Norilsk, BHP Billiton, Anglo American Unloading Mines as Nickel Rally Continues

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The 37 percent surge in nickel this year means some of the world’s biggest metals companies may finally be able to sell as much as $14 billion in unwanted mines they’ve held for years.

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Bloomberg Businessweek reported that diversified mining companies such as BHP Billiton Ltd. (BHP) and Anglo American PLC don’t see nickel as strategic because it generates less cash than other commodities and requires more investment. With nickel prices improving and companies looking to cut costs,  Norilsk Nickel, the largest producer, last month agreed to sell two mines in Australia. BHP, valued at $174 billion, said May 14 that it’s holding talks to sell its Australian nickel unit, while London-based Anglo said it may consider shedding its mine in Brazil.

Private-equity firms and smaller companies such as $12 billion First Quantum Minerals Ltd. (FM) could be potential buyers, according to Sanford C. Bernstein & Co.

On Tuesday, June 3, the price of Chinese primary nickel experienced the biggest change, rising 1.9 percent to CNY 135,650 ($21,711) per metric ton. The price of Chinese 304 stainless steel scrap held steady at CNY 16,400 ($2,625) per metric ton. For the fifth day in a row, the price of Chinese 316 stainless steel scrap remained essentially flat at CNY 16,100 ($2,577) per metric ton. The price of Chinese 304 stainless coil remained essentially flat at CNY 16,400 ($2,625) per metric ton. The price of Chinese 316 stainless coil was unchanged at CNY 26,000 ($4,161) per metric ton.

The price of Chinese ferro-chrome saw little movement at CNY 8,300 ($1,328) per metric ton. The price of Chinese ferro-moly held steady at CNY 145,000 ($23,208) per metric ton.

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On the LME, the 3-month price of nickel increased 0.8 percent to $19,430 per metric ton. On the LME, the nickel spot price rose 0.5 percent to $19,400 per metric ton. The Indian nickel cash price declined 0.2 percent to INR 1,157 ($19.56) per kilogram.

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