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Poseidon Nickel Is in China Talks to Fund Australian Project 

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BEIJING, May 28 -- Poseidon Nickel Ltd., an Australian exploration company chaired by billionaire Andrew Forrest, is in talks with a number of potential Chinese investors to fund restart of mine production within two years.
&quot;We are talking to investors and off-take parties in China about the investment required to get us to go to production,&quot; David Singleton, chief executive officer of the Perth-based company, said in an interview in Shanghai.
Chinese companies are scouring the globe to secure raw materials to feed the world's fastest-growing major economy, targeting mining companies in need of funds. Poseidon is seeking between $50 million and $100 million for its Mt. Windarra project, which will supply stainless steel makers in China.
&quot;One of the really powerful combinations in China is strategic investors, people who are already in the industry, coupled with investment from state-owned banks,&quot; Singleton said in the interview.
Poseidon Nickel rose 2.2 percent to 23.5 cents on the Australian stock exchange at 11:18 a.m. Sydney time, narrowing this year's decline to 2.1 percent.
Poseidon changed its name from Niagara Mining Ltd. in 2007 after Forrest was bought in as chairman. He named the company after Poseidon NL, which began Australia's nickel boom in the 1970s after discovering the metal at Mt. Windarra. Niagara bought the Mt. Windarra site from WMC Resources Ltd. in 2005.
Concentrate Plant
The company plans to build a plant at Mt. Windarra in Western Australia to turn ore into concentrates, Singleton said. The company is &quot;strongly looking at the possibility of using equipment sourced in China,&quot; he said. It will have the capacity to process as much as 800,000 metric tons of ore a year, he said.
Poseidon found deposits containing 100,000 metric tons of nickel, or 5 million tons of ore, and the amount may increase by three-times in the next few years with drilling, Singleton said.
Nickel prices have dropped 22 percent from this year's high of $27,595 a ton on April 16 on speculation European efforts to curb government debt will erode economic growth and China may step up measures to reduce asset bubbles. It traded at $21,650 at 11:53 a.m. Sydney time.
&quot;Most of the nickel producers in the world are very profitable,&quot; Singleton said. A price of between $7 and $9 a pound, or between $15,430 and $19,840 a ton, is a &quot;very sustainable number,&quot; he said.
Poseidon suspended restoration work on Mt. Windarra in October 2008 because of turmoil in global financial markets. This work has resumed and was 20 percent complete, the company said last month. The company is bringing the mine up to current safety standards and eliminating the water that has accumulated since its closure in 1991.
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