Below is a copy & paste from my earlier post from some time ago. The
bold text below is the part where SMM was quoted as saying that they wouldn't immediately mine the area.
This article is a bit different than all the reposts from the various websites.
http://in.reuters.com/article/2014/06/12/australia-nickel-solomonislands-idINL4N0OR1S020140612
* Legal fight coming to a head over Solomon Islands nickel find
* Japan's Sumitomo and Australia's Axiom set to make final cases
* Companies have different development plans for nickel deposit
By James Regan
SYDNEY, June 12 (Reuters) - A court ruling in the Solomon Islands may finally unlock a large nickel deposit that geologists have known about for half a century but have been unable to exploit because of ownership changes and legal wrangling.
Japanese giant Sumitomo Metal Mining and tiny Australian explorer Axiom Mining are fighting over the Isabel nickel laterite discovery and will submit final arguments to the Solomon Islands High Court on June 23, following a court case that has already run for 88 days.
A ruling is expected soon after and could lead to development of the deposit, at a time when nickel prices have soared following a ban in January on ore exports by Indonesia, the world's biggest supplier.
Analysts estimate Isabel compares in size or grade to other large South Pacific nickel mines, such as Vale SA's Goro mine in New Caledonia and the China-owned Ramu mine in Papua New Guinea.
Axiom, with a market value of just A$55 million ($52 million), would aim initially to ship unprocessed ore within two years to hungry Chinese buyers to make nickel pig iron.
Sumitomo, a metals major and Japan's No. 2 copper producer, has indicated it is interested in a larger, long-term development to produce refined metal.
"We have a fast-track program to move to mining," Axiom's managing director Ryan Mount told Reuters. "There's obviously been a bit of a frenzy in the last six months to secure supply, especially among nickel pig iron smelters in China."
Nickel prices on the London Metal Exchange have risen a third so far this year, while the price of raw nickel ore has quadrupled as Chinese buyers seek supplies, Mount said.
At these prices, the operation could generate around $50 million in cash flow a year, helping the company raise cash for a potentially larger operation at a later date, he said.
Sumitomo said the deposit was still in the exploration stage and the company, which has exploration rights over other deposits in the region, would decide whether to undertake a broad feasibility study.
"If we decide to conduct a feasibility study and make an investment, it will take at least several years to develop," Sumitomo spokesman Masashi Takahashi said.
LONG TIME COMING
Solomon Islands, whose main exports include palm oil, copra, timber and fish, has a GDP of about $3,450 per capita, putting on par with Ghana and Pakistan. It has little history of mining beyond start-and-stop exploitation of the Gold Ridge gold deposit on neighbouring Guadalcanal Island.
Gold Ridge was worked briefly in 1999-2000 but closed when civil unrest broke out between warring islands, restarting in 2011 only to be suspended again in April by current owner St Barbara Ltd.
The Isabel deposit was discovered in 1956 by Canada's International Nickel Co, now owned by Vale, but it left the region in 1975 around the time of self rule. A second prospector walked away in the 1990s amid weak nickel prices.
Sumitomo won an international tender for prospecting licences in 2010. The licences were canceled in 2011 and similar rights were later awarded to Axiom.
Mount, who has lived in the Solomon Islands for four years and speaks the local language Pijin, said Axiom holds legal pacts with landowners giving it direct ownership of 80 percent of the deposit, while local landowners hold the balance.
Axiom's funds for the court case have come largely from a series of capital raisings that has tripled its shares on issue since 2011.
Sumitomo said before the case began that its exploration rights had been canceled only a month after they were awarded, with no reason given and no opportunity for comment.
A High Court ruling may still be subject to appeal, a source close to the matter said.
($1 = 1.0654 Australian Dollars) (Additional reporting by Yuka Obayashi in TOKYO; Editing by Richard Pullin)
