Australia’s
Under the deal, WMC will ship nickel in matte from its Kalgoorlie operations in Western Australian to Jinchuan over six years.
Beginning in 2005, WMC will redirect sales directly into China when existing contracts with Japan’s Sumitomo Metal and Mining Co. expire, meaning that Jinchuan will replace Sumitomo as WMC’s largest nickel-in-matte customer.
The new deal covers the sale of 90,000 tonnes of nickel-in-matte between 2005 and 2010, and is on top of a similar 30,000-tonne sales agreement signed with Jinchuan last December.
Based in Jinchang in central China’s Gansu province, Jinchuan produces 60,000 tonnes of nickel metal per year, or 88% of China’s output.
WMC has had a relationship with Jinchuan since 1988, when the Aussie miner helped its Chinese partner build its flagship smelter.
Meanwhile, WMC reported a first-half, after-tax profit of A$47 million on revenues of A$1.39 billion. Both figures were virtually unchanged from the second-half 2002 pro forma earnings and revenues, as a higher Australian dollar offset improving U.S. dollar-denominated commodity prices.
WMC says that nickel production and sales were both lower owing to planned major maintenance at the Kalgoorlie smelter.
Other highlights included the commissioning of the rebuilt uranium solvent-extraction plant at Olympic Dam in Australia, though budget forecasts for the uranium and copper solvent-extraction plant rebuilds rose to A$375 million.
“We are at the midpoint of what was always going to be a tough year for WMC Resources,” said WMC CEO Andrew Michelmore in a release. “The outlook is for an improved second half, building on the return to stronger production in the June quarter. The market outlook for our commodities is strong and all our operations will have gone through major repair and rebuild during 2003.”
WMC also reports that no interim dividend will be declared.
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