06/11/2008 - 10:43

Dragon cuts activities at nickel mine

06/11/2008 - 10:43

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Dragon Mining has become the latest victim of falling commodity prices, with the Perth-based company announcing it has suspended activities at its nickel mine in Finland.

Dragon cuts activities at nickel mine

Dragon Mining has become the latest victim of falling commodity prices, with the Perth-based company announcing it has suspended activities at its nickel mine in Finland.

The company was in the process of dewatering its Vammala mine, however that has been postponed until at least May next year.

Dragon said the suspension was a result "of the significant fall in nickel prices and the pessimistic near term projections for nickel demand".

The spot price of nickel on the London Metal Exchange fell 4.7 per cent overnight to $US12,128 per tonne. In May this year, the metal was trading at around $US25,000/t.

The company was looking to assess the condition of the underground tunnel to determine the practicability of re-opening the mine to access the remaining ore and to explore for additional resources.

"All installed equipment including pumps, sumps and pipelines will be maintained in position for a rapid re-commencement of de-watering should the outlook for nickel improve," Dragon said in a statement.

The company added that the review of historical nickel data from the mine will continue.

Vammala was operated by Outokumpu Oy between 1975 and 1995, producing 39,460 tonnes of nickel and 24,710t of copper.

Dragon is currently mining gold at its Orivesi mine, with ore processed at the Vammala process plant.

Shares in Dragon were unchanged at 2.5 cents at 12:48 AEDT.

Dragon follows in the footsteps of Poseidon Nickel, which last month suspended mining activities at its Mt Windarra underground mine in the Goldfields.

The historic mine, which sparked the Poseidon bubble of the early 1970s, was undergoing refurbishment at the time.

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