The world’s largest nickel supplier suggests it won’t restart idle capacity until prices reach $25,000 per ton; nickel demand is projected to outstrip supply for the first time in four years; and, Brazilian producer Vale’s Canadian plans may be on hold.

Nickel investors collectively held their breath Thursday morning as prices stumbled slightly to $9.45/lb hours after opening at $9.70/lb. But later in the day prices rallied and nickel closed at $9.66/b, recovering most of its losses.

Nickel prices have been increasing steadily over the last year and are trading just below $22,000 a ton.  That’s a 15 per cent rise and more than double its value in the fourth quarter of 2008. But, numbers like these are little comfort to nickel investors– not after watching prices hit historic highs in February 2007 only to be followed by a serious tumble.

Anton Berlin, director of marketing at the world’s top nickel producer, Norilsk Nickel, which suspended its operations in Australia when the economic crisis shredded demand, thinks prices will climb higher before miners restart any more idle capacity.

“I wouldn’t expect another wave of re-launches until the price is substantially higher. I’m guessing it should be at least $23,000 to $25,000 (a ton),” That means another five-percent increase before idle capacity comes back on line.

Berlin says nickel producers are wary of a slow rebound in demand for stainless steel and that investor interest in commodities was playing a large role in setting metal prices. “Re-launching a mine is a capital investment. You have to spend a certain amount of money to start it again,” he said. “If the price goes to $25,000 tomorrow, you are not going to open the mine because you want to understand that a certain price level will stay.”

Berlin did not comment on Norilsk’s future operational plans, but his statements seem curious after Norilsk released numbers with increased nickel production for 2010, raising its output forecast for this year up to 309,000 tons from a previous outlook of 300,000 tons.

With stainless-steel makers’ reported increase in orders and production, London-based research group CRU says there will be a nickel deficit for the first time in four years. With a 20,000-ton shortfall forecast for 2010 after a 45,000-ton surplus last year, demand may continue to push nickel prices higher.

Vales’ Canadian Plans on Hold

Brazilian miner Vale [NYSE:VALE] has said it will push its Sudbury operation in Canada towards full output; but talks broke down this week after many thought the two sides were close to a deal—those plans may need to be shelved.

Workers at Vale’s Canadian operations have been striking since July 2009 after the company purchased Inco in late 2006 for $17.6 billion.

Vale argues nickel producers in other parts of the world, mostly in low-wage developing countries, have a competitive advantage over Canadian operations and wants to address a bonus linked to the nickel price that the union accepted during the 1980s in return for giving up annual wage increases. Vale says the deal made economic sense when nickel was in the $4,000-$7,000 ton price range, but not at today’s prices.

Vale wants to raise the threshold at which the Sudbury workers become eligible for the nickel bonus and to convert the employee pension plan from a defined benefit to a defined contribution model.

The press release is quoted as saying:

Crowflight Minerals Inc. (TSX:CML) is a Canadian junior mining company that owns the Bucko Lake Nickel Mine near Wabowden, Manitoba. The Company is also focused on nickel, copper and Platinum Group Mineral (PGM) projects in the Thompson Nickel Belt and Sudbury Basin.

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Click here to access Crowflight Minerals Inc Corporate Site

The press release is quoted as saying:

The sulphide plant is forecast to produce approximately 24 million pounds of copper, 6,000 ounces of gold and 380,000 ounces of silver in concentrate during 2010. The oxide plant is expected to produce approximately 9,000 ounces of gold and 100,000 ounces of silver in precipitate which will be smelted and refined into dore bars.

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Click here to access GlobeStar Mining Corporate Site

The press release is quoted as saying:

Diamond drilling commenced at Sandstone in early March to follow up anomalous nickel results intersected in shallow drilling in four different areas (Areas A to D). The previous results were reported in the December Q 2009 activities report. Areas A to D occur along a greater than 7km long belt in the southern part of the Sandstone JV tenements (Figures 1 and 2). There is minimal outcrop or previous drilling along this belt and the intersection in WAD 002 is the first known significant occurrence of nickel sulphides reported at Sandstone.

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Click here to access Western Areas Corporate Site

The press release is quoted as saying:

Under the direction of RIO, GGL has contracted Aurora Geosciences Ltd. (”Aurora”) to conduct the gravity surveys. Approximately ten drill holes are planned for the March/April drill program. The drill targets have been and will be selected from the results of this year’s and last year’s ground gravity surveys as well as data from GGL’s previous airborne/ground geophysical surveys, indicator mineral sampling and diamond drilling. GGL is a Canadian mineral exploration company whose present focus is on its gold, copper-gold, nickel, VMS and diamond properties located in the Northwest Territories and British Columbia, Canada.

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Click here to access GGL Resources Corporate Site

The press release is quoted as saying:

These results represent two new discoveries and are highlighted by hole NCA10-02 drilled at Nueva Caledonia that intersected 8.4 meters grading 1.79% nickel, including 2.7 meters grading 2.25% nickel and hole NCO10-01 drilled at Nueva Concepcion that intersected 22.6 meters grading 1.56% nickel, including 9.6 meters grading 1.98% nickel.

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The press release is quoted as saying:

Benton is a Canadian based junior with multiple joint ventures and a diversified property portfolio in Gold, Nickel, Copper, and Platinum group elements. The company currently has approximately $13 million in cash, owns approximately 36.3% interest in Coro Mining Corp (TSX:COP), holds an approximate 5% interest in Marathon PGM Corp (TSX:MAR) and retains a 2% Net Smelter Royalty on the northern portion of the Marathon PGM deposit.

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Click here to access Benton Resources Corporate Site

The press release is quoted as saying:

Dr. Fedikow was appointed to the Board of Directors in April 2008 and has been directly involved in all aspects of the Company’s exploration activities since that time. Mark has 34 years of mineral exploration experience as an exploration geochemist and mineral deposits geologist in private industry and government geological surveys.

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Click here to access VMS Ventures Corporate Site

The press release is quoted as saying:

The PA recommends open pit mining, milling at a rate of 87,000 tonnes per day, conventional flotation, and Outotec’s chloride leach process followed by on-site nickel solvent extraction – electrowinning (SX-EW) metal refining. With a base case long term price of $8.50 per lb nickel and $17.50 per lb cobalt (all financial data are U.S. $), the study shows the project has a pre-tax Net Present Value of $819 million using an 8% discount rate. The mine would recover 1.88 billion pounds of payable nickel at an average “life of mine” strip ratio of 0.74 to 1 with an overall refined nickel recovery of 52.8% over 24.4 years.

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Click here to access Hard Creek Nickel Corporate Site

The press release is quoted as saying:

The M11A North deposit is located four kilometers north of the Bucko Lake Nickel Mine and milling operations located near the town of Wabowden, Manitoba. Results for the final 5 of 18 holes are presented below. Highlight intersections from the final results include 5.20 metres grading 1.82% nickel in Hole M09-15 and 4.33 metres grading 2.71% nickel in Hole M09-18.

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Click here to access Crowflight Minerals Corporate Site