Cheer up folks,The below extracted from MetalsPlace. Worth...

Cheer up folks,

The below extracted from MetalsPlace. Worth noting the penultimate sentence in particular.

EL


CVRD defers decision on Goro nickel development
Source: Hoovers

See also
Nickel Board
Nickel CatalogBrazilian miner Cia. Vale do Rio Doce (RIO) has postponed a decision to progress its Goro nickel project in New Caledonia but said it was pleased with discussions with authorities and local communities, the company said late Friday.

CVRD Chief Executive Roger Agnelli traveled to the French controlled island in the South Pacific last week and was expected to make an announcement on future development of the project, which is under review due to 40% cost overruns and local opposition.

The 60,000-metric-ton-a-year nickel development coming on stream is a key swing factor in the severely tight nickel market. Costs have shot up to US$3 billion, up from US$2.15 billion, and CVRD has delayed commissioning from late 2007 to end-2008 and production ramp-up to 2009.

A press conference scheduled for Friday was canceled because Agnelli had to leave to China earlier than anticipated.

CVRD inherited the project in 2006 when the company took over Canadian nickel miner Inco but Goro has been hampered by fierce opposition from local groups, led by environmental activist group Rheebu Nuu, that culminated in violent protests last year.

Nickel is a key component in the manufacture of stainless steel, with China leading demand growth in line with strong capacity expansions at its stainless steel mills.

Prices on the London Metal Exchange have been at boiling point since 2006 on the back of low inventories but also project delays such as at Goro or BHP Billiton Ltd.'s (BHP) Ravensthorpe development. LME three-month nickel traded at US$40,900/ton early Monday, down $100 on the Friday PM kerb after hitting a record US$42,200/ton Friday, up 30% since the start of the year alone.

"The nickel market remains very tight and supply from Goro is crucial in addressing the imbalance between supply and demand which we see continuing through 2008. Any further delays and/or potential downsizing of the project will have implications for the host of other nickel laterite projects yet to be financed and developed. The nickel market could stay tighter for longer than expected as these supply concerns remain to the fore," said UBS base metals analyst Robin Bhar.