Western Areas Snubs BHP with Jinchuan Nickel Deal

Reuters reported that Western Areas Ltd. (ASX:WSA) has come to a two-year agreement to supply China’s Jinchuan Group Ltd. with 26,000 tonnes of nickel concentrate.

That’s a blow for BHP Billiton Ltd. (ASX:BHP,NYSE:BHP,LSE:BLT), whose Nickel West smelter could have used the material.

As quoted in the market news:

The agreement narrows the number of supply sources available to BHP as it strives to run the 42-year-old Nickel West smelter at its maximum capacity of just over 100,000 tonnes per year.

BHP has been redoubling efforts to secure supplies for the smelter after failing to find a buyer for Nickel West.

BHP buys 12,000 tonnes of nickel a year in concentrate from Western Areas under a contract running until 2017, and it was seen as a logical contender for the additional supply.

Click here to read the full Reuters report.