This is the case with Koniambo in New Caledonia which will start commercial production at the beginning of January, or the refinery project between Taganito Mitsui & Co and Sumitomo Metal Mining in the Philippines, despite a Japanese nickel market with an excess of 15,000 tons over three quarters.
The World Bureau of Metal Statistics reported an excess of 89,000 tons of nickel refined globally from January to September 2012 vs. a shortage of 3,000 tons in 2011. This lead to the fact that 25% of the nickel industry is currently producing at a loss.
Consequently, Vale, the second largest producer, announced it would close the Frood nickel and copper mine in Canada by the end of the year to focus on more competitive reserves as the century-old mine’s resources become depleted and make it less economical. Another example is Xstrata, the fourth largest producer, which decided to suspend operations at Cosmos mine in Western Australia and initiate a care and maintenance schedule in response to adverse market conditions, including a prolonged period of low nickel prices and a strong Australian dollar.