JOHANNESBURG (miningweekly.com) – Australian nickel producer Western Areas on Wednesday reported that its nickel output could double to 20 000 t/y by 2010, as prices have started picking up again, pushing above $19 000/t.

Western Areas MD Julian Hanna told the 2009 Australian Nickel Conference that the company had achieved all its major targets in the past 12 months and was now poised to double its yearly output through its nickel mining interests in Western Australia.

“We are then looking from the end of next year to achieve sustained production at around 25 000 t/y, primarily though our Spotted Quoll and Flying Fox mines on the way to becoming Australia’s second largest and highest grade nickel producer,” Hanna said.

“Our objective is to reach this output performance while maintaining a cost target of between $2,00 and $2,50 a pound before smelting and refining.”

Hanna noted that this was achievable as Flying Fox was already emerging as one of the lowest cash cost nickel mines in Australia.

“Spotted Quoll, as our second flagship operation, can also contribute to that cash profile as it has a high-grade openpit where development commenced this week.”

On the sector’s future, Hanna said that the industry needed another world-class nickel sulphide discovery, as smelters globally were being increasingly supplied by mature mines facing higher costs.

“To put this in context, some 40% of global nickel sulphide production comes out of discoveries made as far back as 120 years ago. There have been worthwhile and useful smaller discoveries since but not on the scale necessary to sustain smelters in the long term.

“Laterites will be needed in the mix to meet market demand but will always face high capital costs to establish.”

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