Australia's Mincor slashes nickel output amid prices near 6-yr lows

Tue Jul 28, 2015 11:21pm EDT
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By James Regan

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.   Continued...