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Argosy minerals is a stock to watch. Anglo has just taken a big stake in Anaconda. The best lateriet nickel stock in the world is Argosy Minerals. look here argo.net.au "Anglo American makes big bet on nickel mining - Friday, August 6, 1999 Mining Reporter -- Anglo American PLC is making a big bet on the future of nickel mining by backing an evolving technology it expects will drive prices lower and dramatically alter the industry's landscape -- and which threatens the dominance of Canada's two nickel mining giants, Inco Ltd. and Falconbridge Ltd. The world's largest mining company -- known mainly for its interests in gold and diamonds -- plans to invest $211-million (U.S.) in Australia's Anaconda Nickel Ltd. Anaconda is spending hundreds of millions of dollars on new mines in Australia that will employ the new nickel mining processes. "We want to be on the front end," James Campbell, the chairman of the base metals arm of Anglo American, said yesterday in a telephone conference call from South Africa. "We had a good look before we attached our flag to Anaconda." South Africa-based Anglo American also wants to add to its relatively modest exposure to the nickel industry, he said. It has interests around the world in copper, lead and zinc. The cash investment will increase Anglo American's interest in Anaconda to 23 per cent from 3 per cent and alleviate financial pressures on the debt-burdened company. Sherritt International Corp. of Toronto, which licences the technology being used by Anaconda, owns 9 per cent. "As things go forward, we would look positively on increasing our stake [in Anaconda]," Mr. Campbell said. Sherritt has also said it would like to increase its holding. Anaconda has already invested about $1-billion Australian ($978-million Canadian) on the first phase of the Murrin Murrin mine and plans to spend almost the same amount on the second phase, which will reduce overall operating costs to 35 cents (U.S.) a pound. The first phase has begun operations, although the startup has proved difficult, mining analysts say. Anaconda owns 60 per cent of Murrin Murrin, and metals trader Glencore International AG of Switzerland owns the other 40 per cent. Glencore also owns 20 per cent of Anaconda. Andrew Forrest, the chief executive officer of Anaconda, said the cash provided by Anglo American will help the company go ahead with its Mount Margaret project, which is near Murrin Murrin. Construction at Mount Margaret is expected to begin in mid-2000 and the project is planned to rival Murrin Murrin in size. Nickel and cobalt are produced from the low-grade laterite ores, which lie close to surface, by using sulphuric acid and pressure-leaching along with electricity. Senior officers from both Anglo American and Anaconda said yesterday that the new technology has to be a concern to the traditional suppliers of nickel. Conventional nickel producers use smelters and refineries to extract nickel from sulphide-bearing ore such as that found at Inco's proposed $1.1-billion Voisey's Bay project in Labrador and its mines in Ontario and Manitoba. Anaconda says it can make money with nickel trading at $1.60 to $1.80 a pound and he described $2.25 a pound as a "robust" price. Nickel closed yesterday at $2.81 a pound on the London Metal Exchange, up 12 per cent during the past two weeks as a result of low inventory levels caused by production cutbacks and delayed shipments from Russia's RAO Norilsk Nickel, the world's largest nickel producer. Mr. Forrest estimates Anaconda will be able to produce nickel at a cash cost of 50 to 60 cents a pound. By comparison, Inco's cash costs during the second quarter of 1999 were $1.24 a pound. During the second quarter, Inco almost broke even. "The writing is on the wall that the future for the nickel industry will be the laterites," said Glenn Brown, a mining analyst for Haywood Securities Inc. "But that future might not be until the next decade." Mr. Brown said the first phase of Anaconda's Murrin Murrin project went $300-million (Canadian) over budget. "Anglo American has been dabbling in the nickel laterite business for years," Mr. Brown said. Likewise, Inco has been working on developing a method to process laterite ores and it continues to studying the Goro project in New Caledonia in the South Pacific | ||||||||||||||
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