×

UPDATE 1-First Quantum to shutter Australia nickel mine in September

(Adds number of employees, contractors, mine location)

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, affecting around 450 employees and contractors.

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."

Vancouver-based First Quantum said the latest shutdown at the mine, located 500 kilometers (312 miles) southeast of Perth, would cost an estimated $10 million. Subsequent annual maintenance is expected to cost around $5 million.

Ravensthorpe produced 23,624 tonnes of nickel in 2016.

Shares in First Quantum, which primarily produces copper, fell on the news, ending 4.6 percent lower at C$13.41 on the Toronto Stock Exchange.

Nickel prices are off by nearly two-thirds since early 2011, weighed down by a supply glut. Ravensthorpe resumed operations that year after it had been shut down by its previous owner BHP Billiton Ltd in 2009, when nickel prices also dropped.

First Quantum bought Ravensthorpe from BHP in 2010 for $340 million.

Of the 450 people working at the Ravensthorpe site, roughly half are direct employees and the rest contractors, company spokeswoman Sharon Loung said in an email.

The permitting process for the Shoemaker Levy orebody at Ravensthorpe would carry on along with regular reviews of market conditions for a potential restart of the mine. (Reporting by Nicole Mordant in Vancouver, editing by G Crosse)