Nickel investors have been on a wild ride in 2014.
Indonesia, supplying more than a fifth of global exports, surprised the mining world in January by putting into effect an outright ban on nickel ore exports.
Initially record warehouse inventories, massive stockpiling by Chinese nickel pig iron producers and growing mine supply kept a lid on the price which was languishing at near five-year lows below $14,000 a tonne at the start of the year.
The Asian nation, against expectations, stuck to its guns and the ban, in combination with fears that tensions with Russia could affect supply from top miner Norilsk, eventually sent the price above $20,000 in May.
But as LME stocks continued to rise and the Philippines – the only other source in the region of high-grade laterite ore required by China and responsible for 9% of global mine supply – took up some of Indonesia's slack, supply worries subsided and the price tanked again, nearly wiping out all 2014's gains.
Prices are now back above $16,500 on the back of dwindling stockpiles in China and expectations of robust demand from steelmakers in the US, China and the EU. And most forecasts for next year and beyond are optimistic with few bottom of the range predictions going below $20,000.
During all this tumult in the nickel industry, a small Toronto-headquartered firm called Asian Mineral Resources (CVE:ASN) was quietly establishing Vietnam’s first nickel complex on the doorstep of the world’s number one consumer of the steelmaking ingredient.

AMR’s Ban Phuc nickel mine and plant – one of the world’s few new sources of nickel sulphide – went into commercial production in June last year, but the project has a much longer history.

The company listed on the Toronto Venture Exchange as long ago as 2004 and by 2006 had produced a feasibility study and received a mining license.
But a combination of a hike in concentrate export tariffs by Vietnamese authorities from 5% to 20%, a global slump in the price and a typhoon that hit the mine site located 160km west of the capital Hanoi, scuppered the project.

By 2009 AMR had revived Ban Phuc and in 2012 a cash injection by resources investment firm Pala to take a majority stake saw the creation of a nickel-copper-cobalt operation with a 400,000tpa capacity.
Ban Phuc currently produces 6,400 tonne nickel, 3,200 tonne copper and 200 tonne cobalt as a byproduct which is set to expand to 9,900 tonnes of nickel equivalent next year.
The main benefit of sulphide ores like those at Ban Phuc which was built for just $34 million, is low-cost separation and concentration through a simple flotation system. A cost effective plant and the fact that the Ban Phuc workforce is 92% local translates into some of the lowest all-in costs in the industry at $6.68 a pound.
CEO Evan Spencer, who took the helm at AMR at the start of the year, says the company’s development plans has a strong focus on exploration: "We not only want to extend Ban Phuc, which lies in the Song Da rift zone, but also regional targets with 16 already identified in its 50km2 exploration licence within the 150km2 concession."

The Song Da rift hosts a number of projects and a producing mine extending into neighbouring China over 200km from Ban Phuc. What’s more the geotectonic setting is similar to major nickel-copper-PGE deposits worked by Norilsk’s and Jinchuan [China’s largest nickel miner], says Spencer, adding that drilling has hit platinum grades of 2-3gpt.
Another potential game changer for the company is the building of a smelter, already in initial design phase, with the backing of the Vietnam government.
A refinery which would cost in the region of $30 million to construct will reduce export tariffs from the current 20% for nickel concentrate to 5% for nickel matte, lower transport costs and boost process recoveries.
Spencer says the company “has only scratched the surface” of what’s possible in Vietnam and does not rule out in-country M&A activity:
“The government has been very supportive of the project and our expansion plans within a maturing legislative environment. And one tends to forget that Vietnam is a market of more than 90 million people. The potential is vast.”