(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."
Sherritt's shares were up 4.5 percent at C$2.82 in late morning trading.
Sherritt said it would continue restructuring its debt after such efforts led to total loans and borrowings falling 11 percent to C$2.21 billion ($1.98 billion) in the nine months ended Sept. 30. Its cash and short-term investments rose by half to C$980.3 million in the same period.
As part of its efforts to lower costs, Sherritt said on Wednesday it would cut 10 percent of its salaried employees, excluding those in Ambatovy.
Still, the outages and problems at the Ambatovy mine led the company to cut its full-year production forecast for the project to 37,000 to 41,000 tonnes of finished nickel from 40,000 to 45,000 tonnes.
Sherritt posted a loss of C$51.3 million in the third quarter due to a higher tax bill and its C$41 million-share of depreciation charges at the mine. It earned C$1.1 million a year earlier.
Adjusted revenue rose 55 percent to C$302.7 million.
A rise in the company's average realized prices for nickel and cobalt partly helped its adjusted earnings before interest, tax, depreciation and amortization jump 54 percent.
Up to Tuesday's close, Sherritt's shares had fallen over 25 percent this year, steeper than the 11 percent fall in the S&P/TSX capped diversified metals and mining index. ($1 = C$1.1148) (Additionals reporting by Ashutosh Pandey in Bangalore; Editing by Savio D'Souza)