The volatility in world nickel prices should be considered extreme but there should be no reason to lament when it returns to more normal levels, according to one of Australia"s most experienced nickel and resources commentators.

Addressing the 2006 Paydirt Australian Nickel Conference in Perth last week, Brian Hurley said no-one had been able to predict the current nickel prices of around US$35,000 a tonne.

Mr Hurley - the Chairman of Australia's leading mining talkfest, Diggers and Dealers held in Kalgoorlie each year in August - told the conference that never in his 38 years in the sector, apart from one hiccup in the late 1960s - had there been such a tremendous year to be in nickel as 2006.

"At this time last year, the London Metal Exchange (LME) price was US$13,000 a tonne and there was a definite downward trend and the price bottomed out at around US$11,500 - but has since shot up into the stratosphere," Brian Hurley said.

"None of us would have predicted US$35,000 tonne as a likely high point this year - but while nickel stocks are low as are copper and aluminium stockpiles, the current nickel price seems over the top compared to other metals.

"While I'm sure no-one is complaining, the volatility of the price seems extreme.

"The only problem is that when the LME price recedes from US$33,000/tonne to around US$20,000/tonne, which is where one expects it to be, the pundits will declare the sky has fallen in and world is about to end."

Brian Hurley told delegates that the reality was that even at US$18,000-US$20,000/tonne that was "a damn good price" and about four times as it was in October 2001.

ays he was pleased to welcome PMA, with the Windimurra Project representing a potentially significant producer of magnetite concentrate in the Mid West region.

"PMA is well advanced with plans to redevelop the Windimurra operation, proposing a major $175 million investment in the region," Neil Roberts said. "Once in production, Windimurra will be a major producer of magnetite concentrate and PMA is currently reviewing opportunities to market this product in China."

"Previously, the iron and titanium produced at Windimurra has simply been stockpiled, but PMA believes this is a potentially very valuable resource which can be exported to help meet the surging demand, particularly in China, potentially making a significant positive contribution to the Mid West region," he added. "As a result, PMA has a strong interest in infrastructure development in the Mid West region and is keen to make a contribution to the Alliance in advocating a coordinated approach to this important issue."

PMA's managing director Roderick Smith says the company would be aiming to transport up to 1 million tonnes per year of magnetite concentrate from the Windimurra project to potential overseas customers once production started next year.

"Our discussions with Chinese steel mills have suggested there would be a market for this level of magnetite production as a by-product to our core vanadium production, and possibly also for additional magnetite concentrate," Roderick Smith says.

"The key factor for selling iron ore mined in the Mid West region is the provision of infrastructure, and we are looking forward to working with the other members of the Geraldton Iron Ore Alliance to work on common user infrastructure solutions," he says.

"Of particular interest to us is the development of rail and road infrastructure within the so-called Southern Transport Corridor in the Mid West region, which already carries the railway from Geraldton as far as Mullewa, and the Mid West Natural Gas Pipeline from Geraldton to Windimurra."

The Alliance has previously stated that one of its key short-term goals is to ensure rail and road infrastructure in the Southern Transport Corridor is capable of carrying the increased tonnages that will progressively occur as Alliance members commence production. In addition to PMA, other Alliance members with interests in the Mid West region's Southern Transport Corridor are Gindalbie Metals, Midwest Corporation and Mount Gibson Iron Limited.

At the instigation of the Alliance independent economic, transport and infrastructure consulting firm, Strategic Design and Development (Sd+D) has undertaken a review of the capacity of the rail and associated systems to handle increased tonnages which was recently forwarded to the Western Australian Government for its consideration.