February 13, 2017 / 6:56 AM / 3 years ago

UPDATE 1-Australia's Ravensthorpe nickel mine cut off by rains -First Quantum

* Ravensthorpe nickel mine cut off

* Rains inundate Western Australia

* Processing is ongoing -First Quantum (Adds more company comment, details, price forecast)

By James Regan

SYDNEY, Feb 13 (Reuters) - Heavy rains have cut access in and out of the Ravensthorpe nickel-producing operations in Western Australia, owner First Quantum Minerals said on Monday.

The processing of nickel ore into metal was continuing at the site, 250 km from the Port of Esperance on the Indian Ocean, the company said in a statement emailed to Reuters.

“There is currently no access into or out of First Quantum Minerals’ Ravensthorpe nickel operations,” First Quantum said. “At this stage we will not declare force majeure but we reserve the right to.”

A protracted delay in shipments would aggravate already tight global supply. Nickel prices are up by 15 percent since late January, following a Philippine government decree that closed more than half the mines there over environmental concerns.

Ravensthorpe was earlier expected to produce 25,000 tonnes of nickel in 2017, according to First Quantum’s website.

Global demand for nickel - used to toughen stainless steel - stands at around 2 million tonnes per year, according to the Lisbon-based International Nickel Study Group.

Capital Economics in London in a recent note predicted nickel prices would climb to $11,500 a tonne by the end of the year versus just under $10,000 in early January.

Most of Western Australia state has been belted with heavy rains, with Ravensthorpe one of the hardest hit areas.

Up to 126 mm of rain fell in areas around the mine, according to the weather bureau.

Nickel on the London Metal Exchange was up about 0.7 percent on Monday at $10,740 a tonne, after having gained about 3.7 percent on Friday.

Reporting by James Regan; Editing by Richard Pullin and Tom Hogue

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