LionOre suitor forecasts nickel supply deficit

| Tuesday May 8, 2007 00:00

 

'In the circumstances when a number of sizable projects in the industry are delayed, we do not see enough supply to cover the expected demand,' he said in an e-mail interview.

On May 3, Norilsk announced a takeover bid for Canada's LionOre Mining, which comfortably topped a prior bid by diversified mining giant Xstrata.

Xstrata had the option to match, or better, the bid within five working days of having received formal notification from LionOre.

Analysts expected Xstrata to lodge another bid, which could lead to a bidding war for the nickel producer with operations in Botswana, South Africa and Australia.

Asked if Norilsk would consider bidding higher, should Xstrata up the ante, Usanov said that the firm would consider it, but would act in shareholders' best interests.

'We will consider all options available to us at that time and make a decision in the best interests of our shareholders,' he said.

Usanov further added that Norilsk could also be interested in other acquisitions.

'We are constantly monitoring opportunities around the world, in case we find something that makes sound strategic and financial sense for us,' he said, regarding the company's plans.

Nickel, used in stainless steel, is currently in tight global supply. Russia boasted some 40 percent of the world's known resources at the Norilsk deposit in Siberia.
(Mining Weekly Online)