Nickel producer's HK float expected to be pushed back to mid-2007 and reduced to about US$100m Xinjiang Non-ferrous Metal Group has delayed until next year and cut by as much as half the size of the planned initial public offering of its nickel unit, market sources said. The firm had planned to raise as much as US$200 million by the end of the year but a source said now it is hoping to raise 'something over US$100 million'. 'The company is undergoing restructuring and getting the relevant government approvals,' and expects to launch the IPO in the first half of next year, the source said. BOC International is arranging the deal. Xinjiang Non-ferrous produces 5 per cent of China's nickel output and holds the mainland's second-largest reserves. Nickel is used to make stainless steel. Jinchuan Group, which supplies about 90 per cent of China's nickel, is the country's largest nickel producer and No4 in the world. Shares of Russia's Norilsk Nickel, the world's largest nickel producer, have risen 58 per cent this year to trade at US$139.50 on Friday or seven times forecast earnings. Strong demand for stainless steel sent nickel prices to their highest level on August 22 when they hit US$35,200 a tonne. The price of a tonne has fallen back since then to US$30,500 on Friday. That is twice what nickel traded for at the beginning of the year. Industry watchers expect global demand for nickel to exceed supply by 34,000 tonnes this year. China's demand for stainless steel is expected to hit 5.3 million tonnes. Meanwhile, Shandong Zhaojin Group, a gold and silver processor which also makes jewellery, will face the listing hearing committee on Thursday over its proposed US$250 million initial public offering, market sources said. Should the deal be approved the company and its book runners, UBS and Cazenove, will begin two weeks of pre-marketing. That will be followed by another two weeks of road shows with the company's shares set to start trading on December 7. Last year, the company earned a net profit of 760 million yuan, up 4 per cent, on sales of 7.2 billion yuan, up 28 per cent, according to the company's website. The company is building a US$30 million wastewater processing facility that it says will produce one tonne of gold, five tonnes of gold salt and 30,000 tonnes of arsenic a year. Annual sales revenue of the project is forecast at US$30 million, the company said earlier this year. It did not say when the plant will start operations. Zhaojin, a state-owned mining company started in 1974, has a mining and ore cleaning capacity of 10,000 tonnes a day and can smelt 1,700 tonnes of precious metal daily. Annual mining capacity is 3.3 million tonnes and annual gold output is 80,000 ounces, about 14 per cent of China's output. Lingbao Gold listed in Hong Kong in January and the price of its shares has doubled to HK$6.64 - 22 times expected earnings. China tripled mining taxes in May to take a larger share of the run up in precious metal prices. Mining companies now pay up to 7.50 yuan a tonne, up from the previous 2.50 yuan a tonne. The spot price of an ounce of gold has doubled since 2000 to trade at US$595.65 on Friday. It recently hit 26-year highs after trading at US$700 in 1980. The spot price for an ounce of silver traded at US$12.10 on Friday, down from US$14.83 hit in May, which was the highest level since 1980.