Western Areas Considering Nickel Mine Development Restarts

Australia-based nickel miner Western Areas Ltd. (WSA.AU) said Wednesday it is considering resuming development of two of its mines due to higher nickel prices.

"Last year we were able to report that significant progress had been made to bring Western Areas' other main deposits, Diggers South and Cosmic Boy, into production as soon as the nickel price stabilized," the company said in its 2009 full year report.

"With the nickel price currently above $8 a pound ($17,637 a metric ton), Western Areas is considering resuming development of these mines."

The company said Diggers South has the potential to produce between 5,000 and 6,000 tons of nickel a year and Cosmic Boy between 2,000 and 3,000 tons .

Earlier this month, Western Areas said it would expand its Forrestania operation and that will enable the nickel miner to hit its 2010 target of nearly doubling output to 20,000 metric tons of annual production.

Expansion includes developing its Spotted Quoll open pit, as well as a doubling its concentrator capacity at Cosmic Boy, opened March this year.

Concentrator output will go to BHP Billiton's (BHP) Kalgoorlie operation and the company has a two-year offtake agreement with China's Jinchuan Group for up to 25,000 tons of nickel from Forrestania.

-By Devon Maylie, Dow Jones Newswires; [phone]; [e-mail]