VANCOUVER, Aug 9 (Reuters) – First Quantum Minerals Ltd said on Wednesday it plans to suspend operations at its Ravensthorpe nickel mine in Western Australia at the beginning of next month due to persistently weak nickel prices, sending its shares lower.
The mine will be placed on care and maintenance, which is expected to take effect in early October, it said.
“This decision is disappointing to us,” First Quantum Chairman and Chief Executive Philip Pascall said in a statement, blaming “continuing depressed nickel market conditions, over some years.”
Shares in First Quantum, which also produces copper, ended down 4.6 percent at C$13.41 on the Toronto Stock Exchange.
Nickel prices, weighed down by a supply glut, are off by nearly two-thirds since early 2011, the year Ravensthorpe resumed operations after it had been shut down by its previous owner BHP Billiton Ltd in 2009, when nickel prices also dropped.
Vancouver-based First Quantum said the latest shutdown would cost an estimated $10 million. Subsequent annual maintenance is expected to cost around $5 million.
The permitting process for the Shoemaker Levy orebody at Ravensthorpe would continue along with regular reviews of market conditions for a potential restart of the mine.
First Quantum bought Ravensthorpe from BHP in 2010 for $340 million.
(Reporting by Nicole Mordant in Vancouver; Editing by Will Dunham)