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Australia’s Nickel Mines Ltd dropped its A$18 million ($13.24 million) share purchase plan (SPP) on Friday, in the wake of market volatility caused mainly by Tsingshan Holding Group’s short squeeze.
The announcement came two days after the miner had noted reports on short positions held by China’s Tsingshan Holding Group in London Metal Exchange (LME) nickel, sending its shares down by 13% on Thursday.
Tsingshan is one of the world’s biggest producers of nickel and holds a 6.2% stake in Nickel Mines through a unit.
Nickel prices had shot up to record levels earlier this week, after Tsingshan bought large amounts of nickel to reduce its short bets on the metal, forcing the LME to halt trading.
Applications for the share purchase had far exceeded the company’s target to about A$57 million, Nickel Mines Managing Director Justin Werner said in a statement.
“However, given market volatility and the retraction in the company’s share price in recent days… it is in the best interests of shareholders to cancel the SPP effective immediately and return all applications in full,” Werner said.
Shares of Nickel Mines rose as much 7% in early trading, recouping some of the losses suffered earlier in the week.
($1 = 1.3596 Australian dollars)
(By Indranil Sarkar; Editing by Subhranshu Sahu)
2 Comments
Mike Buenos
The next shock to the NPI/RKEF plants in Indonesia will be the shortage of high grade saprolite ore (>1.7%Ni) to operate the plants at capacity. A country with 20% of the world’s Ni laterite resource cannot sustain the supply of 40-50% of the world’s Ni production for very long. Expansion of NPI/RKEF plants in Indonesia to 2Mtpa Ni capacity within a few years should be reconsidered. Indonesia should focus on HPAL/LPAL plants as the limonite Ni resource is much larger than the high grade saprolite resource.
Frik Els
Interesting comment, thanks Mike. Overall, which do you believe has the biggest environmental impact, energy requirements. Can you still get deep sea tailings permits in Indonesia?