harmanis on jbm and nickels future

Harmanis likes it local for Jubilee

Kate Hayc ck - MINING NEWS
Thursday, 9 August 2007

JUBILEE Mines' chief executive Kerry Harmanis seems happily anachronistic in the increasingly global resources industry with his company's emphasis on its Western Australian tenements.


On the tenth anniversary of Jubilee's discovery of its Cosmos nickel project, Harmanis said his company remained firmly focused on organic growth at its two Western Australian projects.

Harmanis said he believed Western Australia was still a world class metals province with plenty of high grade metals – including nickel – left in the ground.

"We think there's lots of mineralisation to be found here … and we don't see the need to go to Africa or Kazakhstan or any of these exotic places," he said.

Harmanis outlined Jubilee's exploration program at Cosmos, which has been mined since 1997 and produced around 37,000 tonnes of nickel metal during that time.

Despite being a 10-year-old mine, Harmanis was convinced of the site's continued ability to deliver more high grade nickel resources.

"Cosmos is a high-grade nickel camp with unmatched exploration potential," he said.

"We think we've explored this area about 5-10 percent. There is lots and lots of potential here – [and] there's lots more coming."

Harmanis said the company, which is fully self-funded, would spend around $40 million in exploration at Cosmos in 2007, including the Alec Mairs deposits.

"About this time last year we put out a production schedule of about 20,000 tonnes by 2011; let me say that in about a month we will be updating and upgrading that production target," he said.

Harmanis was positive about the future for nickel despite its recent price plummet to under $30,000 per tonne.

"I believe in the China story, the ever-expanding china story. One of the very simple equations that works for me – and remember on the back of the nickel price that underpinning nickel is the growth in steel and iron, all the other commodities in the China growth – is that Japan, Taiwan and Korea between them consume an average of 15 kilograms of nickel per capita. China consumes five.

"[So] if you do the calculations in the next 10 years with China going to 15 kilograms, the same as the other three … that's 15 kilograms by 1.3 billion people, that's about an extra one and a half million tonnes of nickel needed per annum," he said.
"That's a whole 100 percent doubling of world production at the moment."

Harmanis also said stainless steel substitution with products such as pig iron wouldn't pose an issue for the future of nickel as it would only replace a small tonnage of the metal.

"I think we're going to have a pretty strong demand for our commodities here in Australia so I think a company like Jubilee will be making some pretty strong profits," he said.

Shares in Jubilee were up 24c to $14.30 at close of trading yesterday and were at $13.94 this morning.