Nickel miner Western Areas is poised to find a new offtake partner after Russia's Norilsk Nickel agreed to modify their existing arrangement because it is reducing the size of its Australian operations.
By next year 100 per cent of Western Areas's concentrate will be free to be sold to other nickel players such as Jinchuan, BHP Billiton, Xstrata and Vale.
Western Areas, which entered a trading halt yesterday, is expected to have a deal tied up soon with one of those companies.
The exit from the Norilsk deal could make the miner more of a takeover target, but its attraction to other companies will depend on the terms of the new offtake agreement.
Jubilee Mines's decision for a one-year offtake agreement was widely hailed as a reason it proved so attractive to Xstrata.
Western Areas's managing director, Julian Hanna, told Xchange his preference would always be for a shorter-term contract.
He said any offtake deal was likely to be accompanied by financing from the partner, which would preferably be done by pre-payment on nickel sales rather than a stake in the company.
Norilsk also said it was halting two operations in WA as part of a cost-cutting program adopted after nickel prices collapsed. The Black Swan and Lake Johnston units stopped operations yesterday, resulting in the loss of 330 jobs by March.
