Asian Mineral says Vietnam hikes nickel tariff at critical stage

Wednesday 23rd July 2008

Asian Mineral Resources, a Toronto-listed mine developer, said the Vietnam government has hiked the tariff on nickel exports at a critical stage in the financing of its Ban Phuc Nickel Project.

AMR is the biggest investment of New Zealand's Widespread Portfolios, which owns a 7% stake, amounting to 66% of total investments. Widespread stock fell 4.2% to 46 cents on the NZX.

AMR Minerals has sought discussions with Vietnamese officials to attempt to rescind the levy. It needs US$38.5 million to complete construction of Ban Phuc and is in negotiations to secure as much as US$45 million, it said in a statement to the Toronto Stock Exchange yesterday.

"We were very surprised and disappointed by the sudden large and unexpected increase," AMR chairman Jim Askew said. The increase came "at a critical stage of project development."

China makes up almost a quarter of global demand for nickel, which is used in the production of stainless steel. Prices for the metal may fall for a second year amid higher-than-expected supply and a trend by mills to produce products with lower nickel content.

AMR said the project, which gained a mining license last December, is on schedule to begin producing nickel concentrate in the second quarter of 2009. It owns 90% of the project.

Widespread, managed by Chris Castle, completed a one-for-50 share consolidation this month, lifting its stock out of penny-dreadful status as it hadn't traded above four cents since listing in 2003. Castle has said the consolidation may make the stock more attractive to institutions.

By Jonathan Underhill

Comments from our readers

No comments yet