Estimation of operating costs in the nickel production industry requires a
detailed analysis of material flows from mine to smelter to refinery.
Despite the small number of nickel producers compared to other base
metals, the existence of two very different ore types (sulphide and laterite)
and a wide variety of mining and processing technologies make the
identification of these flows of critical importance if an accurate global
picture is to be obtained. Smelting and refining processes in nickel
metallurgy have evolved with a high degree of adaptation to specific
operating conditions in different locations. Overall costs are calculated
by combining individual cost elements for each unit in production chains
from mine to saleable metal product. The average cost of western world
primary nickel production in 1995 was US$2.07/lb ($4560/tonne).
Average operating costs remained virtually unchanged in the three years
to 1995 after an 8.5 per cent fall in 1993, but a 3.9 per cent increase to
$2.15/lb is expected for 1996. A major factor in this rise results from the
lower prices of copper and cobalt this year, reducing the by-product
credits available to major producers.