August 5, 2019 / 1:16 AM / 10 months ago

UPDATE 1-Australia's Mincor signs nickel supply deal with BHP

(Recasts, adds details)

Aug 5 (Reuters) - Australia’s Mincor Resources NL said on Monday it had signed a long term agreement with mining giant BHP Group to supply nickel concentrate.

Under the deal, BHP’s Nickel West division will process up to 600,000 tonnes per annum of nickel sulphide at its Kalgoorlie smelter out to 2025 once Mincor has restarted its operations in December.

Mincor put its mines on care and maintenance in February 2016 as London Metal Exchange nickel prices sank to decade lows below $8,000 a tonne. Prices have since recovered to around $15,450.

The agreement comes amid BHP’s strategy to ramp up sales of its nickel products to the emerging battery industry and will alleviate some pressure on BHP to find replacement sources of feed.

BHP’s long term supply deals with local nickel miners Western Areas and Independence Group are due to be renewed this year.

The agreement replaces a 20-year old deal signed between the two miners. Mincor will get revenue from its sales of the nickel-in-concentrate to BHP at LME nickel prices.

Reporting by Syed Saif Hussain Naqvi in Bengaluru and Melanie Burton in Melbourne; Editing by Joseph Radford and Darren Schuettler

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