What a day Nickel is having:
http://www.kitcometals.com/charts/nickel_historical.html
It may break $9 soon.
The reason behind this spike in Nickel is that Vale has shutdown their Goro mine in New Caledonia due to a spill. Goro is a Nickel Laterite mine and requires a acid leaching to extract the Nickel.
The Goro mine produces 40,000 tonnes per year of Nickel.
The length of the closure is unknown. If it is major split the shutdown could be for an extended period. Losing 40,000 tonnes of Nickel would be a major blow to the supply of nickel.
For those of you NOT longs that have held NOT for a few years, you may recall previous presentations showing that the majority of future Nickel is being discovered and produced from Laterite mines which are expensive and risky due to acid leaching spills.
Another example is Glencore Xstrata's Konaimbo Laterite mine which is having it's own difficulties and product is below estimates. Konaimbo is another Mega nickel mine currently aiming to produce 26,000 tonnes of nickel per year.
Vale, Glencore, First Quantum and some of the other big players are placing big bets on their large low quality Nickel Laterite deposits. So far there has been limited success extracting nickel on time and on budget from these types of plays.
The cost and risk to these large Nickel Laterite mines is becoming evident. I'm not sure if we will see many more of these types of mines until success has been proven.
These struggles along with the Indonesian ban will put upwards pressure on supply and cost of nickel.
The supply side of nickel has changed drastically in the last 6 months and sanctions on Norlisk from Russia would cause even more supply concerns.
I believe this is a story that is just starting to materialize and we will see a volitile, rapidly increase price for Nickel.
Noront's timeline will be timed perfectly. A high nickel price would make financing and de-risking much smoother (although I believe they already have this all figured out).
Enjoy the coming months fellow Notster's
JDR
