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Category: Mining (Rural) / Rural / Mining Industry / Industry

Tasmanian nickel mine deal raises hopes of restart

Wednesday, 28 Sep 2016 14:51:49 | Damian McIntyre

There are renewed hopes for reopening the Avebury nickel mine on the west coast. (Supplied)

A new buyer has emerged for the mothballed Avebury nickel mine near Zeehan on Tasmania's west coast.

The mine has been on care and maintenance since 2009 after a drop in nickel prices.

Mine owner MMG has entered into a $25-million share sale agreement with Tasmanian company Dundas Mining.

Wayne Bould from the Minerals and Energy Council said he was optimistic the mining operation would restart.

"As I understand it, the proponent Dundas has every intention of opening the mine, and that's why they've made the offer," he said.

"They have a desire to get the correct approvals in place and reopen it, and be in production as soon as they possibly can, likely 12 to 18 months."

He said it could create up to 50 jobs.

"It's a very good outcome for us," he said.

"Times are still not easy, and so for somebody to take on the risk and reward of that mine at this stage is really very encouraging."

A sale fell through last year but Mr Bould is confident it will proceed this time.

"I think the economics have changed slightly," he said.

"As always it's risk and reward, and the price of nickel has recovered to a degree which looks like it's going to stay in a long-term state, roughly where it is now."

Avebury nickel mine Photo: The company had been hoped to open the mothballed Avebury nickel mine in 2014. (Supplied: MMG)

The sale is subject to a number of conditions including MMG Board approval.

The sale agreement will be finalised only when the full payment of $25 million is received, expected by the end of the year.

MMG's general manager of Australian operations Rick Watsford said it was the best outcome.

"Dundas Mining is committed to a restart of the mine, and MMG is confident that the sale will reinvigorate the Zeehan area, by providing new jobs and economic benefit to the region," he said.

The Resources Minister Guy Barnett said the announcement highlighted growing confidence in the mining industry.

"While the agreement announced by MMG today is a major step forward, we know there is a long way to go before the Avebury mine can resume operations."

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