nickel stocks - boom, page-24

from http://www.moneysense.ca/news/shownews.jsp;jsessionid=EFKHDLFKKDCO?content=20040201_011009_0_reuters_roc

Strike, Lock-Out Hit Falconbridge Nickel Site
2004-02-01 01:04:38 EST

VANCOUVER, British Columbia (Reuters) - Mining and milling operations at Falconbridge Ltd.'s Sudbury, Ontario site, which produces 5 percent of the world's nickel, were halted on Sunday after the company and union failed to agree a new labor contract.

"There is a strike or a lock-out or whatever you want to call it...We're out on the picket line," said Tom Datillo, a spokesman for the local group of the Canadian Auto Workers union.

No further talks were scheduled with the world's third biggest nickel producer, Datillo said.


Falconbridge confirmed it had been unable to reach terms for a settlement and said it had begun implementing contingency plans at the northern Ontario operation after the previous 3-year labor agreement expired at midnight.

"These plans include idling production at its four mines and mill in a safe and orderly manner, as well as operating its Sudbury smelter at a reduced production rate," Falconbridge said in a statement.

Metals markets have been on tenterhooks about a strike at the Canadian operation, as it will coincide with an already worrisome shortage of nickel. The work stoppage would come just four months after a supply-crippling, 13-week strike ended at Inco Ltd, the world No.2 producer.

Analysts expect the market to be short of 30,000 tonnes of nickel both this year and next year, creating problems for producers of stainless steel, for which the silvery white metal is a key ingredient.

A shutdown of the Sudbury mine, milling and smelting site will deplete world supplies by more than 4,000 tonnes a month. Smaller quantities of copper and cobalt, which are mined as by-products of nickel, would also be lost.

Nickel prices more than doubled last year on supply worries. Prices rose $500 to $15,100 a tonne on Friday on expectations of a strike at the Sudbury site.