Bloomberg News

Tectonic Restarts Nickel Project as Prices Rise (Update1)

January 18, 2007

Tectonic Resources NL, an Australian mineral exploration company, said it was restarting mining at its RAV 8 nickel project in Western Australia, as prices of the metal soared.

The project has an initial mine life of three months, without specifying how much nickel could be produced, the company said in a statement to the Australian Stock Exchange.

``The current proposal will look to exploit the better grade areas around the margins of previously mined areas,'' the company said. Mining was suspended in September 2005 at RAV 8 because nickel prices then didn't support work, it said.

Prices of nickel, used in the making of stainless steel, reached a record in London yesterday on concern a labor dispute in Canada will cut supply. Prices have jumped sixfold since 2002 as stainless steel production expanded.

Shares of the company rose 1.2 cents, or 12 percent, to 11 Australian cents, at 10:52 a.m. Sydney time.

The mine produced 15,314 metric tons of contained nickel in five-and-a-half years of life, the company said on its Web-Site. It produced 1,654 tons for the year ended June 30, 2005, about half of the previous year's output, according to the Register of Australian Mining.

To contact the reporter on this story: Tan Hwee Ann in Melbourne at hatan@bloomberg.net

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net.


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