Permit delay may hit Turkey nickel mine project

Permit delay may hit Turkey nickel mine project

Completion of European Nickel Plc.’s Turkish nickel project may be hit by delays in securing a forestry permit, the company said.

ENickel said it had yet to secure the licence needed to clear the site for its Caldag mine project in western Turkey ahead of construction work.

“The company currently believes that construction activity can be partly accommodated within the overall schedule.

“However, there may be some impact on the final completion date,” ENickel said in a statement released on Tuesday.

The Caldag project, which is designed to produce 20,400 tonnes per year (tpy) of nickel and 1,200 tpy of cobalt in a mixed hydroxide product, is expected to start up in early 2008.

Full production is expected in 2009, with commissioning of its own acid plant slated for the third quarter of 2008.

Caldag, with total development costs of around $300 million, will use a simple leach process to produce the mixed hydroxide.

Global nickel supplies are critically tight and look set to remain so for the next couple of years.

Supply fears have been heightened recently by reported delays to key projects such as CVRD-Inco’s Goro in New Caledonia, with a planned 60,000 tpy capacity, and BHP Billiton Plc’s Ravensthorpe in Australia.

News of these earlier setbacks helped to push nickel prices to new highs in early December, with the market reaching a fresh peak of $34,950 a tonne in mid-month.

At 1155 GMT the London Metal Exchange (LME) three month nickel price was quoted at $33,400-600 as the market eased back in line with other base metals.

ENickel said it expected to complete agreements with its senior lenders in late January for $180 million of project finance.

At 1155 GMT the company’s shares were quoted at 41/43 pence. On Tuesday they slipped from 46 pence to end the day at 42 pence.

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