Shares in nickel miner, Western Areas (WSA) ended down 0.35% at $2.85 yesterday despite encouraging news of two major metal contracts.
That was after the company had earlier announced new concentrate offtake contracts with BHP subsidiary BHP Nickel West and major Chinese metal group, Jinchuan Co. The two deals cover WSA’s high grade Forrestania nickel concentrate product.
The company told the ASX in a statement that the two new contracts follow the successful completion of a highly competitive tender process that has resulted in improved commercial terms compared to current offtake agreements.
WSA CEO, Dan Lougher, said in the ASX statement: “The Company is very pleased with the execution of the new agreements that extend our long and mutually beneficial relationship with Nickel West and reintroduces Jinchuan as an offtake customer following completion of the Tsingshan contract as at 31 January 2020.”
“It is notable that both of our offtake customers are involved in the downstream operation of nickel smelters. Western Areas firmly believes that the smelting of concentrates is a key process to continue to feed both the emerging Electric Vehicle (EV) battery market, via nickel sulphate, and the traditional stainless steel market,” he added.
The Nickel West contract is for a period of three years or until the completion of the aggregate quantity. That quantity is 10,000 tonnes of nickel contained in concentrate a year, with a 30,000-tonne aggregate limit.
The agreement with Jinchuan is for two years and is for 10,000 tonnes of nickel contained in concentrate per annum, with a 20,000-tonne aggregate limit. It can be extended for a further 12 months, by mutual agreement.
Jinchuan is the largest nickel matte and cathode producer in China.
