By Jason Scott
Dec. 10 (Bloomberg) -- Mincor Resources NL, Australia’s fourth-largest nickel producer, said it will probably post a first-half loss and will suspend mining operations at its Miitel project from Christmas after metal prices plunged.
“Miitel’s closure is only temporary, and it will certainly get back into production,” Managing Director David Moore said in a phone interview today. “The timeframe for that is not certain but it should be within three to six months, depending on the nickel price.”
Nickel prices have plunged 64 percent this year as the global recession cut demand for industrial metals and steel. OAO GMK Norilsk Nickel, the world’s largest producer of the metal, halted operations at its Cawse mine in Australia in October.
Mincor is “unlikely” to post a profit for the six months ending Dec. 31 because of the nickel price, it said today in a presentation sent to the Australian stock exchange. The Perth- based company kept its output forecast for the 12 months ending June 30 at 16,000 to 19,000 metric tons of nickel.
Mincor, down 86 percent this year, rose 3.5 percent to 59 Australian cents at 2:53 p.m. in Sydney trading.
The closure of Miitel in Western Australia state will affect about 100 workers, Moore said. Mincor has already sacked 15 workers from the site. Contractor Barminco Ltd., which employs the remainder, declined to immediately comment.
“We’ve got three mines remaining in full production, Carnilya Hill, Mariners and Otter Juan,” Moore said. “Nickel is a volatile market. In the medium term, beyond six months, the outlook is very positive indeed.”
Nickel shipments from Australia, the world’s fourth-biggest exporter, slumped 37 percent in the September quarter as demand and prices plunged.
To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net
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