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New Caledonia approves extra nickel ore exports to China
December 30, 2016 / 10:56 AM / a year ago

New Caledonia approves extra nickel ore exports to China

PARIS, Dec 30 (Reuters) - The government of New Caledonia has approved requests from three mining companies to export as much as 2 million tonnes of low-purity nickel ore annually to China as part of efforts to help the industry to recover from a prolonged slump in prices.

The decision, dated Dec. 27 and posted on the government’s website, marks the second time this year that the French-controlled Pacific territory has authorised nickel ore shipments to China, having approved 700,000 tonnes in April.

The export permits were granted to Eramet’s Societe Le Nickel (SLN), Groupe Ballande’s Societe des Mines de Tontouta (SMT) and Societe Mai Kouaoua Mines (MKM), specifically aiming to compensate for the loss of demand from Australia’s Queensland Nickel, which went into administration at the start of this year.

Queensland Nickel had been one of a handful of customers approved for nickel ore shipments from New Caledonia, which accounts a quarter of the world’s nickel reserves and has been reluctant to sell directly to consuming countries, preferring to process the mineral locally to boost its revenue.

China, meanwhile, is demanding new sources of nickel ore to feed its vast stainless steel industry after the Philippines, the world’s biggest ore exporter, halted production at some mines because of environmental violations.

SLN will be allowed to ship 650,000 tonnes of nickel ore a year to China over three years, SMT has permission for 950,000 tonnes over two years and MKM is authorised to export 350,000 tonnes a year for two years.

MKM’s permit also allows for a variation of 10 percent from the headline volume, meaning it could export up to 385,000 tonnes a year, the government said.

SMT and MKM’s volumes will be exported to Chinese customers via commodities trading group Glencore, it said.

However, the New Caledonian authorities require that the approved exports do not supply Chinese producers of so-called nickel pig iron, a low-purity product seen as competing with ferronickel refined in New Caledonia.

Reporting by Gus Trompiz; Editing by David Goodman

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