Xstrata Extends Falcondo Nickel Operations Shutdown, Low Prices
The Zug-based company suspended Falcondo in August, citing high oil prices and sliding nickel prices, with a review of the closure due after four months.
"A feasibility study is currently underway at Falcondo to examine the potential to convert the operation's energy source from oil to a viable alternative," Xstrata said in the statement.
About 30% of Falcondo's full-time employees will keep their jobs to provide care and maintenance and operate the power plant that produces energy to the Dominican Republic grid. About 900 employees will be laid off.
"Despite evaluating various alternatives for the Falcondo operation during the temporary suspension of operations, it is not economically viable to restart operations," said Ian Pearce, chief executive of Xstrata's nickel division.
Nickel prices on the London Metal Exchange have plummeted from over US$30,000/ton at the start of the year to five-year lows of below US$10,000/ton, choking the industry and prompting widespread mine closures that so far haven't had much of a positive impact on prices.
LME nickel for three-month delivery closed at US$9,250/ton in London, up US$50 on the previous afternoon kerb.
-By Elisabeth Behrmann, Dow Jones Newswires;
61-2-8235-2965; elisabeth.behrmann@dowjones.com
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(END) Dow Jones Newswires
December 04, 2008 17:22 ET (22:22 GMT)
Publié le 04 Décembre 2008 Copyright © 2008 Dowjones
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