Nickel miner Western Areas has agreed on key terms with China’s Jinchuan Group to sell up to 15,000 tonnes of nickel concentrate over the next year.
Western Areas managing director Julian Hanna said the new contract would commence in March next year, and contained improved terms for the company, compared to its existing agreement.
Western Areas has been supplying Jinchuan with nickel concentrate since July 2010.
Mr Hanna said the short-term nature of the contract put the company in an enviable position in having additional flexibility to negotiate future sales.
“We are seeing independent analysis indicating the nickel concentrate market is heading into a sustained period of short supply,” he said in a statement.
“Western Areas’ ability to be a reliable supplier of high quality nickel concentrate provides a clear strategic advantage over our peers.
“We consider that in the current volatile market, the decision for a short term contract will be beneficial for the company.”
Jinchuan Group was selected from a competitive tender process, Mr Hanna said.
At close of trade today, Western Areas stocks had slipped 1 per cent, to trade at $5.66.
