2 Min Read
SYDNEY, July 29 (Reuters) - Australian nickel miner Mincor Resources said on Wednesday it will reduce production by up to 56 percent over the six months to end-December due to persistent low nickel prices that have left its operating levels unsustainable.
"While near and medium term nickel price forecasts remain positive, it is clear that Mincor's mining operations cannot be sustained at spot prices without substantial changes," the company said in a statement.
Mincor shares fell as much as 11 percent on the Australian Securities Exchange to their lowest since Aug. 8, 2013.
The company also unveiled a April-June quarter operating loss of A$1.51 million ($1.11 million) versus an A$1.30 million surplus the previous quarter.
This week, London Metal Exchange three-month nickel traded at around $11,350 a tonne, not far above a six-year low hit on July 8.
Other nickel miners have also been rethinking output amid the weak pricing.
Canada's Sherritt International Corp on Tuesday reduced its 2015 nickel production target to 78,000-82,000 tonnes, down from a previous estimate of 80,000-86,000 tonnes.
Nickel miners had hoped that an Indonesian ban on exports of nickel ore would lead to a rise in demand in China for the steel-making alloy from other parts of the world, but Philippine suppliers appear to have taken up the shortfall.
Macquarie Bank has slashed its nickel price outlook, cutting it by 13 percent for 2015 after similar moves by other investment banks such as Morgan Stanley, Citi, ANZ and JP Morgan.
Macquarie, however, expects prices to recover later this year - a view echoed by UBS - as demand from Chinese mills picks up.
Mincor will reduce output to between 2,000 and 3,000 tonnes of nickel-in-ore in the first half of fiscal 2015, which ends on Dec. 31, though output could be ramped up rapidly to higher levels if market conditions improve, it said.
Production in the same period of fiscal 2014 was 4,599 tonnes of nickel in ore.
$1 = 1.3626 Australian dollars Editing by Tom Hogue