S.Korea group to invest $1.1 billion in nickel

S.Korea group to invest $1.1 billion in nickel

A South Korean consortium led by state-run Korea Resources Corp. will invest a total of $1.1 billion to develop a nickel mine in Ambatovy, Madagascar, the commerce ministry said on Monday.

The mine, which is estimated to have 125 million metric tons of nickel, will produce up to 60,000 metric tons of the metal a year from 2010.

The South Korean consortium, led by Korea Resources, Daewoo International Corp. (047050.KS), Keangnam Enterprises Ltd. (000800.KS) and STX Corp. (011810.KS), will take a 27.5 percent stake in the nickel project.

Canada’s Dynatec (Toronto:DY.TO – news) and Japan’s Sumitomo Corp. (8053.T) will hold a 40 percent and 27.5 percent stake, respectively.

South Korean companies will have the right to purchase 50 percent of the total output.

“The development will provide a stable supply of nickel to local market,” the ministry said in a statement.

South Korea, the world’s fourth-largest nickel consumer, has been hit hard by soaring nickel prices.

Global nickel prices recently reached a new high of $32,625 per metric ton and have more than doubled so far this year due to low inventory and speculative fund buying.

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