“Norilsk Nickel” MMC, Moscow, Russia

A. V. Kolmakov, Chief Specialist, phone: +7 (496) 567-70-70

This article examines marketing strategy of Australian nickel producer Western Areas NL. As sole producer of nickel concentrate the company has to built its marketing strategy on a steadily basis taking into account the current conditions on the world nickel market and real demand from nickel concentrate consumers. An articulated policy of hunting for potential clients make possible for Western Areas to supply nickel concentrate on Chinese market. The significant volume of company's production is oriented on domestic Australian market for sales diversification. The off-take agreements signed with world nickel industry majors provide stable sales of Western Areas production. The supplies of nickel concentrate to BHP Billiton smelters were closely linked to the credit lending for Western Areas that later was used for further company's business development. The use of sales’ hedging as financial instrument is aimed at minimizing possible financial losses from sales in the case of unfavorable market conditions. The unique experience of Western Areas business activity shows how the ordinary sole producer of semi-product can obtain the relevant niche on the world nickel market. The marketing strategy of Western Areas leaves opportunity for creating a joint venture with any relevant partner or filling the needs of nickel refinery factories with high-grade nickel concentrate. Apart from Flying Fox nickel deposit exploration Western Areas possesses the set of small and medium-scales nickel deposits with nickel content reasonable for further exploration. Some practical aspects can negatively affect Western Areas. Its’ profitability mainly depends on customers’ production capacities need in nickel concentrate. The fact that both BHP and Jinchuan have nickel deposits of their own can make them looking for Western Areas concentrate according to the residual principle. Unaccomplished vertical integration (due to the absence of refinery capacities) does not generate super profit from finished goods sales. The sales diversification is insufficient due to the small number of stable customers.

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