SYDNEY, Oct 1 (Reuters) - Plans to resume exploration of a nickel deposit in the Solomon Islands have been suspended after Australia-listed Axiom Mining was served with a legal notice by Sumitomo Metal Mining, Axiom said on Wednesday.
Axiom on Sept. 24 won a three-year court battle against Japan’s Sumitomo over rights to exploit the Isabel deposit, regarded as a major nickel discovery on a par with other large South Pacific mines, and said it would move quickly to conduct exploration work.
Sumitomo responded with an application for an interim injunction, typically a precursor to a legal appeal.
“Whilst this new interim injunction temporarily halts the exploration activities on Isabel Island, we are confident of resolving this matter when we are fully represented by our legal counsel next week in Solomon Islands,” said Axiom Chief Executive Ryan Mount.
Mount has said last week’s ruling in the Solomon Islands High Court could lead to the nickel deposit, spanning the islands of San Jorge and Santa Isabel, being developed within two years, just as nickel prices soar due to an ore export ban by major supplier Indonesia in January.
The basis of Sumitomo’s action is that they intend to appeal the Sept 24 judgment and want the “status quo” to remain pending the determination of the appeal, according to Mount.
Sumitomo declined immediate comment on the matter.
The Chief Justice presiding over the action has indicated that the full hearing of Sumitomo’s application for an injunction may be able to be heard by the Court of Appeal, which is sitting next week, Mount said.
Analysts estimate Isabel compares in size or grade to Vale SA’s Goro mine in New Caledonia and the Metallurgical Corp of China < 601618.SS>-owned Ramu mine in Papua New Guinea.
The Goro mine is desgined to yield 60,000 of nickel annually. (Additional reporting by Yuka Obayashi in TOKYO; Editing by Joseph Radford)