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