Australias Consolidated sticks to nickel target

Australia’s Consolidated Minerals Ltd. said on Wednesday it was on track to boost nickel output to as much as 6,400 tonnes in fiscal 2007, despite lower-than-expected first quarter production due to a mine fatality.

World nickel prices have zoomed to record highs above $32,000 a tonne this month on dwindling supplies of the metal, needed to give stainless steel its shine, forcing consumers to scour mining regions for more metal. Forecasters put annual world consumption at around 1.3 million tonnes this year.

“We are on track to produce our target of 6,000 to 6,400 tonnes of nickel for fiscal 2007,” Managing Director Rod Baxter said in a statement.

In the quarter ended Sept. 30, Consolidated said it produced 1,059 tonnes of contained nickel, up 8.5 percent on the year earlier period.

A miner was killed in an accident at the company’s Kambalda operations in far-western Australia on Sept. 22, closing the mine for four days.

“Whilst production for the quarter was about 127 tonnes lower than we expected at this stage of the ramp-up, we are still on track to reach our annual target,” Baxter said.

Output in the last quarter was also hurt by varying grades, or richness, of mined ore, he said.

“Our objective is to increase production on last year by 40 percent, from 4,445 to 6,000-6,400 contained nickel tonnes this financial year,” Baxter said.

Manganese, which like nickel is used in steelmaking, is the biggest revenue-getter for Consolidated, which accounts for 10 percent of world supplies. However, in future, Baxter sees nickel playing a more important role.

Consolidated shares were flat at A$2.44 at 0220 GMT versus modest gains in the wider S&P/ASX200 .AXJO index. ($1=A$1.32)