August 3, 2009 / 5:46 AM / 11 years ago

UPDATE 1-Nickel price too volatile for mine restart-Mincor

* Mincor’s Miitel mine seen unlikely to restart in 2009 * Mine still profitable, but fears over nickel price volatility (Adds details, quotes)

By James Regan

KALGOORLIE, Australia, Aug 3 (Reuters) - Nickel prices remain too volatile to reactivate one of Australia’s largest nickel mines this year, owner Mincor Resources Ltd (MCR.AX) said on Monday.

Mincor idled its Miitel mine in west Australia in late December, halting production of between 4,000 and 5,000 tonnes of nickel per year indefinitely as world prices for the stainless steel alloying metal plummeted.

“It’s not in our plans to restart it this calendar year,” Mincor Managing Director David Moore said on the side of the Diggers and Dealers mining conference.

Mincor is one of several nickel miners to shutter operations in the face of uncertain commodities markets.

Nickel sells for around $18,300 a tonne, down from record highs above $51,000 a tonne two years ago, though above this year’s lows of less than $10,000.

Ore from the Miitel mine was being shipped to the Kalgoorlie nickel smelter owned by BHP Billiton (BHP.AX)BLT.L at the time of its closure.

BHP Billiton (BHP.AX) (BLT.L) in January closed its giant Ravensthorpe nickel mine, which was earmarked to yield 55,000 tonnes of nickel, saying it would cost more to produce each tonne than it could be sold for on the London Metal Exchange MNI3 In July, BHP retreated further from high-cost nickel operations, announcing the sale of its Yabulu nickel refinery in eastern Australia to a local mining magnate.

Moore said at current nickel prices, the Miitel mine could make money given the richness of its ore, though too many uncertainties surrounded the metal’s outlook.

“We could put it in production tomorrow and be making good money at these prices,” Moore said.

“It’s more the sustainability of the prices that I want to feel more comfortable about before I put it back into production,” he said. (Additional reporting by Joseph Chaney) (Editing by James Thornhill)

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