UPDATE 2-Sherritt CEO expects rebound in nickel market over next year

Wed Oct 29, 2014 11:44am EDT
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(Adds details from interview, graphic)

By Narottam Medhora

Oct 29 (Reuters) - There will be a rise in demand for nickel over the next year as a sustained period of excess supply ends due, in part, to Indonesia's ore export ban, the chief executive of Canadian miner Sherritt International Corp told Reuters.

The comments come after Sherritt reported a quarterly loss, partly due to depreciation charges at its Ambatovy nickel mine in Madagascar, lowered its full-year production forecast for the mine and said it would cut about 10 percent of its workforce.

The project, in which Sherritt holds a 40 percent stake, has been plagued by unplanned outages and mechanical problems, weighing on the results of the miner. Sherritt's debt has also ballooned due to higher operating costs.

Sherritt's problems at the mine, which achieved commercial production in January, coincide with a plunge in nickel prices, down about 25 percent since May, as excess global supply coincided with a slowdown in demand from China.

But CEO David Pathe expects the market to change over the next year, helped by a sustained ban on ore exports from the world's top nickel supplier, Indonesia.

"We think there is quite a compelling case to be made that the nickel market is going to move over the course of next year, from a period of several years of sustained surpluses of supply to potentially a period of years of supply deficit," Pathe said.

"The Indonesian government reiterated its commitment to the ore ban just a couple of weeks ago at a nickel conference in Jakarta."   Continued...