Reuters reported that Minmetals Australia has no plans to restart its Avebury nickel mine, closed in 2008 due to depressed markets, predicting recent gains in nickel prices MNI3 are unsustainable.

Mr Andrew Michelmore CEO of Minmetals said that "What I need to see is that the current prices are sustainable, and at the moment I can't see the current prices being sustained."

Mr Michelmore also said that work was underway to extend the life of the giant 500,000 tonnes per year Century zinc mine in Australia beyond its 2015 closing date.

London Metal Exchange three months nickel prices MNI3 were last indicated at USD 22,090 to USD 22,190 a tonne, nearly treble the recession low of USD 8,850 seen in October 2008 and up from around USD 19,000 at the end of 2009.

But Mr Michelmore said up to 100,000 tonnes of new nickel producing capacity, about 8% of world production last year, from projects in Australia, Papua New Guinea and New Caledonia could hit the market in the short term. He added that "I'm sitting back and waiting to see how that develops because if it does come on, and with a rush, that could take the market down very quickly."

Mr Michelmore, who served as chief of the former WMC, once the world No 3 nickel producer and sold to BHP Billiton in 2007 for USD 6 billion, also doused speculation Minmetals will act to list all or part of MMG on the Australian bourse in the near future. He said that "Quantity, timing and location are all still up in the air. We've already got the funds we need and will only go to the market when we need to access further funds."

(Sourced from www.reuters.com)