Nickel stocks

Exploring the nickel mining industry in Canada andand the United Kingdom accounted for most of the
China's needs and shortages for stainless steel48% (60,000 ton) increase in production, while
manufacturing. As an exceptionally versatile metal,expanded production in Australia and New Caledonia
nickel enjoys a special place in the industrial world.accounted for all of the 39% (35,000 ton) increase in
With its lustrous, silvery-white appearance, lowOceania. Japan accounted for most of the 22%
thermal and electrical conductivities, high resistance toincrease in production in Asia during that same period.
corrosion and oxidation, excellent strength andThe rising demand for nickel production, with its
toughness at higher temperatures, ability to beassociated high commodity prices, has spawned new
magnetized, and a melting point of 1453° C,approaches to nickel production. Historically, most
nickel is not only attractive and durable in its ownsulfide nickel ore bodies are mined underground at
pure form; it also readily alloys with many otherrelatively low production rates and with mining costs
metals.that can approach $20 per ton, or even more. The
Nickel is readily recognized in coins, where it is usedcurrent lack of high grade nickel sulfide exploration
by many countries in both pure and alloy forms, andtargets has more recently shifted attention to laterite
as bright and durable electrolytically-applied "nickelnickel deposits, which can be mined at low cost using
plating" coatings on steel. Its primary use, however, ismodern mining and process methods that recover
as an alloying component with chromium and otherore at grades well below those that had traditionally
metals in the production of stainless andbeen exploited. These new methods are changing the
heat-resistant steel used not only in industry andway large mining companies and knowledgeable
construction, but also for household products such asinvestors are looking at mineral properties. The trend
pots and pans, kitchen sinks, and other everydaybegan in the 1960's with copper projects going from
items. Stainless steel is produced in a wide range ofsmaller underground operations, often with grades
compositions to meet industry requirements forexceeding 2% to larger low grade projects
corrosion and heat resistance, and also to facilitate awithgrades that could be less than 0.5%. By the
clean and hygienic surface for food and other1970's the bulk mining of other low grade metals was
processing. About 65% of nickel is used toadvancing, most notably gold using new
manufacture stainless steel. Around 20% is used inhydrometallurgical techniques at grades well below
other steel and non-ferrous alloys, often forthose that had traditionally been exploited. It may
specialized industrial, aerospace and militarynow be nickel's turn to benefit from this approach.
applications. About 9% is used in plating, while 6% inHistorically most sulfide nickel ore bodies have had
used in other applications, including coins and a varietygrades of 1% to 2% Ni, mined underground at
of nickel chemicals. As the emerging middle class inrelatively low production rates and with high operating
countries such as China and other Asian nationscosts. Laterite nickel deposits can be bulk mined, but
demand more stainless steel products from sinks tothe nickel can't be concentrated, so that both capital
door handles, nickel consumption is on the rise.and operating costs are typically higher than sulfide
Stainless steel currently accounts for aboutprojects. As a result major mining companies are not
two-thirds of nickel consumption up from one-third innecessarily looking for high grades, but rather for
the past three decades. While nickel demand inlarge tonnage potential that can be shown to be
Europe and the Americas decreased in the periodeconomically attractive. One example of low grade
from 1997-2002, this demand increased in Asia andsulphide nickel deposits is Hard Creek Nickel
the former East Bloc countries. Chinese nickelCorporation's (HNC) 100% owned Turnagain Project
consumption increased by 15.4% in 2005, slightly lesslocated near Dease Lake, BC, Canada. Turnagain's
than the 19.1% growth reported in 2004. Chinesenickel grades, low by traditional standards, show
consumption during this decade has actually been theexciting potential if treated with newly developed
single largest factor impacting the nickel market, withprocess technology, and a bulk tonnage open pit
supply struggling to keep pace with this rising demandmining approach. At Turnagain, early stage process
due to a physical shortage of the metal. In fact,studies carried out by several independent and well
China recently announced a cut-back in stainless steelrecognized mineral industry testing laboratories
production because they are unable to sourcesuggest that there are promising opportunities to
enough nickel. This rising demand and limited supply isrecover metal on site, at a high production rate, for
pushing up prices. As of July 2006, nickel was tradingan excellent financial return on the necessary capital
at over $12.00US per pound in contrast to historicalinvestment for equipment, steel, cement, energy,
prices of less than $5.00US over the previous 15labor and other costs, while nickel is priced at
years. Experts predict that this continued highhistorical levels. In a Preliminary Assessment recently
demand - based not only on China's continuingprepared by AMEC Americas Limited (AMEC), one of
economic boom but also on the West's demand forthe top three international mine engineering design
hygiene, will continue for the foreseeable future.firms, a 50,000 tonne per day milling operation by
Only about 1.3 million tons of new or primary nickelHard Creek Nickel at Turnagain is modeled with a 17
are produced and consumed annually, compared withyear mine life that is predicted to produce a total of
over 15 million tons of copper and nearly 800 million833 million pounds of nickel, 57 million pounds of
tons of steel. The growing world economy throughcobalt and 85 million pounds of copper over the life
the mid-nineties triggered an expansionary drive inof the mine, representing the largest new nickel
nickel capacity by existing manufacturers resulting in adeposit in Canada. There are very few similar
production increase of 30%in the five year periodlow-grade nickel projects in the world.
from 1993-1998. European expansion in both Finland