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Gold/Mining/Energy : Inco-Voisey Bay Nickel [ T.N.V] -- Ignore unavailable to you. Want to Upgrade?

To: 1king who wrote (545)	11/6/1998 8:55:00 PM
From: WALT REISCH	Respond to of 1615

TORONTO, Nov 6 (Reuters) - Shares of Inco Ltd. N.TO, the Western world's largest nickel producer, continued to climb on Friday as bullish investors speculated that sluggish metal markets would soon rebound. Inco shares rose C$0.80 to close at C$20.05 in heavy trading on the Toronto Stock Exchange on Friday, capping a 50-percent rally for the blue-chip stock over the past fiveweeks. Toronto-based Inco's stock hit C$12.50, near 12-year lows, this past summer as base metal prices plummeted and financial turmoil swept through Asia and other emerging markets. Asia accounted for 35 percent of world nickel consumption just three years ago, but the region's appetite for metal fell precipitously with the onset of the Asian flu. Analysts said a recent round of interest rate cuts in the United States and an improved global economic outlook were spurring a comeback for key commodities and cyclical stocks. The U.S. Federal Reserve has lowered interest rates by 50 basis points since September 29 in a bid to support the domestic U.S economy and assuage fears of a global financialmeltdown. "Interest rate cuts and a little bit more comfort about the economy overall has led to a rebound," said Richard Aldrich, analyst with Lehman Brothers in New York. Nickel production cuts, signs of lower Russian supply and a strike at the world's fourth-largest nickel mine in the South Pacific have also helped to bolster confidence in the nickelmarket. Workers at two mines belonging to Eramet SA in New Caledonia recently walked off the job, stoking hopes of a contraction in nickel supply. Nickel traded at $1.95 a pound on the London Metal Exchange on Friday, down from a 1997 high of $3.72 a pound. "The strike in New Caledonia just happened to be at the right time to boost the psychology. I don't find it materially or fundamentally important," said Terence Ortslan, an analyst with TSO & Associates of Montreal. Like most mining companies, Inco has been hard hit by the glut in the nickel market and the refusal of most producers, including itself, to cut production. Inco lost $24 million, or $0.18 a share, in the third quarter of 1998, compared with earnings of $5 million, or a loss of $0.02 a share, in the same period last year. Despite its improved share price, a cloud still hangs over the financially embattled company. Analysts continue to express doubts about Inco's C$4.3-billion Voisey's Bay nickel project in Labrador, Newfoundland. Talks between the company and the Newfoundland government were suspended in July after the two sides failed to reach an agreement on development of the mine. Newfoundland Premier Brian Tobin has said his government will not issue a mining license for Voisey's Bay until the company agrees to process ore in Newfoundland, a plan that Inco says no longer makes economic sense. ($1=$1.53 Canadian) 941-8104) or email: toronto.newsroom@reuters.com)) REUTERSRtr 19:05 11-06-98 Copyright 1998, Reuters News Service