* Sirius says in supply talks with 3 buyers ahead of mine
* Managing director declines to name companies involved
* But says supply of quality concentrate would help BHP
By James Regan
SYDNEY, July 14 Australian miner Sirius
Resources NL is in late-stage negotiations with a trio
of major nickel smelters to supply up to 26,000 tonnes of nickel
concentrate annually, its managing director said.
Sirius stock has risen more than sixfold in the two years
since it discovered the high-purity Nova nickel deposit in west
Australia, partly on expectations the concentrate would command
a premium from smelting companies when output begins in late
Managing Director Mark Bennett said one of the companies
involved in negotiations would probably take all the material,
although he declined to name the firms involved.
However, he said that a steady supply of quality concentrate
could help BHP Billiton attract more buying interest
for the Nickel West division, which it is looking to sell.
"Nickel West's problem is it doesn't have enough supply of
high-quality feed for the smelter - something that Nova would
solve," Bennett said on Monday.
BHP, among a handful of major nickel miners and producers
worldwide, declined to comment on the issue. Those companies,
which also include Russia's Norilsk and Brazil's Vale
, control the lion's share of the 1.8
million-tonne-per-year global nickel market.
Sirius on Monday released findings of a study that showed
the Nova deposit could yield nickel at a cost of $2.09 per
pound, well below today's nickel price of $19,380 a tonne
, or $8.79 a pound, providing robust profit margins.
Nickel prices have risen 40 percent this year, boosted by
demand from stainless steel manufacturers and changes in
Indonesian mining laws that have cut off a major supply source
for Chinese steel mills.
Bennett added that smelting costs for Nova nickel would be
lower as it contains less unwanted magnesium.
He said the mine would cost about A$473 million ($444
million) to build.
($1 = 1.0645 Australian Dollars)
(Editing by Joseph Radford)