Australia’s third-largest nickel miner, Western Areas NL, says production is so strong that it will complete its obligations early and may negotiate higher contracts for the metal.

The company said shipments to key customer, China’s Jinchuan Group, were several months ahead of schedule, and a contract for 25,000 tonnes of nickel concentrate would be completed by February.

Western Areas had no obligation to extend it, the miner said in a statement.

Nickel prices are volatile but have risen this year due to growth in the stainless steel market. On Monday, nickel closed at $US24,550 a tonne on the London Metal Exchange, down $US445.

Western Areas’ board was considering a range of options including calling for tenders for the next tranche of concentrate from its flagship Forrestania project in Western Australia, east of Perth, the company said.

“This is in response to strong interest being shown by a number of major offshore nickel producers and other companies,” it said.

Western Areas might also seek a partner for its exploration and development projects in Australia and Finland, managing director Julian Hanna said.

Jinchuan and BHP Billiton Ltd buy most of Western Areas’ concentrate.

Western Areas’ shares were trading 10 cents lower, by 1.7 per cent, at $5.97 at 1158 AEST.