European Nickel says its Caldag project could be delayed by up to six months awaiting an environmental permit while the Turkish cabinet is reshuffled. The start of full production could be pushed back until the end of 2008 from previous estimates of mid-year, a senior company official told Reuters late on Monday.
A new Environment Minister may decide to review a longstanding application to fell trees, which must be removed to install equipment at the mine in western Turkey.
"We're pretty sure the minister will be changed and he will need time to consider," European Nickel's finance director Andrew Lindsay told Reuters in an interview.
"If everything goes quickly we could receive the permit by September, but if they start looking at it again it may be longer," he added. "If we get the permit by September we could start full scale construction in the last quarter and actual production could then start by the end of 2008," he said.
In May, Lindsay told Reuters ongoing delays in securing the permit would hold up production until the second quarter of next year. Caldag is designed to produce 20,4000 tonnes per year of industrial metals nickel and cobalt. While the company awaits the permit it continues to mine small amounts of nickel ore which it sells to a Greek smelter for processing. Lindsay said a sharp fall in nickel prices in the past three months has hurt profit margins.