Overview of the Nickel Industry with special focus on exploration trends

Presentation to the Standard Chartered Earth’s Resources Conference, Hong Kong, June 2011

The Nickel industry currently produces 1.6 mtpa of metal worth US$35-40 billion. Over the last three decades the industry has, on average, achieved similar returns to other metals (of 9% return on capital employed). However, nickel prices and profitability are extremely volatile, making this a challenging business to be in.

In the past most production came from nickel sulphides, but most of the available resources are laterites.

The presentation has maps showing where the giant nickel deposits have been found in the world over the last 60 years. Analysis indicates that, going forward, the average discovery costs are projected to be ~24 c/lb for nickel sulphides and ~2c/lb for nickel laterites. However, due to high costs, many of the laterite deposits won’t be mined in the near-term.

The presentation has some high level information on the indicative capital and operating costs for new nickel sulphide and laterite projects. It recommends that investors focus on those projects with capex costs

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