Economy & Business - March 2005

Nickel: The Dominican Republic reported that its nickel exports in 2004 were worth US$154m, up 65% on 2003. The surge in nickel prices, driven by China's demand for the metal, prompted Falconbridge Dominicana (Falcondo), the DR's only nickel producer, to increase its output to 29,476t, up from 27,292t in 2003. In 2003 production had surged by 23% from the 22,117t produced in 2002. The export price of the metal increased from US$3,424 per tonne in 2003 to US$5,232 in 2004, the central bank reported. The Dominican Republic is the world's ninth-biggest producer of nickel. Falcondo has been producing nickel from its two mines in the north, Bonao and La Vega, since 1972. Falcondo, which is owned by the Canadian mining company, Falconbridge (which in turn is controlled by Noranda, another Canadian mining company), has no compunction about shutting down production in the DR when nickel prices are weak. There are signs that the orebody is become lower grade as the mines go deeper. The fact that Falcondo was able to increase output by only 8% when prices had surged by 50% suggests that the mine is past its peak. Falcondo says that there is still enough ore for its mines to continue for another 15 or 20 years. Around 1,400 people work at the two mines. China Minmetals had been reported to have been interested in buying Falcondo before Noranda did.

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