from yesterday's MiningNews:Nickel to hit $8 a pound by January:...

from yesterday's MiningNews:

Nickel to hit $8 a pound by January: Western Areas
Charlotte Dudley
Wednesday, 22 October 2008

THE managing director of nickel miner Western Areas has declared the current price of nickel an “anomaly” and forecast a rebound to $US8 a pound by late January.

Speaking at the Paydirt Nickel Conference in Perth, Western Areas MD Julian Hanna said the slump in nickel prices could not continue and would see a turnaround “pretty quickly”.

Just back from a nickel operations tour of China, Hanna said the current low price – down to about $4.70 a pound – was unsustainable and forcing “too much” marginal production.

Based on discussions with Chinese low-cost nickel producers he tipped the metal to head back to $US8 a pound by Australia Day (or just after the Chinese New Year).

Nickel has come off the boil from its 2007 highs with spot nickel today trading at $US10650 a tonne.

Despite declining prices and the challenging market conditions Hanna expressed great confidence in Western Areas’ assets and the Western Australian nickel sector.

“There’s many more discoveries to be made in Western Australia,” he said.

Western Areas remains unhedged with Hanna saying he had “great faith in the long-term nickel price”. In addition the company has benefited from the falling Australian dollar.

While upbeat on nickel on the company’s own operations, Hanna said without a recovery in nickel prices the industry may see more closures.

Western Areas stocks closed 13c down on $3.40.