A world made of metal


Nickel stocks

Exploring the nickel mining industry inexpansion in both Finland and the United
Canada and China's needs and shortages forKingdom accounted for most of the 48% (60,000
stainless steel manufacturing.ton) increase in production, while expanded
As an exceptionally versatileproduction in Australia and New Caledonia
metal, nickel enjoys a special place in theaccounted for all of the 39% (35,000 ton)
industrial world. With its lustrous,increase in Oceania. Japan accounted for most
silvery-white appearance, low thermal andof the 22% increase in production in Asia
electrical conductivities, high resistance toduring  that  same  period.
corrosion and oxidation, excellent strength
and toughness at higher temperatures, abilityThe rising demand for nickel production, with
to be magnetized, and a melting point ofits associated high commodity prices, has
1453° C, nickel is not only attractive andspawned new approaches to nickel production.
durable in its own pure form; it also readilyHistorically, most sulfide nickel ore bodies
alloys  with  many  other  metals.are mined underground at relatively low
production rates and with mining costs that
Nickel is readily recognized in coins, wherecan approach $20 per ton, or even more. The
it is used by many countries in both pure andcurrent lack of high grade nickel sulfide
alloy forms, and as bright and durableexploration targets has more recently shifted
electrolytically-applied "nickel plating"attention to laterite nickel deposits, which
coatings on steel. Its primary use, however,can be mined at low cost using modern mining
is as an alloying component with chromium andand process methods that recover ore at
other metals in the production of stainlessgrades well below those that had
and heat-resistant steel used not only intraditionally been exploited. These new
industry and construction, but also formethods are changing the way large mining
household products such as pots and pans,companies and knowledgeable investors are
kitchen sinks, and other everyday items.looking at mineral properties. The trend
Stainless steel is produced in a wide rangebegan in the 1960's with copper projects
of compositions to meet industry requirementsgoing from smaller underground operations,
for corrosion and heat resistance, and alsooften with grades exceeding 2% to larger low
to facilitate a clean and hygienic surfacegrade projects withgrades that could be less
for food and other processing. About 65% ofthan 0.5%. By the 1970's the bulk mining of
nickel is used to manufacture stainlessother low grade metals was advancing, most
steel. Around 20% is used in other steel andnotably gold using new hydrometallurgical
non-ferrous alloys, often for specializedtechniques at grades well below those that
industrial, aerospace and militaryhad traditionally been exploited. It may now
applications. About 9% is used in plating,be nickel's turn to benefit from this
while 6% in used in other applications,approach. Historically most sulfide nickel
including coins and a variety of nickelore bodies have had grades of 1% to 2% Ni,
chemicals. As the emerging middle class inmined underground at relatively low
countries such as China and other Asianproduction rates and with high operating
nations demand more stainless steel productscosts. Laterite nickel deposits can be bulk
from sinks to door handles, nickelmined, but the nickel can't be concentrated,
consumption is on the rise. Stainless steelso that both capital and operating costs are
currently accounts for about two-thirds oftypically higher than sulfide projects. As a
nickel consumption up from one-third in theresult major mining companies are not
past three decades. While nickel demand innecessarily looking for high grades, but
Europe and the Americas decreased in therather for large tonnage potential that can
period from 1997-2002, this demand increasedbe shown to be economically attractive. One
in Asia and the former East Bloc countries.example of low grade sulphide nickel deposits
Chinese nickel consumption increased by 15.4%is Hard Creek Nickel Corporation's (HNC) 100%
in 2005, slightly less than the 19.1% growthowned Turnagain Project located near Dease
reported in 2004. Chinese consumption duringLake, BC, Canada. Turnagain's nickel grades,
this decade has actually been the singlelow by traditional standards, show exciting
largest factor impacting the nickel market,potential if treated with newly developed
with supply struggling to keep pace with thisprocess technology, and a bulk tonnage open
rising demand due to a physical shortage ofpit mining approach. At Turnagain, early
the metal. In fact, China recently announcedstage process studies carried out by several
a cut-back in stainless steel productionindependent and well recognized mineral
because they are unable to source enoughindustry testing laboratories suggest that
nickel. This rising demand and limited supplythere are promising opportunities to recover
is pushing up prices. As of July 2006, nickelmetal on site, at a high production rate, for
was trading at over $12.00US per pound inan excellent financial return on the
contrast to historical prices of less thannecessary capital investment for equipment,
$5.00US over the previous 15 years. Expertssteel, cement, energy, labor and other costs,
predict that this continued high demand -while nickel is priced at historical levels.
based not only on China's continuing economicIn a Preliminary Assessment recently prepared
boom but also on the West's demand forby AMEC Americas Limited (AMEC), one of the
hygiene, will continue for the foreseeabletop three international mine engineering
future.design firms, a 50,000 tonne per day milling
operation by Hard Creek Nickel at Turnagain
Only about 1.3 million tons of new or primaryis modeled with a 17 year mine life that is
nickel are produced and consumed annually,predicted to produce a total of 833 million
compared with over 15 million tons of copperpounds of nickel, 57 million pounds of cobalt
and nearly 800 million tons of steel. Theand 85 million pounds of copper over the life
growing world economy through theof the mine, representing the largest new
mid-nineties triggered an expansionary drivenickel deposit in Canada. There are very few
in nickel capacity by existing manufacturerssimilar low-grade nickel projects in the
resulting in a production increase of 30%inworld.
the five year period from 1993-1998. European



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