Perth-based nickel miner Western Areas says it will produce more ore for less cost as it upgrades its guidance by more than 2000 tonnes.
The miner announced it expected to produce 25,000 tonnes of nickel in concentrate this financial year at a cash cost of less than $2.70 a pound.
Previous guidance set production at 23,000-24,000 tonnes at $2.80-$2.90 a pound.
The announcement comes ahead of the company’s half year financial results which will be released next week.
Managing director Dan Lougher said the guidance upgrades were a direct result of the company’s continuing strong performance.
“They are a testament to the operational team’s hard work and focus on numerous small and large projects across the business which enhanced both productivity and output,” he said.
Western Areas owns two mines in the Forrestania region, near the WA Goldfields.
"Whilst we have been able to improve our cost profile with the cooperation of major service providers, our commitment to stringent and disciplined cost management remains core to our business ethic at Western Areas," Lougher said.
According to IBISWorld reports, the nickel market is set to grow this year following two years of serious gloom for the sector.
Western Areas CFO Joe Belladonna explained that this is mostly likely due to the forecast squeeze on global nickel supplies, particularly as the higher grade, easier to process nickel sulphide supply swindles.
"Nickel laterites and nickel pig iron are not capable of filling this sulphide void at a time [when]the metal is increasingly being recognised and sought for its strategic application in stainless steel and other products with extraordinary performance characteristics," Belladonna said.
The company posted $14.65 million in earnings before tax in the second half of the 2013 financial year.