By James Regan
SYDNEY, July 29 (Reuters) - Australian nickel miner Mincor
Resources MCR.AX said on Wednesday it will reduce production
by up to 56 percent over the six months to end-December due to
persistent low nickel prices that have left its operating levels
unsustainable.
"While near and medium term nickel price forecasts remain
positive, it is clear that Mincor's mining operations cannot
be sustained at spot prices without substantial changes," the
company said in a statement.
Mincor shares fell as much as 11 percent on the Australian
Securities Exchange to their lowest since Aug. 8, 2013.
The company also unveiled a April-June quarter operating
loss of A$1.51 million ($1.11 million) versus an A$1.30 million
surplus the previous quarter.
This week, London Metal Exchange three-month nickel CMNI3
traded at around $11,350 a tonne, not far above a six-year low
hit on July 8.
Other nickel miners have also been rethinking output amid
the weak pricing.
Canada's Sherritt International Corp S.TO on Tuesday
reduced its 2015 nickel production target to 78,000-82,000
tonnes, down from a previous estimate of 80,000-86,000
tonnes. ID:nL3N1085BT
Nickel miners had hoped that an Indonesian ban on exports of
nickel ore would lead to a rise in demand in China for the
steel-making alloy from other parts of the world, but Philippine
suppliers appear to have taken up the shortfall.
Macquarie Bank has slashed its nickel price outlook,
cutting it by 13 percent for 2015 after similar moves by other
investment banks such as Morgan Stanley (NYSE:MS), Citi, ANZ and JP
Morgan. ID:nL4N0ZV5I5
Macquarie, however, expects prices to recover later this
year - a view echoed by UBS - as demand from Chinese mills picks
up.
Mincor will reduce output to between 2,000 and 3,000 tonnes
of nickel-in-ore in the first half of fiscal 2015, which ends on
Dec. 31, though output could be ramped up rapidly to higher
levels if market conditions improve, it said.
Production in the same period of fiscal 2014 was 4,599 tonnes
of nickel in ore.
($1 = 1.3626 Australian dollars)
(Editing by Tom Hogue)