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:: HPAL Process Crucial to Future Nickel Market Development
The future of a number of new nickel projects hinges on the ability of operators to successfully implement the third generation of the High Pressure Acid Leach (HPAL) process, T.D. Newcrest metals analysts Greg Barnes told a large audience of mining professionals and analysts Sunday.
In a speech to the Prospectors and Developers Association of Canada Conference, Barnes advised the success or failure of HPAL "will have a big impact on how the nickel market develops."
Barnes explained that 14 nickel projects are scheduled to come on line between 2010 and 2013, five of which will use HPAL. Ironically, he noted, if HPAL "works as advertised," there will be too much nickel produced between 2010 and 2013.
However, if HPAL only achieves half of its projected output, Barnes said the global nickel will be close to achieving a balance between supply and demand.
Referring to nickel as the most volatile of all metals, Barns forecast that the global market will be in deficit this year. A series of unanticipated events, which include a drop in stainless steel production, strikes at major nickel mines, and a cut in mine production may result in a nickel market that is in deficit this year, he predicted.
Barnes said a 2009 decision by nickel miners to cut production by 329kt or 23% "basically saved the nickel price."
The nickel market will also be positively impacted by a strong recovery in stainless steel production with 11% growth forecast this year. However, the nickel market could have a surplus of 46,000 tonnes next year, Barnes predicted.
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