September 18, 2009 / 12:03 AM / 8 years ago

No start date in sight for Guatemala nickel mine

GUATEMALA CITY, Sept 17 (Reuters) - No start date has been set for the reopening of the Fenix nickel project in Guatemala, owned by HudBay Minerals, although economic conditions are improving, the company’s Guatemalan partner said on Thursday.

The project, which HudBay (HBM.TO) bought last year when it acquired Canadian miner Skye Resources, was suspended as nickel prices plummeted in the wake of the global financial crisis.

A spokesperson for Compania Guatemalteca de Niquel or CGN HudBay’s local partner, said a decision on restarting work at the mine in the eastern Guatemalan town of El Estor could be made later this year.

“We’re still in ‘slowdown’ but there are some positive signs, nickel prices have improved and the global economic crisis has started to get better,” Regina Rivera told Reuters.

The mine has a capital cost estimate of around $1 billion, which could change depending on how managers choose to power the plant.

CGN is currently carrying out a study to evaluate a number of options including forming an alliance with an existing local generator or investing in a hydro-electric plant, Rivera said.

The ferro-nickel mine on the banks of Guatemala’s largest lake was mothballed for more than two decades after nickel prices dropped in the early 1980‘s.

Skye Resources, which acquired the project in 2004, came up against local opposition to the reopening of the mine, with squatters occupying company land and burning down a hospital and community relations office built by Skye. (Reporting by Sarah Grainger; Editing by Christian Wiessner)

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