RPT-UPDATE 1-Talvivaara CEO sees nickel price pickup in H2 2010

(Repeats to widen distribution)

* Says nickel prices likely to fall this year

* Q2 oper loss widens to 10.1 mln eur

* Sees annual nickel production at 50,000 tonnes from 2012

* Shares up 0.9 pct

HELSINKI, Aug 27 (Reuters) - Nickel prices are likely to fall this year, but could pick up in the second half of 2010 as government stimulus efforts rekindle demand, the chief executive of Finnish miner Talvivaara (TALV.L) said on Thursday. The company reported a wider second-quarter operating loss, as technical problems reduced its crushing capacity, but said repair work was on schedule and the unit should be running in September.

"In this quarter and until the end of the year, I would not be surprised if (nickel) prices would drop a bit ... in the shorter term it is quite likely prices will decline," CEO Pekka Pera told Reuters.

"No signs are yet visible that demand among end users is rising ... but everything indicates to that none of the long term fundamentals have changed," Pera said, adding he saw demand and prices picking up in the second half of 2010, boosted by governments stimulus packages.

Talvivaara reported an April-June operating loss of 10.1 million euros ($14.4 million), widening from 3.2 million in the same quarter last year.

The firm repeated its nickel production target of around 30,000 tonnes for 2010 and raised its annual target from 2012 onwards, but did not give a full-year forecast.

"We have decided to accelerate our growth by increasing production capacity by almost 50 percent to up to 50,000 tonnes of nickel per annum from 2012," the company said.

Talvivaara shares at the London bourse were up 0.9 percent at 405 pence by 0848 GMT.

(Reporting by Eva Lamppu; Editing by Erica Billingham)