Analyst Mr Christopher Ecclestone suggests that the Ambatovy nickel project in Madagascar will propel a USD 2 billion market cap mining stock that most investors have never heard of to being the only really multinational nickel play besides the heavily iron ore diluted Vale.
Sherritt International produces nickel, cobalt, thermal coal, oil and gas and electricity. It is the largest geothermal coal production in Canada and, is in the strongest position as a foreign operator in Cuba and the current time.
In an analysis published recently, Mr Ecclestone noted that Sherritt's objective is to become the world's largest laterite nickel and cobalt producer effectively a new Inco. He said that "Some sort of restructuring of Sherritt into energy and mining would propel Sherritt Nickel into a role as a leading global player and give it a currency to roll up some of the smaller mines particularly in Australia that are available and suffering from post boom obscurity."
Mr Ecclestone suggests that in a sustained economic recovery, we would expect cobalt to be back above USD 30 pretty smartly. Nickel might take decades to see its 2007 highs again.
In his analysis, Mr Ecclestone notes Sherritt has remade itself over the years on various occasions by slicing and dicing its assets according to the taste of the times. There is no reason to think that will not happen again.
He suggested that "A spin off of the Cuban Madagascan operations, the Alberta refinery and mine would create a New Inco. The only fly in that ointment is the machinations of the Cuban émigré lobby. As a standalone nickel play the New Inco would have paper that it could use to bolt a portfolio of other smaller plays around the world and nip at the heels of the nickel un savvy Vale."
(Sourced from www.mineweb.com)
