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WMC, Jinchuan in $650m nickel deal
SYDNEY, Australia (CNN) -- Australian miner WMC Resources is to supply nickel worth Aust. $1 billion ($650 million) over six years to China's largest nickel producer, Jinchuan Group. WMC chief executive Andrew Michelmore said Tuesday the agreement strengthened the company's 15-year relationship with Jinchuan in what is the world's fastest growing nickel market. Tuesday's agreement is for 90,000 tonnes of value-added nickel-in-matte, and adds to a 30,000-tonne agreement signed with Jinchuan last December. WMC Resources, the world's third largest nickel producer, was formed last December from the demerger of Australian resources pioneer WMC. Under that demerger, WMC's 40 per cent stake in its Alcoa World Alumina and Chemicals joint venture with Alcoa was spun off into a new company, Alumina Ltd. Jinchuan Group is China's largest integrated nickel producer for the domestic market. Its annual output of 60,000 tonnes accounts for 88 percent of Chinese production. In a statement released to the Australian Stock Exchange Tuesday, WMC said it would export 120,000 tonnes of nickel matte to Jinchuan between 2005-2010 from its Kalgoorlie nickel smelter in Western Australia. It said that when refined, this nickel matte would represent more than 20 percent of China's total domestic production of nickel metal to 2010. Nickel matte, which is about 68 percent nickel, is created following concentration and smelting of nickel ore. WMC, which has copper, uranium and fertilizer assets along with its nickel operations, earlier this month reported a first-half net profit of Aust. $47 million and said its second quarter was likely to be better. Shares in WMC Resources are 2.6 percent lower at A$4.07 in Tuesday afternoon trade. The broader market is down about 0.2 percent.
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