ALBIDON LIMITED EXPECTS ITS REACTIVATED MUNALI NICKEL MINE IN THE COUNTRY TO PRODUCE 50,000 TONNES OF NICKEL IN CONCENTRATE THIS YEAR

ALBIDON LIMITED EXPECTS ITS REACTIVATED MUNALI NICKEL MINE IN THE COUNTRY TO PRODUCE 50,000 TONNES OF NICKEL IN CONCENTRATE THIS YEAR, WHICH WILL BE SOLD AT PREVAILING SPOT PRICES TO CHINESE METALS REFINER JINCHUAN GROUP.

AT THAT LEVEL, THE MINE WOULD BE THE FIRST OF ITS SIZE TO RESUME OPERATIONS SINCE SEVERAL MINES FROM AUSTRALIA TO THE EUROPE WERE MOTHBALLED INDEFINITELY WHEN WORLD NICKEL PRICES DIVED IN 2008.

IT ALSO REPRESENTS THE EQUIVALENT OF NEARLY THE ENTIRE FORECAST 2011 GLOBAL NICKEL SUPPLY DEFICIT OF 60,000 TONNES FORECAST BY THE INTERNATIONAL NICKEL STUDY GROUP.

JINCHUAN IS NOW LOOKING TO HELP EXPAND PRODUCTION BEYOND 50,000 TONNES OVER THE NEXT SEVERAL YEARS, WITH A FOCUS ON AFRICA AND AUSTRALIA, ALBIDON CHIEF FINANCIAL OFFICER DAVID ROUND SAID.

JINCHUAN OWNS 49.9 PER CENT OF ALBIDON, WITH AN OPTION TO ACQUIRE UP TO 74 PER CENT AND PRODUCTION FROM THE ALBIDON MINE WAS HALTED IN MID-2008 AFTER A DRAMATIC FALL IN PRICES, LEAVING OPERATING COSTS HIGHER THAN WHAT ALBIDON COULD SELL ITS NICKEL FOR.

NICKEL PRICES DOUBLED BETWEEN APRIL 2009 AND APRIL 2010 AND HAVE REMAINED RELATIVELY STABLE EVER SINCE AT AROUND $US25, 000 TO $US26, 000 A TONNE.

AT THE TIME PRICES CRASHED, JINCHUAN, WHICH HOLDS INTERESTS IN OTHER AUSTRALIA-BASED NICKEL MINERS, INCLUDING WESTERN AREAS, PANORAMIC RESOURCES AN THE MMG DIVISION OF MIN-METALS RESOURCES, ONLY HELD ABOUT FOUR PER CENT OF ALBIDON.

JINCHUAN LIFTED ITS STAKE AFTER HELPING PAY OFF MONEY OWED TO BARCLAYS CAPITAL, RETAINING RIGHTS TO BUY 100 PER CENT OF MINE PRODUCTION IN CONCENTRATE FORM AT PREVAILING LONDON METAL EXCHANGE SPOT PRICES, ACCORDING TO ROUND.

THE MINE MANAGEMENT SAID IT HAD RECEIVED INDICATIONS FROM JINCHUAN THAT THE COMPANY HELD NO DESIGNS ON ACQUIRING ALBIDON OUTRIGHT, DESPITE HOLDING CONVERTIBLE NOTES, WHICH IF EXERCISED COULD DELIVER THE CHINESE FIRM A FURTHER 310 MILLION SHARES AND LIFT ITS STALE TO 74 PER CENT.

ANOTHER ZAMBIAN MINING COMPANY WITH AN AUSTRALIAN OWNER, EQUINOX MINERALS HAS BEEN THE SUBJECT OF TWO RECENT TAKEOVER ATTEMPTS. THE SECOND, BY MIN-METALS AND WORTH $US6.3 BILLION, REMAINS ACTIVE.

JINCHUAN HAS PLEDGED ITS SUPPORT FOR ALBIDON'S GROWTH STRATEGY AND TO MAINTAIN ITS CURRENT STAKE IN A MEETING WITH JINCHUAN'S CHAIRMAN IN HONG KONG IN MARCH.

CLOSE ON THE HEELS OF THE REACTIVATION OF THE MUNALI MINE, CANADA'S FIRST QUANTUM MINERALS IS SPENDING ABOUT $US190 MILLION TO BRING THE RAVENSTHORPE NICKEL MINE IN AUSTRALIA BACK INTO PRODUCTION BY MAY 2011 AT A RATE OF 39,000 TONNES,

ALSO, TWO NEW FERRO NICKEL OPERATIONS, VALE'S ONCA PUMA AND ANGLO-AMERICAN'S BARRO ALTO, BOTH IN BRAZIL ARE SCHEDULED TO START UP. BETWEEN THEM THEY WILL PRODUCE AROUND 90,000 TONNES PER YEAR OF CONTAINED NICKEL ONCE IN FULL PRODUCTION

published by augustine