DJ Eramet Applies To Mine New Caledonia Nickel Deposit

SYDNEY, Jul 30, 2008 (Dow Jones Commodities News via Comtex) -- ERMAF | Quote | Chart | News | PowerRating -- La Societe Le Nickel, or SLN, Eramet S.A.'s (13175.FR) subsidiary in New Caledonia, Thursday said it has lodged an application to mine a giant nickel deposit on the French-controlled island in the South Pacific after a French court in May annulled a permit held by Brazil's Companhia Vale do Rio Doce (RIO).

Last month, New Caledonia's president, Harold Martin, said he would like to see permits to mine the Prony West laterite deposit awarded to SLN. The deposit holds about 4 million metric tons of nickel ore.

SLN said it wants to establish a heap leach mining operation at the site, which will also be able to process lower grade ore from its existing Thio and Kouaoua mines.

Vale had obtained the permit via its takeover of Canada's Inco in 2006. The regional council of southern New Caledonia awarded the permit for Prony West in 2003 in controversial circumstances.

New Caledonia holds about a third of the world's known nickel resources.

In the region, Vale is hoping to start production at the 60,000-ton Goro mine, while Xstrata PLC (XTA.LN) is progressing with plans for another large project - the 60,000-ton Koniambo nickel mine and smelter.

Eramet is the majority owner of SLN with a 56% stake, while New Caledonia's regional councils own 34% and Japan's Nisshin Steel the rest.

-By Elisabeth Behrmann, Dow Jones Newswires; 61-2-8235-2965; elisabeth.behrmann@dowjones.com

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(END) Dow Jones Newswires

07-30-08 2024ET

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