Mincor Seeking Nickel Mines, Projects, Moore Says

Mincor Resources NL, an Australian metal supplier to BHP Billiton Ltd., is looking to acquire nickel projects as it increases production.

“We’re interested in acquisitions,” David Moore, managing director of the Perth-based company, said today in an interview. “We’re looking to acquire projects at any stage of their development.”

Nickel for immediate delivery on the London Metal Exchange has risen 30 percent this year to close at $24,009 a metric ton yesterday as demand for the metal used to make stainless steel improved in line with the global economic recovery. The price will average $26,165 a ton next year, David Wilson, an analyst at Societe Generale, said yesterday.

Mincor fell 0.5 percent to A$1.99 at the end of trading on the Australian stock exchange. The company, which has a market value of A$399 million ($393 million), generated cash from operations of A$99.49 million in the year ended June 30, more than double the 12 months before.

“Demand is not too bad, it’s healthy,” Moore said. “We’ve got a fairly strong price. The market in the next three to four years is quite finely balanced in production and supply. Supply surprises and any production underperformance could push supply into deficit which in nickel means an immediate price response.”

Mincor is targeting production of between 13,500 metric tons and 14,500 tons in the year ending June 30, 2011, and between 15,000 tons and 16,000 tons for the following 12 months, Moore said.

The company’s agreement to sell all its production to BHP, the world’s biggest mining company, expires in 2019. Mincor’s two mining centers in Western Australia’s Kambalda district include six underground mines.

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