In July Teck Resources (NYSE:TCK) sold its Araguaia nickel mine in Brazil to Horizonte in return for a 50 percent stake in the company. Now Horizonte is preparing a share sale in Toronto to raise capital to fund the project.
Other financing options include offtake agreements with nickel refiners and bank financing.
The Araguaia project has an initial resource of 60 to 70 million tons, and should produce a minimum annual volume of about 25,000 tons.
Nickel demand has shot up recently, with supply not being able to meet demand for the first time in five months, according to the International Nickel Study Group. The mine should be ready to produce in about 4 years. Drilling began on October 18.
Official numbers concerning actual resources will be determined in 2011, where at that time production costs and more accurate volumes will be known.
Once Horizonte has Araguaia ready for construction, Teck has an option to acquire the remaining shares in the company.
Showing posts with label Nickel Demand. Show all posts
Showing posts with label Nickel Demand. Show all posts
Monday, October 25, 2010
Wednesday, July 14, 2010
Nickel Prices Could Soar on Strong Demand, Low Supply
Prices for nickel could explode this year as demand may exceed supply by up to 40,000 metric tons in 2010, according to Sumitomo Metal Mining Co. of Japan.
Sumitomo's estimate is based, as with most other raw materials, on the demand from China, which is anything but certain at this time, especially with their efforts to cool their hot, urban property markets, which would have an impact on nickel demand.
Nickel is important in housing because about two-thirds of it is used as an anti-corrosion element in making stainless steel, which is used heavily in buildings and homes.
The question is how much demand from China falls, and how that differs in relationship to supply issues. Sumitomo believes the supply won't be able to keep up with demand, and that could raise the price of nickel substantially.
Supply disruptions in Canada have been another factor, but strike by workers in Canada is over against Vale SA, and that should ramp up supply, but it's questionable as to how much for the remainder of the year.
Toru Higo, general manager of the company’s nickel sales, noted China demand could surge by as much as 18.6 percent to about 510,000 tons.
Sumitomo's estimate is based, as with most other raw materials, on the demand from China, which is anything but certain at this time, especially with their efforts to cool their hot, urban property markets, which would have an impact on nickel demand.
Nickel is important in housing because about two-thirds of it is used as an anti-corrosion element in making stainless steel, which is used heavily in buildings and homes.
The question is how much demand from China falls, and how that differs in relationship to supply issues. Sumitomo believes the supply won't be able to keep up with demand, and that could raise the price of nickel substantially.
Supply disruptions in Canada have been another factor, but strike by workers in Canada is over against Vale SA, and that should ramp up supply, but it's questionable as to how much for the remainder of the year.
Toru Higo, general manager of the company’s nickel sales, noted China demand could surge by as much as 18.6 percent to about 510,000 tons.
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