Nickel investors have been on a wild ride in 2014. Indonesia, supplying more than a fifth of global exports, surprised the mining world in January by putting into effect an outright ban on nickel ore exports.
Initially record warehouse inventories, massive stockpiling by Chinese nickel pig iron producers and growing mine supply kept a lid on the price which was languishing at near five-year lows below $14,000 a tonne at the start of the year.
The Asian nation, against expectations, stuck to its guns and the ban, in combination with fears that tensions with Russia could affect supply from top miner Norilsk, eventually sent the price above $20,000 in May.
But as LME stocks continued to rise and the Philippines – the only other source in the region of high-grade laterite ore required by China and responsible for 9% of global mine supply – took up some of Indonesia’s slack, supply worries subsided and the price tanked again, nearly wiping out all 2014’s gains.
Prices are now back above $16,500 on the back of dwindling stockpiles in China and expectations of robust demand from steelmakers in the US, China and the EU. And most forecasts for next year and beyond are optimistic with few bottom of the range predictions going below $20,000.
During all this tumult in the nickel industry, a small Toronto-headquartered firm called Asian Mineral Resources (CVE:ASN) was quietly establishing Vietnam’s first nickel complex on the doorstep of the world’s number one consumer of the steelmaking ingredient.
AMR’s Ban Phuc nickel mine and plant – one of the world’s few new sources of nickel sulphide – went into commercial production in June last year, but the project has a much longer history.
The company listed on the Toronto Venture Exchange as long ago as 2004 and by 2006 had produced a feasibility study and received a mining license.
Song Da hosts a number of projects and a producing mine extending into neighbouring China over 200km away
But a combination of a hike in concentrate export tariffs by Vietnamese authorities from 5% to 20%, a global slump in the price and a typhoon that hit the mine site located 160km west of the capital Hanoi, scuppered the project.
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