TMH Market Open: Another nickel blow to start the week, as big players crumble under price pressures

The ASX200 is set to open about .4 of a per cent higher this morning following a strong US lead from last Friday.            

In key news this morning, more jobs are set to go as the nickel industry continues to crumble. Poor demand and depressed pricing are now impacting big players including Andrew Forrest’s private company Wyloo Metals.

The AFR this morning reports it’s putting its operations near Kambalda on care and maintenance from the end of May.

Wyloo only bought the operations through the $750 million acquisition of Mincor Resources barely six months ago with plans for 50 years of production.

The operations have employed more than 200 workers.

The decision could impact BHP (ASX:BHP) as it runs Kambalda’s concentrator.

Andrew Forrest’s move follows Panoramic Resources (ASX:PAN) and TSX-listed First Quantum’s decisions to cease mining nickel in WA this month.

But as those companies shift out of nickel, another company is moving in.

Xanadu Mines (ASX:XAM) only this morning announced it’s entered into a binding term sheet to earn up to 80 per cent interest in two copper and nickel sulphide projects in Mongolia.

Another stock to watch this morning is Lynas Rare Earths (ASX:LYC) as it releases a drilling report from 30 diamond drill holes targeting below the company’s existing Mt Weld Rare Earths open pit mine. It has also released its December activities update, which shows its output was halved due to a temporary shutdown to its Malaysian separation plant.

To the $ and commodities…

One Australian dollar is buying $65.9 US cents.

Iron Ore is up half a per cent to US$129 a tonne.

Oil is lower at US$73.25 a barrel.

Gold is at US$2028.48 an ounce.

Natural Gas is down at US$2.51 for a million British Thermal Units.