Xstrata will shut down one of its Western Australia nickel mines in August because of plunging prices.
“Subject to there being no sustained improvements in the market conditions, Sinclair mine will be put on care and maintenance,” general manager of sustainable development at Xstrata’s Australian nickel unit Wayne Groeneveld said.
Nickel has fallen for two straight years in London and is trading 79% below the May 2007 record as the global recession slashes demand.
Groeneveld said the mine still had an estimated life of “at least several years” but declined to give production figures for the mine which currently employs approximately 150 workers.
Xstrata won control of Sinclair, which began production 10 months ago, through its A$3.1 billion ($2.2 billion) takeover of Jubilee Mines NL in February last year.
Jubilee Mines estimated in September 2007 it would spend A$90 million on plant construction and mine development at Sinclair.
The company said the mine would produce 33,799 metric tons of nickel metal through its life at a yearly average of 6,000 tons.
“The original plan had been to go underground at the completion of the open pit,” Groeneveld said.
“Given the current market conditions, we have deferred going underground.”