NEW CALEDONIA MINE AT CRUX OF NICKEL DEMAND

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Soaring prices for the metal could climb out of hand

WELLINGTON, New Zealand (Radio New Zealand International, Jan. 23, 2011) – A global commodity analyst with the financial service firm Citi, Alan Heap, says world nickel markets are closely watching Vale’s plant at Goro in New Caledonia, which has about a quarter of the world’s nickel reserves.

Continuing demand in China for stainless steel and not enough supply contributed to a 38 percent rise in the price of nickel last year.

The 4.5 billion US dollar Goro plant is forecast to produce 60,000 tonnes a year but its unconventional leaching process has contributed to cost overruns and delays.

While the plant is reported to be 99 percent complete, Mr Heap says analysts are waiting for further news that the project is on schedule.

"If that project gets delayed further or fails completely then that will certainly transform the world nickel markets and will push nickel prices up substantially."

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