April 23, 2012–Seeking Alpha
The falling nickel prices bring expansion efforts like Vale’s exploration in the far north, First Nickel’s attempts and Rio Tinto’s Kennecott Eagle Mine on Michigan’s Upper Peninsula into question. If between 5% and 8% of current nickel production is unprofitable, as Mr. Sprogis claims, how are these new projects supposed to make money?
The Kennecott Eagle, with its mile-long tunnel, is obviously one of the most questionable mining projects out there. On this website, Rio Tinto (RIO) admits that Kennecott, which won’t even open until next year, will cost $469 million. Kennecott will only be in business for 7-8seven to eight years, but it is supposed to produce 300 million pounds of nickel and 250 million pounds of copper.
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