Anglo American approves $1.2 billion nickel project in Braziladmin
Global mining giant Anglo American says it has approved the construction of facilities to mine nickel in Brazil, amid record high prices for the metal.
The Barro Alto nickel project will cost about 1.2 billion dollars (903 million euros) and construction is due to begin in 2007, Anglo American said in a statement.
Production of the nickel is expected in 2010, it added.
Anglo American, which is registered in Britain but operates mainly in South Africa, expects Barro Alto to produce an average of 36,000 tonnes of nickel a year over a minimum mine life of 26 years.
“The production from Barro Alto will contribute significantly to a potential doubling of the group’s nickel production to around 90,000 tonnes per annum by 2011,” the group’s outgoing chief executive Tony Trahar said in the statement.
The price of nickel hit an all-time high in London trade on Tuesday, supported by fading global stockpiles, analysts said.
On the London Metal Exchange (LME) the price of nickel for delivery in three months reached 34,500 dollars per tonne, the highest reading since it began trading on the exchange in 1979.
Nickel, used to increase malleability and to prevent corrosion, has leapt 156 percent since the start of 2006 thanks largely to low stocks and ongoing production problems.
“The outlook for the nickel market is positive with strong demand continuing and this project provides an excellent opportunity to grow Anglo American’s position in this attractive market,” Trahar said Thursday.
Barro Alto is located in the State of Goias in Brazil, about 170 kilometres (106 miles) north-west of Brasilia.
The Barro Alto nickel deposit was discovered in the late 1960s and Anglo American completed its purchase of the deposit for 35 million dollars in 2002. A feasibility study was initiated in 2004 and completed in September 2006.