The Age reported that short term concerns about the strength of the rebound in nickel prices has caused the Chinese owned Minerals and Metals Group to hold off on committing to an earlier restart of the mothballed Avebury nickel mine in Tasmania.
MMG, the Australian offshoot of China Minmetals Corporation and the group that acquired Avebury and other assets from OZ Minerals for USD 1.7 billion in June wants to see nickel prices consolidate at more than USD 20,000 per tonne before restarting Avebury. Avebury, near Zeehan on Tasmania's west coast was mothballed last December when nickel prices fell below USD 10,000 per tonne in response to the collapse in demand due to the now waning global financial crisis.
Nickel has since rebounded to USD 19,500 per tonne but MMG is still not tempted to restart Avebury a mine that was an embarrassment for previous owner OZ as it was opened only in August 2008 at a cost of AUD 880 million.
Mr Andrew Michelmore MD of MMG and former CEO of OZ said that didn't want to open it up only to shut it again.
Mr Michelmore said that while there was faith in the long term outlook for nickel, MMG was not yet comfortable about its short term performance because of the large amount of stocks in London Metal Exchange warehouses and the prospect of new supplies from 2 big laterite nickel projects Goro in New Caledonia and BHP Billiton abandoned Ravensthorpe mine in Western Australia.
He said that MMG would like to expand its nickel interests but is unlikely to be a bidder against Minara and Chinese backed interests for the potential sale by BHP of the mothballed Ravensthorpe.
(Sourced from theage.com)
