October 21, 2008 / 11:58 AM / 9 years ago

UPDATE 1-FNX suspends contact nickel production at Levack mine

(Recasts; adds details)

Oct 21 (Reuters) - FNX Mining Co Inc FNX.TO suspended contact nickel production in its Levack complex, citing low commodity prices and high operating costs at its Levack nickel contact deposits, and cut its 2008 production outlook.

“The suspension of production being announced today is not expected to result in employee layoffs or a reduction in FNX’s Sudbury operation’s workforce,” the company said.

Affected employees will be relocated to other deposits in the Levack complex, it added in a statement.

Apart from nickel contact deposits, the company’s Levack complex consists of copper-nickel-precious metal deposits.

FNX Mining, which operates in Canada’s nickel rich Sudbury region, said mining from the Levack nickel deposits will continue in the fourth quarter to produce about 35,000 tonnes of “metallurgical test” production.

For 2008, FNX Mining expects to produce 1.3 million tons of ore yielding payable metal of about 13.5 million pounds of nickel, 38 million pounds of copper and 56,000 ounces of precious metals.

In March, the company forecast 2008 payable metal production for 15.5 million pound of nickel, 44.3 million pound of copper and 58,900 ounces of precious metal.

Shares of the company closed at C$6.80 Monday on the Toronto Stock Exchange. (Reporting by Arup Roychoudhury in Bangalore; Editing by Himani Sarkar) (arup.roychoudhury@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: arup.roychoudhury.reuters.com@reuters.net))

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