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F I E L DPUBLIC RELATIONS
Media ReleaseThursday 4 October, 2012
NICKEL MARKET IS NEAR BOTTOM AND UPSWING PENDING
AUSTRALIAS THIRD LARGEST PRODUCER
The market bottom for nickel has most likely been reached with
an upswing pending, accordingto Australias third largest nickel
producer.
Speaking in Perth today on the first day of the 2012 Paydirt
Austral ian Nickel Conference,
Western Areas NLs Managing Director Mr Daniel Lougher, said that
while the base metalscurrent price made it uneconomic for many
mines, it simultaneously was choking any newsupply potential and
that would drive the upswing,
The more positive price outlook was also enhanced by the pending
limited sources of goodquality nickel future supply for smelters,
as there was now emerging margin compression onnickel pig iron, a
poorer nickel substitute relied on by some smelters.
In addition, the huge lateritenickel projects continue to be
serial underperformers with capexblowouts, failure to meet
production targets and high energy demands.
Indonesia also recently added to the changing market outlook,
imposing nickel ore export
bans and tax hikes.
There had also been no major new discoveries in conventional
nickel sulphide, with maturingnickel camps still servicing 45% of
global nickel production.
Mr Lougher said most analysts were tipping the pickup over the
next three to six months whichwould coincide with pickup in
seasonal demand.
Western Areas produces around 31,000 tonnes of nickel mined and
25,000 tonnes of nickel inconcentrate, ranking it the countrys
third largest producer behind BHP-B Nickel West andGlencore.
Its operations are heavily centred around the long Wiluna to
Ravensthorpe corridor of WesternAustralia but has expanding
operations in Canada and Finlandthe latter the subject of apossible
listing on AIM dependent, Mr Lougher says, on market
conditions.
What the market needs to recognise more fully is that nickel is
a very cyclical commodity, MrLougher said.
In the past 12 years, Western Areas has had to deal with nickel
prices ranging from US$3.00 apound to US$23.00/lb, he said.
Yet throughout these cycles, we have still managed to raise $300
million in development
capital, commission two mines, grow resources, reserves and
production and construct thenexpand our nickel concentrator
