Minara Resources, Australia's second-biggest nickel producer, said it may be forced to reduce production at Murrin Murrin to half of normal levels due to a cut-off in natural gas supplies from energy firm Apache Corp. Apache, responsible for one third of Western Australia's natural gas, said that last week's fire and explosion at its Varanus Island offshore processing unit will force sales to be halted for at least two months (MB Jun 6). The accident has left miners in the state - including Rio Tinto, BHP Billiton, Oxiana and Newcrest - scrambling for alternative supplies. Minara has secured interim sources of energy for its Murrin Murrin mine, which produced 27,585 tonnes of nickel and 1,884 tonnes of cobalt last year. But production may not be able to go above 50% while normal supplies are restricted, a spokesman said. "These [alternative] supplies are temporary," he said.

Apache's announcement last week that the Varanus Island operation may be out of action until August was a blow to miners who had hoped for an early fix.

Over the weekend, officials from various miners joined state government officials and energy companies to discuss how to deal with the crisis.