London, England — MININGREVIEW.COM — 14 April 2009 – Swiss-based mining group Xstrata plc – the world’s fifth- biggest diversified mining group by market value – plans to suspend operations at its Sinclair nickel mine in Australia in August in the event that metals prices have not rebounded by then.
The company had planned to launch an underground operation at Sinclair in August when extraction work at the mine’s open pit was due to end, spokeswoman Claire Divver said.
“If market conditions do not improve by August, we’ll defer the expansion into the underground operation, and when the open pit is completed we’ll put the operation on care and maintenance,” she told Reuters.
Nickel prices have stagnated this year after sliding by more than 50% in 2008, and plunging by around 80% since touching a peak of US$51 650 (R496 000) per tonne in May 2007.
Benchmark nickel prices on the London Metal Exchange last week were little changed, trading at US$10 945 (R105 000) per tonne.
Sinclair has a capacity of 5 500 to 6 000 tonnes of nickel in concentrate, Divver added. The planned closure would not have an impact on Xstrata’s Cosmos mine, which has a capacity of 13 000 tonnes of nickel in concentrate, she said.
Xstrata acquired Sinclair and Cosmos – both located in Western Australia – through its purchase of Jubilee Mines for A$3.1 billion (R20 billion) in February 2008. Its nickel division, headquartered in Toronto, is the world’s fourth largest following its acquisition of sector heavyweight Falconbridge of Canada in 2006.