PERTH (miningweekly.com) – ASX-listed nickel miner Western Areas has signed an offtake agreement with Chinese steelmaker, the Tsingshan Group, for some 10 000 t/y of nickel contained in concentrate, for a three-year period, starting in February 2017.
Western Areas MD Dan Lougher said on Monday that the agreement was many years in the making, and followed on from the company's desire to capture as much value as possible for the nickel-in-concentrate it sold.
“Over three years ago, Western Areas recognised Tsingshan as an innovator in the production of stainless steel and since then we have developed a close working relationship through the sharing of technical knowledge and many site visits,” Lougher said.
Tsingshan is reportedly the largest consumer of nickel products in China, using some 25% of the country’s yearly nickel consumption.
“Tsingshan is clearly leading the charge in China to produce a greater proportion of the higher quality 300 series stainless steel products, which contain up to four times the amount of nickel than 200 series stainless does.
“With this in mind, it has been a specific Western Areas strategy to innovatively position itself in the stainless steel supply chain, with the ultimate objective of delivering a stronger bottom-line to our shareholders through investigating nontraditional markets and thereby capturing a greater share of the value of the nickel we produce.”
Lougher said the company was also finalising discussions with another third party in relation to a further 10 000 t offtake contract.