THE BOURSE WHISPERER: Western Areas (ASX: WSA) has negotiated and entered into a new Offtake Contract with BHP Billiton Nickel West.
Western Areas stressed this is a new contract and not an extension of the previous arrangement between the two companies, which will be completed on 31 January 2017.
The key terms of the Contract include:
1. Contract Period – The earlier of three years from 1 February 2017 or the completion of the aggregate quantity;
2. Quantity – up to 10,000 tonnes of nickel contained in concentrate per annum with a 30,000 tonne aggregate limit; and
3. Delivery – Bulk logistics to Kambalda Other commercial terms of the Contract are in line with industry custom.
“Western Areas has a strong fundamental belief in the long term sustainability of nickel production in Western Australia and the execution of this three year contract demonstrates our vision of a positive future,” Western Areas managing director Dan Lougher said in the company’s announcement to the Australian Securities Exchange.
“Nickel West is a quality partner and the relationship developed over the prior seven years is stronger than ever.
“Both parties will benefit from this new contract, due to the high reliability, quality and consistency of supply from our Forrestania operations.”
Western Areas indicated the new contract with Nickel West will require no changes to the existing bulk logistics infrastructure already in place.
From 1 February 2017, Western Area’s offtake expiry profile will be as follows:
1. Tsingshan Group – 10,000 tonnes per annum of contained nickel expiring around 31 January 2020;
2. BHP Billiton Nickel West Pty Ltd – up to 10,000 tonnes per annum of contained nickel expiring around 31 January 2020; and
3. BHP Billiton Nickel West Pty Ltd – 2,000 tonnes per annum of contained nickel expiring around 30 June 2019 (commonly referred to as the Lounge Lizard Agreement).