EV Boom Charges Up Nickel Miner Mincor

By Glenn Dyer | More Articles by Glenn Dyer

For small WA mining group, Mincor Resources the resurgence in demand for nickel from the renewables (especially electric cars and storage) couldn’t have come at a more opportune time.

Just as the demand from renewables and electric vehicles and storage has seen change its mind on the future if its Nickel West business, Mincor has seen a similar revival – ironically thanks to Nickel West.

Investors have cottoned on to the change, but are awaiting more substantive news.

Since the news broke of a possible new deal with Nickel West a week ago, Mincor shares have risen to around 42 cents at the close yesterday – up around 12%.

The outline of the deal with Nickel West should see Minor re-starting its Kambalda operations once a deal is finalised, adding jobs.

Nickel West and Mincor have signed sign a term sheet covering a five-year supply deal which replaces a 20-year offtake deal with Nickel West that ended in February.

Mincor says the proposed new deal offers “substantially improved terms”.

Mincor did not reveal details of the agreement but said it covered a minimum 200,000 tonnes a year of nickel sulfide ore, up to a maximum 600,000tpa.

The term sheet gives the duo two months to lock in a full agreement, though that can be extended by mutual agreement.

Mincor closed its nickel mines in 2016 after a sustained downturn in nickel prices.

Mincor Managing Director, David Southam, said in the statement the term sheet with BHP Nickel West set the foundations for a commercially attractive processing and offtake solution for Mincor’s Kambalda nickel sulfide business which would underpin its plans to fast-track the restart of nickel mining.

“We are very pleased to have achieved this milestone position with a Tier-1 offtake partner which we expect to deliver benefits to both companies while also delivering significant value to the Kambalda and Coolgardie communities,” he said.

“This is a really important development for Mincor and our shareholders. It clearly demonstrates our commitment to restart nickel operations as quickly and efficiently as possible in one of the world’s most prolific sulphide nickel provinces.

“Mincor has clearly outlined its strategy to re-commence mining operations in Kambalda to take advantage of what we see as a looming generational change in the nickel market – and the signing of this term sheet marks a critical step towards realising that vision.

“We weighed up the alternatives, including investing in our own stand-alone nickel concentrator and the option of toll-treating our ore via third parties. The term sheet we negotiated with BHP Nickel West is compelling on a number of levels – most importantly with respect to price, risk and capital intensity – which clearly meant that this was the best economic outcome for our shareholders over the contract term with the lowest risk.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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