Mincor Resources has wrapped up a new long term agreement with mining giant BHP to supply nickel concentrate in WA.
BHP’s Nickel West division will process up to 600,000 tonnes per annum of nickel sulphide at its Kalgoorlie smelter out to 2025 once Mincor restarts its operations in December.
Mincor put its mines on care and maintenance in February 2016 as world nickel prices sank to decade lows below $US8,000 a tonne.
Prices have since recovered to around $US15,450 thanks to rising demand from electric vehicles and other alternate technologies such as battery storage.
Mincor revealed plans for the new deal with BHP back in May of this year.
That rising demand and expectations of it continuing well into the future has seen BHP reverse course and decide to keep and expand its Nickel West business based in WA after spending years trying to sell it and not finding a willing buyer.
BHP has already invested well over $100 million on new processing plant in WA to produce the type of nickel that can be used by electric vehicle and battery makers.
BHP’s long term supply deals with local nickel miners Western Areas and Independence Group are due to be renewed this year.
The agreement replaces a 20-year-old deal signed between the two miners.
Mincor will get revenue from its sales of the nickel-in-concentrate to BHP at LME nickel prices.
Mincor shares were unchanged at 46.5 cents yesterday, not a bad result in the near 2% sell-off.
