to proceed with a terrible speed. Only the two nickel projects, which are the Kwangyang nickel project in South Korea by Posco - SMSP to produce ferro-nickel and the Coral Bay nickel project (second phase) in Philippines by Sumitomo Metal Mining to produce mixed nickel sulfide, have been commissioned in 2009 for nickel production. The current circumstances of main nickel projects in the world are as per the tables attached hereto.

Major financial organizations in Wall Street of the USA were once prepared to finance for these new nickel projects but, owing to the storm, which international price of nickel metal fell to a lower level than US$5 per lb., an outlook for nickel business in the future has collapsed and new nickel projects have been driven to defer to develop.

More than 30 of new nickel projects, including small ones in Western Australia, are scheduled to complete in 2009 to 2015 and even main nickel projects have finally targeted to produce nearly 800,000 tons of nickel on an annualized base by 2015 as a border line. However, only a few projects commenced nickel production in 2009. New capacities in 2009 are able to produce 82,000 tons in total of nickel for a year, consisting of ferro-nickel, nickel intermediate and nickel ore, but the actual output in 2009 is anticipated to be less than 40,000 tons per annum on nickel content base.

The Goro nickel project (with capacity to produce 60,000 tons / year) in New Caledonia, which is being developed by Vale-Inco and marked as the largest one in the world, was initially scheduled to operate from 2009 but has delayed to commence its operation. In the course of time, a simple accident for leakage of sulfuric acid occurred in late March of 2009 and the work for this project was suspended for 2 months. A test to insert raw material into autoclave has been finally planned to practice in October - December quarter of 2009 but it was already known that nickel production on a substantial scale will be commenced in 2010. This project in New Caledonia has taken a cautious attitude for operation and is scheduled to produce 20,000 tons of nickel in 2010. The amount to invest in this nickel project was initially estimated to be 2,300 million but, after this estimation was revised by several times, the budget was raised to US$3,210 million in last year and the latest estimation has expanded to a scale of US$4,300 million.

Nevertheless, some projects out of the flooded ones have been decided to withdraw. The Ravensthorpe nickel project (with capacity to produce 50,000 tons / year) in Western Australia achieved to deliver first production in October - December quarter of 2008 and actually produced 2,000 tons of nickel in 2008 but was obliged to suspend its operation from January of 2009. Therefore, the Goro nickel project has disappeared from the lineup to supply nickel for the time being. In view of the steeply risen nickel price arisen in 2007, the Cawse nickel refinery (with capacity to produce 10,000 tons / year) in Western Australia, which has been taken over by Norilsk Nickel of Russia, once resumed nickel production but, owing to the drastically fallen nickel price from autumn of 2008, was enforced to withdraw again from nickel production. The nickel projects, which have been concerned with BHP Billiton and determined to withdraw, have included the Halmahera project (with capacity to produce 27,000 tons / year) in Indonesia, in addition to the Revensthorpe nickel project as mentioned above.

A majority of these nickel projects has deferred to develop in 2010 to 2013 and the total capacity to produce nickel by these postponed projects is anticipated to come up to a scale of 630,000 tons per annum, Among the deferred nickel projects, 5 to 6 projects have targeted to commence nickel production in 2010. When these projects start nickel production as scheduled, the apparent quantity of nickel to be newly produced in 2010 is estimated at 71,000 tons, putting a certain pressure on the world market of nickel.

However, apart from the Goro nickel project as mentioned above, the scale to produce nickel in form of metal through other projects will be restricted. In comparison with new production of nickel metal, nickel-contained pig iron (including low grade ferro-nickel), which China supposedly produced on a scale of 70,000 - 80,000 tons per annum on nickel content base in 2009, is forecasted to increase the output in 2010 to a scale of 130,000 tons at least. Accordingly, it is not negligible to have a power for nickel supply from this side.

Namely, among new projects to commence nickel supply from 2010, excluding the Goro nickel project in New Caledonia, all of the Santa Rita project (in Bahia / Brazil), the Rim South project (in Sudbury / Canada) and the Nkomati project (in Mqumlanga / South Africa) are to develop newly nickel ore. In order to participate directly in the nickel market as new sources for nickel supply, these nickel projects are required to have plants to refine nickel. In this meaning, a pressure by new supply of nickel in 2010 is thought to be unexpectedly small. The project to operate newly nickel mine (including part of rehabilitation) in Sudbury of Canada will appear as that to replace with the mine in Sudbury, having suffered from high cost.
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last modified : Mon 02 Nov, 2009 [10:41]
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