The Conversation (0)
Eramet is speeding up the opening of its Weda Bay nickel mine, which is expected to produce 30,000 tonnes of nickel per year.
Multinational miner Eramet (OTC Pink:ERMAY,EPA:ERA) announced that it will be accelerating the development of its Weda Bay nickel mine in Indonesia, with plans to open as early as H1 2020.
The project, which is a joint venture between Eramet and Tsingshan Holding Group, will produce nickel pig iron, with output estimated to come in at 30,000 tonnes per annum of nickel content. Of that amount, 13,000 tonnes will be offtake for Eramet.
Nickel has had a momentous year, with prices skyrocketing as buyers speculated over Indonesia’s nickel export ban, set to take effect in 2020. The ban, which will kick off in January, was created in a bid to maintain resources in the country.
According to experts at the International Nickel Study Group, Indonesia’s export ban will remove as much as 350,000 tonnes of nickel from global supply.
Christel Bories, chairman and CEO of Eramet, was hopeful on Wednesday (October 23) when commenting on the future of the company’s nickel operations.
“Despite the slowdown in the global economy, Q3 2019 was marked by highly favorable momentum in our nickel activities. (Our New Caledonia Societe Le Nickel project) generated positive cash flow in September, thanks to good progress in our rescue plan and to the rise in nickel prices,” he said.
The burgeoning electric vehicle (EV) market also factors into the hype around nickel. EVs have become a hot market, as more consumers move toward electrification in all aspects of their lives.
But, a Colin Hamilton, managing director of commodities research at BMO Capital Markets, told the Investing News Network previously, “for the battery raw materials, a lot of the hype has disappeared from the market at the present time. For nickel stainless steel demand, it still remains relatively strong.”
Following Wednesday’s announcement, Eramet’s share price saw a small rise, increasing from 46.76 euros at market close on Tuesday (October 22) to 48.59 euros on Wednesday.
On Tuesday, nickel was trading at US$16,015 per tonne on the London Stock Exchange.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Sasha Dhesi, hold no direct investment interest in any company mentioned in this article.
