* Australian nickel mine shut during financial crisis could
* Minmetals says open to potential buyers
* Nickel price more than double from when mine was
mothballed but slipping
(Adds details, quotes, nickel price data)
By James Regan
SYDNEY, June 23 China's Minmetals has
received interest from outside parties to operate its mothballed
Avebury nickel mine in Australia, MMG, the company's Australian
subsidiary, said on Thursday.
The mine was shut down at the height of the global financial
crisis due to low world nickel prices, which fell below $10,000
a tonne, less than half the current price.
"In recent months MMG has received interest from other
potential partners and operators with a stated interest in the
mine," MMG said in a statement.
"As a result, MMG will conduct a formal expression of
interest process for participation in, or potential sale of,
Avebury," it said.
Mining companies, including Vale , Xstrata
, AngloAmerican and Sherritt International
have been racing to construct new mines mostly to feed demand
for nickel to make stainless steel, hoping prices will continue
to strengthen in step with projected consumption growth.
But this year's expected supply deficit of around 30,000
tonnes -- against consumption of 1.59 million tonnes, could
reverse into a 25,000-tonnes surplus in 2012 building to an
80,000-tonne surplus in 2013, according to forecasts by BNP
Nickel prices peaked at just under $29,500 a tonne in late
February and have largely been on a downslope since. LME
three-month nickel currently trades for around $22,000 a
The Avebury mine, on the island of Tasmania, was slated to
yield 8,500 tonnes of nickel a year -- in a world market of
around 1.3 million tonnes -- all going to Chinese refiner
Jinchuan Group under an exclusive supply pact before being shut.
Co-production of large volumes of arsenic in the mining stage
of the nickel has also presented challenges for the operation in
MMG said it will consider "all proposals to develop or
acquire Avebury and believes this will increase the likelihood
and accelerate the timing of the mine being re-commissioned in
Another nickel mine shut in Australia due to low prices is
scheduled to resume production.
First Quantum Minerals is in the final stages of
rehabilitating a nickel mining operation in Ravensthorpe,
Australia, which it bought from BHP Billiton in
At full speed, the company expects the mine to yield around
39,000 tonnes of nickel a year.
(Editing by Ed Davies)