Monday, March 26, 2007

Nickel acquisition Swiss mining company Xstrata announced it would buy Canadian nickel miner LionOre Mining International Ltd. The deal is for $4 billion. LionOre has operations in Western Australia, South Africa, and Botswana. It owns a gold mine in Australia, and it also has byproduct operations in copper, cobalt, and platinum. Nickel is now selling at a record price, thanks in part to Chinese demand. In 2001 nickel sold for around $2 a pound. Its current price is $22 a pound. Nickel is especially used in the manufacture of stainless steel. Xstrata already increased its nickel holdings by its 2005 purchase of Canada-based Falconbridge for $20 billion, with its Norwegian, Canadian, and Dominican nickel operations. The LionOre acquisition would make it one of the top three nickel companies in the world. Brazil's Cia. Vale do Rio Doce, after buying Canada's Inco Ltd. for $17 billion in 2006 to is the world's largest nickel producer, Russia's Norilsk Nickel is second, and BHP Billiton is third. Some believe that the $4 billion offer is only the first bid in a heated market where the top players in mining are greedily grabbing up the last remaining assets. 6:13:15 PM

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