China's two largest nickel miners are accelerating the pace of overseas acquisitions, signaling bright prospects for the nickel market in the second half of the year.

China's largest nickel producer Jinchuan Group will buy a 51-percent stake in Zambia's sole nickel mine, Munali, from Africa-focused miner Albidon Ltd, Zambia's mines minister Maxwell Mwale said yesterday.

Mwale told Reuters that Jinchuan would re-start operations by next month, after stopping in March due to low prices

"Jinchuan provided loans to Albidon and that has been converted into equity," he said, without indicating the precise cost of the deal.

Munali had plans to produce 10,000 tons of nickel annually.

Jilin Jien Nickel Industry Co, China's second largest nickel miner, said Wednesday that it had bought 14.7 percent stake in Canada-based Victory Nickel from Nuinsco Resources Ltd for 18.4 million yuan.

The Chinese company would control 18.98 percent of Victory's total stock after the acquisition, making it the biggest shareholder in the Toronto-listed company, which is engaged in the exploration and development of nickel resources.

"Although the price of nickel continues to rise, it is still low compared to the highest level last year. So, we think it is good time to start on overseas acquisitions," said Wang Xinglong, secretary to the chairman of Jilin Jien Nickel.

Jiang Bo, an analyst at mysteel.com said nickel prices touched 146,000 yuan per ton this week, up 79 percent from the lowest level of 82,000 yuan per ton in December 2008 when demand from stainless steel producers slumped due to the economic downturn.

But the price was still low compared to the 260,000 yuan per ton in January 2008, indicating that there was room for more hikes, he said.

He also said the nickel miners' moves were in line with the Chinese government's non-ferrous metal industry stimulus plan.

The government said earlier it would encourage restructuring major non-ferrous metal makers such as Jinchuan to develop into major metal groups through acquisitions.

China's nonferrous metal industry has been making losses since the second half of 2008 due to the effects of the global financial crisis.

But the industry has been showing signs of a pick up since March this year, according to the Ministry of Industry and Information Technology.

The combined profit numbers of 10 nonferrous metals producers were 11.8 billion yuan from March to May this year.

(China Daily August 7, 2009)