Australia-based Western Areas saw its cash-cost of production drop to a three-year low in the December quarter, as the weakening of the Australian dollar offset the decline in the nickel price.

“Focus on cost management, optimised mill performance and above expectation ore feed head grade has resulted in the lowest quarterly unit cash-cost of production of A$2.23 per lb ($1.91 per lb) of nickel-in-concentrate since December 2011,” it said on Wednesday December 21.

The miner produced 6,597 tonnes of nickel contained in ore in the three months to December 2014, a 10.9% year-on-year drop, it said.

The miner's nickel assets – two mines and a concentrator – are located in Forrestania, Western Australia.

The quarter's output at the Flying Fox mine stood at 64,122 tonnes of ore mined at 4.9% for 3,114 tonnes of contained nickel, the company said.

In the same period in 2013, the mine produced 83,095 tonnes of ore at 4.6% for 3,791 tonnes of contained nickel.

The company’s other operating mine, Spotted Quoll, produced 68,324 tonnes of ore at 5.1% for 3,483 tonnes of contained nickel in the quarter.

In the same period in 2013, the mine produced 74,720 tonnes of ore at 4.8% for 3,616 tonnes of contained nickel.

The miner's Cosmic Boy Concentrator produced 44,159 tonnes of concentrate at 14.6% nickel for 6,434 tonnes of nickel.

In the same period a year ago, the concentrator had produced 43,012 tonnes of concentrate for 6,427 tonnes of nickel.

In December, the miner entered into a nickel-in-concentrate sales contract with the Jinchuan Group.

The contract term is for two years or the delivery of 26,000 tonnes of nickel-in-concentrate, whichever is earlier.

Deepali Sharma