Hi everyone,As I have been saying before , we can anticipate...

Hi everyone,

As I have been saying before , we can anticipate that the huge Goro Nickel mine in New Caledonia will be delayed at least and possible not go ahead at all.

The following article shows that I am not alone in these predictions.

Just remember what will happen to the Nickel price if this huge project will be delayed and lets not mention what will happen if it will not go ahead at all.

jojo



Adds analyst comment. Figures in U.S. dollars unless noted)

By Susan Taylor

OTTAWA, March 2 (Reuters) - Brazilian mining giant CVRD (VALE5.SA: Quote, Profile , Research) (RIO.N: Quote, Profile , Research) is considering making environmental and other improvements at its Goro nickel-mining project in the French overseas territory of New Caledonia, it said on Friday following a two-day visit by its chief executive.

Many traders and markets had braced for an announcement on whether CVRD would continue developing the troubled nickel project, with some rumors circulating that the company was set to pull the plug.

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"We're pleased with the progress that we've made in our discussions with the authorities and local community leaders during this visit," said CVRD Inco spokesman Steve Mitchell.

"While the project is still under review, we are considering a number of improvements in environmental performance and other key areas to ensure a cost-efficient and sustainable project. We have been discussing these improvements with our stakeholders in New Caledonia."

CVRD Chief Executive Roger Agnelli, who left the South Pacific island on Friday afternoon to travel to China, discussed the project with government officials and employees. Local activist group Rheebu Nuu has been fighting the development, which it fears will harm the environment.

Goro, which is forecast to produce 60,000 tonnes of nickel a year at full capacity, is one of the world's largest nickel mines currently under development. Continued...

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It is considered a key project to help ease extremely tight nickel supplies, along with BHP Billiton Plc's (BLT.L: Quote, Profile , Research) Ravensthorpe project in Australia.

In November, CVRD pushed the cost estimate for Goro 40 percent higher to $3 billion and said production would start in late 2008. Comphanhia Vale do Rio Doce, the world's biggest iron ore miner, inherited Goro when it purchased Canadian nickel miner Inco in 2006.

Inco had previously forecast costs of more than $2.15 billion and said nickel production would start in 2008.

CVRD has been reviewing the closely watched project, which has been hampered by labor unrest and vandalism, looking for ways to reduce costs.

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"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," said UBS London analyst Robin Bhar in a note.

"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."

($1=$1.17 Canadian)

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