Australia billionaire spends big on nickel even as glut worries persist
* Billionaire Clive Palmer earmarks $1 bln to upgrade nickel refinery
* Wants to improve margins to battle plummeting prices
* Xstrata, Vale, others soldier on with big projects
* Extra output could deepen supply glut
By James Regan
SYDNEY, May 3 (Reuters) - Australian mining magnate Clive Palmer is joining Vale, Xstrata and other sector heavyweights pouring money into nickel despite a dire near-term outlook for demand, as they plough on with projects bought on the cheap or as part of corporate takeovers.
Hopeful that appetite will pick up as the global economy improves, they are reluctant to shed assets after investing billions. But that risks deepening a supply glut in the short term and piling more pressure on nickel prices, which have fallen around 13 percent so far this year and were the worst performer on the London Metal Exchange in 2012.
Palmer, a self-described eccentric who is building a replica of the Titanic, plans to spend a hefty $1 billion this year upgrading an ageing nickel refinery in Australia, battling to reduce production costs through steps such as revamping equipment and waste disposal operations.
"The $1 billion ... will help make the refinery more efficient in a time of low nickel prices," said Andrew Crook, a business adviser to Palmer. He declined to give details on operating costs as the Yabulu plant is privately owned. Continued...