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Considerable Differential Among Attitudes To New Nickel Projects By 4 Major Resources Companies
= AAC Shows Positiveness, BHP Billiton And Rio Tinto Await To See Further Movements
The four companies of BHP Billiton, Rio Tinto, Vale and Anglo American are the so-called major resources enterprises but a considerable differential among the attitudes to new nickel projects taken by these four companies is coming up.

This differential surrounding nickel projects among these four major resources companies has closely related with the projects to develop iron ore, coal and copper, which are being proceeded by them and subject to an extent of funds to be concentrated on and needs from markets. A tendency to give a priority to the developments of iron ore, coal and copper is clearly appearing.

Both companies of BHP Billiton and Rio Tinto have shifted their position to be negative for the nickel projects and sold part of their nickel assets as already possessed by them. In particular, BHP Billiton sold in 2009 their two main bases in Australia for nickel production.

On the other hand, Anglo American recently announced successively the large nickel projects, mainly in Brazil, and, according to this announcement, has planned to expand their annual capacity to produce 40,000 tons of nickel at present (in South Africa, Brazil and Venezuela) to that to produce 167,000 tons in 2011 with an aim to share 10% of the world nickel production. Anglo American also said that the Company has targeted to produce 500,000 tons per annum of nickel in the future.

On the other hand, BHP Billiton withdrew in 2008 from the Halmahera nickel project (with budget of US$1,600 million) in Indonesia and, following this withdrawal, decided in 2009 the sales of two bases to produce nickel in Australia as follows ; (1) in July of 2009, the Yabulu nickel refinery of QNI in Queensland and (2) in December of 2009, the Ravensthorpe nickel project in Western Australia. Accordingly, the bases to produce nickel still left for BHP Billiton are <> Nickel West Division in Western Australia and <> Cerro Matoso in Colombia to produce ferro-nickel.

Therefore, in the beginning of 2010, it was informed by major media in overseas countries that BHP Billion has positioned their nickel operation as a non-core business. However, this information was wrong and, as a matter of fact, BHP Billiton has planned to increase the capacities of two electric furnaces by 10% (to produce 55,000 tons per annum of nickel in ferro-nickel) at Cerro Matoso in Colombia, which will be able to produce ferro-nickel at the most competitive price in the world, in the second half of 2010.

Rio Tinto has obtained from the Government of Indonesia the permit to develop the nickel project in Sampala district of Sulawesi Island, which was a pending matter for them. The Government of Indonesia has officially approved in February of 2010 the New Industry Law and, after that, given this permit to Rio Tinto as a valuable project. However, this nickel project requires a substantial amount of investment (estimated to be US$1,930 million) and, in order to materialize the project, it will be necessary to investigate three main points, which are to develop by themselves, to proceed as a joint venture with partners and to sell the assets concerned.

According to the New Industry Law approved by the Government of Indonesia as mentioned above, the matter in question is the stipulation, which requests to allow Indonesian enterprises to acquire 20% of the capital within 5 years after commercial nickel production has been commenced. This subject will also relate to the Weda Bay nickel project in Halmahera Island of Indonesia, being proceeded by Eramet of France.

As regards the nickel projects concerned with Rio Tinto, Kennecott Copper, which is a subsidiary of Rio Tinto, has been progressing the Eagle nickel project in Michigan State of the USA and is scheduled to produce 16,000 tons per annum of nickel in nickel concentrates from 2010 for the next 7 years. This nickel production in the USA is the case since Hanna Mining stopped nickel production 20 years ago.

Vale-Inco has faced rough going in resolution of the strike already continued for 8 months mainly at the Sudbury Division in Canada but, on the other hand, an issue of the Goro nickel project (with capacity to produce 60,000 tons / year) in New Caledonia is marked and this project is now moving to operate in the first half of 2010. Its trial production took a long time but the commercial production of nickel is expected to commence from April of 2010. Vale-Inco is scheduled to produce 20,000 tons per annum of nickel in 2010. The operation of autoclave was commissioned in order and is supposed to start its operation on a substantial scale, after having once checked the facilities for 3 weeks. A comment on the facilities by the engineers concerned was already informed in last week but any official announcement from the Company was not made yet.

In addition to the Goro nickel project in New Caledonia as mentioned above, Vale-Inco has been currently proceeding the Onca-Puma nickel project (to produce 58,000 tons / year) in Para State of Brazil and is scheduled to commence its operation in the second half of 2010. Furthermore, Vale-Inco plans the Vermelho nickel project in Carajas of Para State in Brazil but has reviewed the initial program to operate in 2013.

The nickel projects, which are being developed by the four major resources companies, are as per the table shown below ;
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last modified : Fri 26 Mar, 2010 [10:07]
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