might be worth a look at topping up on AUZ today as BHP and MRE have halted some Nickel operations due to flooding, should put upward pressure on the nickel price again. Also the exploration announcement on Area 57 is long overdue once released it may give the stock a kickstart again.
BHP, Minara Halt Output at Australian Nickel Mines (Update5)
By Madelene Pearson
Jan. 4 (Bloomberg) -- BHP Billiton Ltd. and Minara Resources Ltd., Australia's two largest nickel producers, halted output at mines after heavy rain, possibly adding to pressure on supply of the metal used to make stainless steel.
Pit operations at BHP's Mt. Keith and Leinster mines in Western Australia have halted, Emma Meade, spokeswoman for Melbourne-based BHP said by phone today. Minara stopped output at its Murrin Murrin mine after 75 millimeters (3 inches) of rain, spokesman Willie Rowe said from Perth.
Nickel prices reached the highest in at least 19 years in December as demand from China helped cause a supply shortfall. Use of the metal will outstrip supply by 57,000 metric tons this year, according to BHP, the world's third-largest nickel producer in 2005.
``The nickel market doesn't tend to like interruptions of any kind,'' James Wilson, resource analyst at D.J. Carmichael & Co., said from Perth. ``Any kind of interruption to production or anything like that, the market tends to react badly to those and the price of nickel tends to go up.''
Nickel for three month delivery rose $275, or 0.9 percent, to $32,750 a metric ton on the London Metal Exchange yesterday amid forecasts of downpours in Australia's biggest nickel mining area by the nation's Bureau of Meteorology. The metal surged 147 percent last year.
Shares Drop
Shares in BHP fell 94 cents, or 3.7 percent, to A$24.54 on the Australian Stock Exchange at 1:22 p.m. in Sydney. Shares in Minara, 51 percent owned by Glencore International AG, dropped 32 cents, or 5.7 percent, to A$5.29. Zug, Switzerland-based Glencore is the world's largest commodity trader.
BHP's $2.2 billion Ravensthorpe nickel project to the south of the Leinster and Mt. Keith mines, is ``tying down'' in preparation for the rain, Meade said. BHP's Nickel West operation, which runs the Mt. Keith and Leinster mines, is the world's third-largest producer of nickel in concentrate, the company said on its Web site.
As much as 44 millimeters of rain fell through to 6 a.m. Perth time today at the town of Leonora, located about 200 kilometers (124 miles) south of the Leinster mine, the Bureau of Meteorology said on its Web site.
`Local Flooding'
A deep low weather system, formed out of what was Cyclone Isobel, had produced ``unseasonally heavy'' rain in the region and ``localized flooding,'' the bureau said. Additional falls of 10 to 20 millimeters are forecast for the area later today, the bureau said.
``When the ground gets too soft they obviously can't move the big equipment around safely,'' BHP's Meade said in reference to the closed mine pits.
The poor weather had also slowed some trucking of ore for Mincor Resources NL's four underground nickel mines in the area, Steve Cowle, chief operating officer with Mincor said. Still, he said it wouldn't affect production for the month.
Jubilee Mines NL and Sally Malay Mining Ltd., which also mine nickel in the area, said the rains hadn't disrupted their operations. A Jubilee spokeswoman said it was ``business as usual,'' at its operations. Richard Jordinson, the chief operating officer at Sally Malay, said there had been no major disruptions at its mine.
Cyclone Isobel forced Woodside Petroleum Ltd. and Santos Ltd. to shut down facilities accounting for almost half of Australia's oil output yesterday as it passed near the nation's main crude producing areas.
Processing operations at the Murrin Murrin mine, owned 40 percent by Glencore, won't be affected by the rain as the company has ``significant amounts'' of ore inventories, Minara's Rowe said.
The rain hadn't affected operations at BHP's Kambalda concentrator or the Kalgoorlie smelter yesterday, Meade said