Xstrata Nickel will halt operations at its Craig and Thayer-Lindsley nickel mines ahead of schedule and bring lower-cost Nickel Rim South and Fraser Morgan mines in Greater Sudbury into production in the new year.
Production will continue to ramp up at Nickel Rim South, which remains on budget and on schedule for production in 2009 with 18,000 tonnes of contained nickel by early 2010.
The Fraser Morgan mine will ramp up to commission later next year. At full production Fraser will produce 7,200 tonnes of refined nickel per annum.
Prompting these moves at least in part are nickel prices that have slumped on declining demand. Trading is approximately 79 per cent down from their $20 a pound plus in May 2007.
Thayer-Lindsley, with annual nickel output of 2,700 tonnes, will cease operation by the end of January 2009 and Craig Mine, with annual nickel output of 5,500 tonnes, will enter into care and maintenance mode June 2009.
"Xstrata Nickel is taking decisive action during a period of lower nickel prices to reduce the cost of nickel production in Sudbury and ensure that our business remains robust throughout the economic cycle," Xstrata Nickel chief executive Ian Pearce said in a release.
"In the current environment, these older, higher cost operations are no longer viable. The accelerated transition from older mines to lower cost operations will contribute to the sustainability of our business at Sudbury over the long-term," he added.
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