Mincor nears target as nickel output rises

SYDNEY, July 18 (Reuters) - Mincor Resources NL (MCR.AX), Australia's third-largest nickel miner, reported a 28 percent jump in annual nickel production in fiscal 2008, taking it closer to its target of 20,000 tonnes a year.

That target is about 8,000 tonnes higher than the annual output of the nearby former Jubilee mining company, which was bought by Swiss-based Xstrata (XTA.L) for about $2.8 billion.

Mincor, which is racing to find new lodes, was running eight exploration drilling rigs in the nickel-rich Kambalda region of west Australia and had recently started production from its eighth mine.

In the year ended June 30, 2008, Mincor said its mines produced 18,900 tonnes of nickel in ore, or just over 16,500 tonnes of nickel in concentrate, a 28 percent increase over the previous year.

Mincor stock was 7 percent higher at A$2.16 at 0129 GMT, bucking a modest decline in the S&P/ASX200 .AXJO index.

Mincor is one of a handful of miners working the Kambalda veins, the largest being BHP Billiton Ltd/Plc (BHP.AX)(BLT.L) which will report its year-end production figures on July 23.

Australia's No. 2 nickel miner, Minara Resources Ltd (MRE.AX), expects to yield 31,000 to 35,000 tonnes this year.

Nickel, used in stainless steel making, sells for around $20,600 a tonne in the London Metal Exchange three-month futures market MNI3. The price has been as high as $34,700 a tonne this year. ($1=A$1.03) (Reporting by James Regan)