Nickel mining giant Western Areas WL has announced that it will complete its shipment contract with China’s Jinchuan Group months ahead of schedule.

 

Thanks to continuing high levels of nickel production in its flagship Forrestania Nickel Project, the offtake contract to sell a total of 25,000 tonnes of nickel in concentrate to Jinchuan is expected to be completed by February 2012, 19 months after the first shipment to China. Under the current terms, Western Areas and Jinchuan will meet six months before the end of the contract, however Western Areas has no obligation to extend the contract.

 

Western Areas’ Board is now considering a range of options including calling for tenders for the next tranche of concentrate from Forrestania. This is in response to strong interest being shown by a number of major offshore nickel producers and other companies.

 

In addition to the contract to sell 25,000 tonnes of nickel in concentrate to Jinchuan, Western Areas has contracts to sell up to 12,000 tonnes pa nickel in concentrate to BHP Billiton.

 

Managing Director, Mr Julian Hanna said, “Western Areas produces a high quality product sought after by nickel smelters. Our business model is to sell this to a range of customers both domestically and offshore. The early expiry of the Jinchuan contract provides an opportunity to improve already favourable offtake terms and potentially find a suitable partner for some of our other exploration and development projects in Australia and Finland.”