Nickel Hits 11-month High, Enters Bull Market

Since January, when Indonesia went through with its plan to ban unprocessed ore exports, nickel prices have been on the rise due to concerns about the metal’s supply.

Now, another factor is exacerbating those supply concerns and pushing nickel prices up even further. Specifically, London Metal Exchange nickel for three-month delivery yesterday rose to $16,230 per metric ton (MT) after Europe and the United States imposed sanctions on Russia. That’s not only an 11-month high, but also a gain of more than 20 percent since January 9 — “the definition of a bull market,” as per The Wall Street Journal.

Opinions are divided on whether the metal’s good fortune will continue. The Wall Street Journal quotes Commerzbank (ETR:CBK) analysts as saying, “players on the nickel market still appear to assume that the Crimean crisis will escalate and that further-reaching sanctions will be imposed,” also noting that Daniel Belchers of Threadneedle Investments sees nickel rising as high as $18,000 to $20,000 per MT.

Some, however, are not so sure. Toronto-based analyst Donald Rumball, for instance, believes nickel’s current upswing likely won’t last long. He told CBC News, “[w]ell, the problem with sanctions is very porous. If Russia was stopped from selling nickel, what would stop it from selling to China and Indonesia and Vietnam and who else.”

Overall, the metal’s price has risen 16 percent in 2014, Bloomberg states. Investors, it seems, will have to wait and see if that upward trend continues.

Company news

Something of a mass exodus is taking place at Finland’s Talvivaara Mining Company (LSE:TALV), at least according to Reuters. The news outlet said earlier this month that last year, board member Michael Rawlinson and Chief Mining Officer Kari Vyhtinen left the company; now, word has surfaced that both COO Darin Cooper and board member Kirsi Sormunen are on their way out.

Over at BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT), a different kind of exodus is taking place. The Australian reported earlier this week that nickel’s price rise has prompted the company to “put out the feelers” regarding the sale of its $1-billion West Australian nickel business.

Don’t expect any action just yet, though. The West Australian notes that while BHP is said to have engaged Goldman Sachs (NYSE:GS) to gauge interest in the operations, the government has not yet been informed of BHP’s plan to sell. Further, “BHP has consistently refused to confirm or deny it has put Nickel West on the market.”

Junior company news

On March 4, Coastal Gold (TSXV:COD) entered into an agreement to sell Castillian Metais, its subsidiary, to Falcon Metais. Castillian holds a 100-percent interest in the Brazil-based Mangabal nickel-copper project.

Commenting on the sale, Dr. Bill Pearson, president and CEO of Coastal, said, “[t]he sale of the Mangabal Project is consistent with Coastal Gold’s stated strategy to sell its non-core assets and focus the Company’s resources on the development of the Hope Brook Project.”

Later in the month, on March 12, Nickel North Exploration (TSXV:NNX) received an initial NI 43-101 mineral resource estimate for the Hopes Advance, Gamma and Falco 7 deposits, all of which are located at the company’s Hawk Ridge copper-nickel-platinum-group metals project in Northern Quebec. Total in-pit inferred mineral resources at a $25-per-tonne net smelter return cut off are estimated at 19,636,000 tonnes at average grades of 0.577-percent copper, 0.215-percent nickel, 0.011-percent cobalt, 0.051 grams per tonne (g/t) platinum, 0.207 g/t palladium and 0.105 g/t gold.

Most recently, on Monday, TVI Pacific (TSX:TVI,OTCQX:TVIPF), along with TVI Resource Development, its Philippine operating affiliate, announced first nickel production from their pilot plant in Manila. Highlights include the production of a nickel hydroxide product filter cake grading 52- to 54-percent nickel.

Jake Foronda, vice president of operations at TVI Pacific, explained, “[t]he pilot tests confirm the viability of a two-stage atmospheric leach process in producing NHP containing about 50% Ni or a MHP containing some iron.”

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

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Long-awaited Indonesian Export Ban Sends Nickel Market Reeling

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