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Opinion divided over nickel conference

IF YOU believe many of the 220 delegates who attended the ALTA Nickel/Cobalt 2000 conference, the event was a roaring success.

Nickel and copper extractants, pressure acid leaching within downstream processing, product recovery, economics and industry dynamics are not everyone’s cup of tea.

Yet the conference and trade exhibition attracted heavyweights from around the world who flew in like magpies heading for a good feed.

Mines Minister Norman Moore was on his soapbox beating the nickel drums. Judging by the low media response, the reverberations didn’t go down too well.

David Russell was there too, doing his bit for Argosy. David is a white-haired, fiercely focused analyst. He makes the intelligentsia of resource analysts look like wimps.

The one dark cloud on the nickel horizon was the forecast by the former Platinum Group Metals analyst that cobalt was going to have a bumpy price ride, all downhill.

However, ALTA Metallurgical Services managing director Alan Taylor thought pressure acid leaching operations had entered a new era – a ramp-up phase.

The keynote address by Inco Limited, Canada vice-president, engineering and technology Dr Gordon ‘Gord’ Bacon, who postulated a positive long-term outlook for nickel, made people sit up and take notice.

Dr Bacon is to nickel what Albert Einstein is the theory of relativity. Some even believe he invented the metallic element.

Producers were thrilled to hear that nickel demand has grown at an historic average annual rate of around 4 per cent and is expected to remain at that rate. You can understand the sensitivity when you consider that investment capital can run into billions.

“This strength has been driven primarily by growing demand for nickel in stainless steel, whose production accounts for about two-thirds of primary nickel demand,” Dr Bacon said.

“Stainless steel is expected to remain a growth product, especially in the developing nations that will require significant volumes for infrastructure development.

“Nickel uses outside stainless steel will also be favourable, especially in nickel alloys used in the aerospace sector and for batteries in electronics and hybrid automobiles.”

His prognosis is that the world economy is in a period of recovery and existing operations are producing close to maximum capacity.

With new laterite projects experiencing ramp-up problems, limited prospects of new capacity in the next two to three years and Russian production stable, the possibility of the market remaining tight for the next two years is high.

This will have consequences for the short-term nickel price.

“In the longer term, the nickel price will have to remain in the range US$2.75 to US$4.00 per pound to satisfy the supply-demand situation and thus justify development of new operations,” Dr Bacon said.

“lnco still believes that a US$3/lb ($6,600/tonne) long term price is appropriate for financial evaluation of projects.

“All in all, the near future, and the ten year outlook, is generally positive for nickel,” he said.

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