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Asian Mineral says Vietnam hikes nickel tariff at critical stage

Wednesday 23rd July 2008

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Asian Mineral Resources, a Toronto-listed mine developer, said the Vietnam government has hiked the tariff on nickel exports at a critical stage in the financing of its Ban Phuc Nickel Project.

AMR is the biggest investment of New Zealand's Widespread Portfolios, which owns a 7% stake, amounting to 66% of total investments. Widespread stock fell 4.2% to 46 cents on the NZX.

AMR Minerals has sought discussions with Vietnamese officials to attempt to rescind the levy. It needs US$38.5 million to complete construction of Ban Phuc and is in negotiations to secure as much as US$45 million, it said in a statement to the Toronto Stock Exchange yesterday.

"We were very surprised and disappointed by the sudden large and unexpected increase," AMR chairman Jim Askew said. The increase came "at a critical stage of project development."

China makes up almost a quarter of global demand for nickel, which is used in the production of stainless steel. Prices for the metal may fall for a second year amid higher-than-expected supply and a trend by mills to produce products with lower nickel content.

AMR said the project, which gained a mining license last December, is on schedule to begin producing nickel concentrate in the second quarter of 2009. It owns 90% of the project.

Widespread, managed by Chris Castle, completed a one-for-50 share consolidation this month, lifting its stock out of penny-dreadful status as it hadn't traded above four cents since listing in 2003. Castle has said the consolidation may make the stock more attractive to institutions.

By Jonathan Underhill

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