Decreasing metal prices are causing setbacks for mining companies around the world. Mincor Resources, the sixth largest nickel miner in Australia, is one of the mines that expressed the unfolding of unfortunate happenings if prices do not improve in the next few months.
Shares for Mincor Resources dropped more than 3 percent earlier this week, a staggering loss for any company trying to stay afloat in the global mining industry. This came after the company announced that it will be placing production cuts in the near future caused by nickel’s decreasing prices. Though Mincor stated that it would consider controlling its output in the future, the mining company assured that it would still be able to reach its target of 8,500 tons of nickel for fiscal year 2015.
“Mincor expects to produce approximately 120,00 tonnes of ore at 2.8 percent nickel between June and November 2015, and to achieve its previously stated production target for financial year 2015 of approximately 8,500 tonnes of nickel-in-ore,” released the company in a statement, as reported by Metal Bulletin.
Additionally, Mincor stated that Miitel and Mariners, the company’s flagship mines, will be reviewed that could ultimately resort to a lower output towards the end of the year. This review could mean the loss of 50 jobs, according to Mincor’s Managing Director David Moore.
“After four years of falling nickel prices, changes were required in order to safeguard the future of the company,” Moore told Reuters.
Nickel, despite its many applications, continues to show weakness since the beginning of the year. In January, prices were down by 12 percent, a decrease that almost cut nickel’s price to half since 2011.
Aside from Australia, the Democratic Republic of Congo is also experiencing certain kinds of effects due to falling nickel prices. According to a report by Bloomberg, the growth of Congo’s mining sector is at risk despite a consistency in supply. This is mainly due to increased taxes and power shortages, adding to decreasing metal prices.
Electricity is a vital element of mining production in the country, but Societe Nationale d’Electricite, Congo’s state electricity company, did not honor its contracts with mining companies. Aside from power issues, the mining sector is also fighting to prevent the revision of the country’s mining code, which will increase mineral royalties and decreased tax exemptions.
While Australia and Congo are carrying out measures to adjust to falling nickel prices, nickel-centric developing mines in other parts of the world are still on the initial stages of production. Amur Minerals Corporation (OTC:AMMCF) has finally acquired its mining license from Russian Prime Minister Dmitry Medvedev. The company can now start producing 841,000 tons of nickel and copper from the site, which will hopefully propel nickel prices.