Bloomberg reported that Anglo American Plc aims to more than quadruple nickel output this decade to better compete with larger rivals OAO GMK Norilsk Nickel and Vale SA.
Mr Walter De Simoni CEO of Anglo's nickel unit said that the London based company may produce as much as 180,000 tonnes by 2020 as it ramps up output at its Barro Alto project in Brazil and weighs investing another USD 6 billion in two new ventures in the country.
According to Bank of America Corporation, competitors such as Vale and Xstrata Plc are boosting output after prices for nickel, used in stainless steel to prevent corrosion, surpassed USD 29,000 per tonne in February 2011, the highest since April 2008. Global output is expected to climb about 10% or 163,000 tonnes to 1.83 million tonnes in 2011 as the economic recovery boosts metals demand in construction and industry.
Mr De Simoni, a Brazilian national, said on the sidelines of the World Economic Forum conference in Rio de Janeiro that "The nickel business is going very well. After the 2008 crisis, the nickel business recovered faster than everybody would have thought and the price now is much stronger."
Anglo started production at the USD 1.9 billion Barro Alto nickel project in Brazil’s Goias state last month and is aiming for average output of 41,000 tonnes annually in the first five years after attaining full capacity in 2012. The company may add a further 112,000 tonnes per year from two projects in Brazil Jacare and Morro Sem Bone, which are yet to be approved and may require about USD 6 billion.
Still, Anglo's current output of 38,700 tonnes is dwarfed by that of larger rivals. Norilsk said on January 31st 2011 that output may rise to as much as 315,000 tonnes in 2011, 5.9% higher than in 2010. Vale, which aims to overtake Moscow based Norilsk, plans to reach 295,000 tonnes in 2011 after producing 179,000 tonnes in 2010.
Mr De Simoni said that "Nowadays nickel is a small business in Anglo and we have the big responsibility and challenge to make it grow. When Barro Alto is at full capacity, we will be achieving more than USD 1 billion in revenues, from USD 300 million now."
More than 80% of the nickel from Barro Alto is destined for export, mainly to European customers such as ArcelorMittal, ThyssenKrupp AG and Acerinox SA. The company has also begun exporting the metal to China.
(Sourced from www.bloomberg.net)
