* Sirius says in supply talks with 3 buyers ahead of mine development
* Managing director declines to name companies involved
* But says supply of quality concentrate would help BHP
By James Regan
SYDNEY, July 14 (Reuters) - Australian miner Sirius Resources NL is in late-stage negotiations with a trio of major nickel smelters to supply up to 26,000 tonnes of nickel concentrate annually, its managing director said.
Sirius stock has risen more than sixfold in the two years since it discovered the high-purity Nova nickel deposit in west Australia, partly on expectations the concentrate would command a premium from smelting companies when output begins in late 2016.
Managing Director Mark Bennett said one of the companies involved in negotiations would probably take all the material, although he declined to name the firms involved.
However, he said that a steady supply of quality concentrate could help BHP Billiton attract more buying interest for the Nickel West division, which it is looking to sell.
"Nickel West's problem is it doesn't have enough supply of high-quality feed for the smelter - something that Nova would solve," Bennett said on Monday.
BHP, among a handful of major nickel miners and producers worldwide, declined to comment on the issue. Those companies, which also include Russia's Norilsk and Brazil's Vale , control the lion's share of the 1.8 million-tonne-per-year global nickel market.
Sirius on Monday released findings of a study that showed the Nova deposit could yield nickel at a cost of $2.09 per pound, well below today's nickel price of $19,380 a tonne , or $8.79 a pound, providing robust profit margins.
Nickel prices have risen 40 percent this year, boosted by demand from stainless steel manufacturers and changes in Indonesian mining laws that have cut off a major supply source for Chinese steel mills.
Bennett added that smelting costs for Nova nickel would be lower as it contains less unwanted magnesium.
He said the mine would cost about A$473 million ($444 million) to build.
$1 = 1.0645 Australian Dollars Editing by Joseph Radford