Nickel took part in the base metal’s slide this week; with nickel futures dropping from cash buyer $15,600 per tonne on the LME last Friday, to $14,950 per tonne on Tuesday’s close. The sharp losses in futures values hit all the base metals as another round of fear spread through the markets. Copper also dropped for the fourth day, heading for the longest losing streak since December, after weak US manufacturing data strengthened the dollar and signaled to traders that demand remains weak. Global nickel inventories tracked by the London Metal Exchange have fallen 5.5 per cent since they rose to a 14-year high on April 30. Nickel for delivery in three months on the LME has risen 32 per cent in the same period.

So far 2009 has been a good year for a recovery, but on Monday, investors took cover in a broad sell-off as fears mounted that a recovery would be slower and take longer than expected. ”The global economy is still shrinking, even if at a slower rate,” said Bart Melek, global commodity strategist at BMO Capital Markets. “Things are pretty weak, and they’re going to continue to be weak.” The Dow Jones hit 8,497 on Wednesday, continually down after peaking at 8,799.26 last Friday.

Company News

Mirabela Nickel Ltd. is set to ramp up production at its Santa Rita mine in Brazil this September, increasing output by about 56,000 metric tonnes annually within 3-5 years. Soon after the mine is in full production, a feasibility study will become a quick priority, according to managing director Nicholas Poll. Mirabela’s kick off is later than anticipated, due to a delay in financing. Mirabela will start Santa Rita at an annualized rate of 18,600 tons of nickel in concentrate, and plans to increase that to 26,000 tons when the project is running at full capacity by mid-2010.

Russian state bank VEB has bought a 3.68 per cent stake in the world’s top nickel producer Norilsk Nickel. The Russian government pledged at the end of last year to invest RUB 175 billion from reserves to aid the crisis hit stock market using VEB as its agent. UC RUSAL, the world’s largest aluminum producer, controlled by tycoon Mr. Oleg Deripaska holds a stake of around 25 per cent in Norilsk. In October, UC RUSAL took a USD 4.5 billion loan from state bank VEB in order to pay back other debt using its 25 per cent stake in Norilsk Nickel as collateral.

Xstrata Nickel’s announced the indefinite suspension of mining operations at its Montcalm Mine in Timmins, Ontario after a geotechnical review showed structural damage to the mine. Unplanned ground movements at Montcalm forced underground activity at the mine to be stopped at the end of March 2009. Keith Bullock, Mine Manager at Montcalm said: “Safety remains our paramount concern. We are unable to access the mine until a further investigation is conducted and a full assessment of options and risk management plans is complete. We have therefore decided to cease operations indefinitely. We will continue to conduct further geotechnical monitoring at the mine to assess the full extent of the structural damage and the options that are available to us.” Montcalm was expected to produce approximately 9,000 tonnes of nickel contained in concentrate this year. Its mine life was scheduled to end in mid 2011.