Australia’s Nickel Mines drops share purchase plan amid market volatility

The announcement came two days after the miner had noted reports on short positions held by China’s Tsingshan Holding Group in London Metal Exchange (LME) nickel, sending its shares down by 13% on Thursday.

Tsingshan is one of the world’s biggest producers of nickel and holds a 6.2% stake in Nickel Mines through a unit.

Nickel prices had shot up to record levels earlier this week, after Tsingshan bought large amounts of nickel to reduce its short bets on the metal, forcing the LME to halt trading.

Applications for the share purchase had far exceeded the company’s target to about A$57 million, Nickel Mines Managing Director Justin Werner said in a statement.

“However, given market volatility and the retraction in the company’s share price in recent days… it is in the best interests of shareholders to cancel the SPP effective immediately and return all applications in full,” Werner said.

Shares of Nickel Mines rose as much 7% in early trading, recouping some of the losses suffered earlier in the week.