Western Areas to supply nickel to Chinese producer

Nickel miner Western Areas says it has awarded an offtake agreement to Jinchuan Group, building on a five-year relationship with the Chinese nickel producer.

In a statement to the ASX, Western Areas said nickel concentrate mined from its flagship Forrestania nickel project would be sold to Jinchuan out of the Esperance Port using sealed shipping containers.

The contract is valid for the next two years, or when 26,000 tonnes of nickel is delivered.

Managing director Dan Lougher said the company has had a close relationship with Jinchuan over the last five years.

“In our experience, Jinchuan has demonstrated without question to be a quality customer, and as China’s largest nickel producer, this is a very important strategic relationship for Western Areas to have,” he said.

“The tender process involved many new participants and was incredibly competitive against the backdrop of the Indonesian export ban and significant potential structural change to the nickel industry in Western Australia.”

Western Areas also sells 12,000 tonnes per annum of nickel contained in concentrate to the BHP Billiton Nickel West business.

Shares in Western Areas were 0.4 per cent higher at $4.33 per share at the close of trade.