Western Areas has re-negotiated an offtake agreement with China’s largest nickel company Jinchuan Group for up to 26,000 tonnes of nickel-in-concentrate during the next two years.
The new contract is being finalized with the detailed terms to remain confidential. The company’s tender process for the concentrate attracted bids from several major global operating, investing and trading companies.
Western Areas managing director Daniel Lougher says both his company and Jinchuan are pleased to continue the relationship. “We have been selling nickel concentrate to Jinchuan since July 2010. The new contract commences in February 2013 and contains improved payability terms for Western Areas over the existing agreement.
“Western Areas was encouraged by the strong competition for its nickel sulphide concentrate, which supports its view that there is a looming shortage of quality nickel concentrates in the market. The concentrate has particular characteristics which make it very attractive for end users to smelt or blend with concentrates of lower quality,” he says.
Western Areas currently produces between 25,000 tonnes and 26,000 tonnes of nickel-in-concentrate annually and sells it to BHP Billiton Nickel West in Australia and Jinchuan in China. The company’s primary asset is the Forrestania project in Western Australia, about 400km east of Perth. (Nickel is the commodity of focus in the March/April edition of The ASIA Miner.)