News

December 01, 2008

European Nickel Keeps Its Options Open On Projects, And On Financing

By Alastair Ford

Last week Rusina Mining broke a fairly lengthy silence by releasing an announcement on progress at its Acoje nickel project in the Philippines. Rusina, to be fair, has had plenty of reason to keep quiet, given that the precipitous decline in the nickel price has completely wiped out the viability of its original offering - the direct shipping of ore to China. With all its attendant additional costs in terms of weight and bulk, and all the advantages for the miner in terms of minimal processing, the direct shipping of ore only makes sense with high metals prices. And there’s no doubt that on the downward trajectory we are some way past the breakeven price for direct shipping ore. This autumn, George Bujtor from Toledo Metals, put breakeven for direct shipping ore at US$16,000 per tonne, but then that’s easy for him to say – he’s got an off-take agreement with BHP Billiton’s Yabulu refinery in Queensland, at confidential, but probably more advantageous rates than anybody else is getting at the moment. Rusina has no such arrangement, but it does have something in common with Toledo: a joint venture with European Nickel.

And so it was that on the same day that Rusina issued its update on Acoje, European Nickel issued its own update on Acoje. You can tell by comparing these two announcements on what is essentially the same bit of news, that European Nickel, for all its own woes, is a little bit more used to talking to market that Rusina. Five terse paragraphs issue out of the European Nickel stable, most relating to the processing of the ore, which is after all European Nickel’s side of the house. But a full...