| Exploring the nickel mining industry in | | | | expansion in both Finland and the United |
| Canada and China's needs and shortages for | | | | Kingdom accounted for most of the 48% (60,000 |
| stainless steel manufacturing. | | | | ton) increase in production, while expanded |
| As an exceptionally versatile | | | | production in Australia and New Caledonia |
| metal, nickel enjoys a special place in the | | | | accounted 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 and | | | | of the 22% increase in production in Asia |
| electrical conductivities, high resistance to | | | | during that same period. |
| corrosion and oxidation, excellent strength | | | | |
| and toughness at higher temperatures, ability | | | | The rising demand for nickel production, with |
| to be magnetized, and a melting point of | | | | its associated high commodity prices, has |
| 1453° C, nickel is not only attractive and | | | | spawned new approaches to nickel production. |
| durable in its own pure form; it also readily | | | | Historically, 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, where | | | | can approach $20 per ton, or even more. The |
| it is used by many countries in both pure and | | | | current lack of high grade nickel sulfide |
| alloy forms, and as bright and durable | | | | exploration 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 and | | | | and process methods that recover ore at |
| other metals in the production of stainless | | | | grades well below those that had |
| and heat-resistant steel used not only in | | | | traditionally been exploited. These new |
| industry and construction, but also for | | | | methods 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 range | | | | began in the 1960's with copper projects |
| of compositions to meet industry requirements | | | | going from smaller underground operations, |
| for corrosion and heat resistance, and also | | | | often with grades exceeding 2% to larger low |
| to facilitate a clean and hygienic surface | | | | grade projects withgrades that could be less |
| for food and other processing. About 65% of | | | | than 0.5%. By the 1970's the bulk mining of |
| nickel is used to manufacture stainless | | | | other low grade metals was advancing, most |
| steel. Around 20% is used in other steel and | | | | notably gold using new hydrometallurgical |
| non-ferrous alloys, often for specialized | | | | techniques at grades well below those that |
| industrial, aerospace and military | | | | had 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 nickel | | | | ore bodies have had grades of 1% to 2% Ni, |
| chemicals. As the emerging middle class in | | | | mined underground at relatively low |
| countries such as China and other Asian | | | | production rates and with high operating |
| nations demand more stainless steel products | | | | costs. Laterite nickel deposits can be bulk |
| from sinks to door handles, nickel | | | | mined, but the nickel can't be concentrated, |
| consumption is on the rise. Stainless steel | | | | so that both capital and operating costs are |
| currently accounts for about two-thirds of | | | | typically higher than sulfide projects. As a |
| nickel consumption up from one-third in the | | | | result major mining companies are not |
| past three decades. While nickel demand in | | | | necessarily looking for high grades, but |
| Europe and the Americas decreased in the | | | | rather for large tonnage potential that can |
| period from 1997-2002, this demand increased | | | | be 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% growth | | | | owned Turnagain Project located near Dease |
| reported in 2004. Chinese consumption during | | | | Lake, BC, Canada. Turnagain's nickel grades, |
| this decade has actually been the single | | | | low by traditional standards, show exciting |
| largest factor impacting the nickel market, | | | | potential if treated with newly developed |
| with supply struggling to keep pace with this | | | | process technology, and a bulk tonnage open |
| rising demand due to a physical shortage of | | | | pit mining approach. At Turnagain, early |
| the metal. In fact, China recently announced | | | | stage process studies carried out by several |
| a cut-back in stainless steel production | | | | independent and well recognized mineral |
| because they are unable to source enough | | | | industry testing laboratories suggest that |
| nickel. This rising demand and limited supply | | | | there are promising opportunities to recover |
| is pushing up prices. As of July 2006, nickel | | | | metal on site, at a high production rate, for |
| was trading at over $12.00US per pound in | | | | an excellent financial return on the |
| contrast to historical prices of less than | | | | necessary capital investment for equipment, |
| $5.00US over the previous 15 years. Experts | | | | steel, 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 economic | | | | In a Preliminary Assessment recently prepared |
| boom but also on the West's demand for | | | | by AMEC Americas Limited (AMEC), one of the |
| hygiene, will continue for the foreseeable | | | | top 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 primary | | | | is 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 copper | | | | pounds of nickel, 57 million pounds of cobalt |
| and nearly 800 million tons of steel. The | | | | and 85 million pounds of copper over the life |
| growing world economy through the | | | | of the mine, representing the largest new |
| mid-nineties triggered an expansionary drive | | | | nickel deposit in Canada. There are very few |
| in nickel capacity by existing manufacturers | | | | similar low-grade nickel projects in the |
| resulting in a production increase of 30%in | | | | world. |
| the five year period from 1993-1998. European | | | | |