By James Regan
SYDNEY, Jan 7 (Reuters) - Australian metals refiner Queensland Nickel on Thursday said it had made arrangements to pay employee wages next week amid concerns the private company could be struggling to survive.
The firm employs more than 700 workers and is one of the country's biggest nickel refineries, with a capacity to produce 35,000 tonnes of metals a year.
A slump in the nickel price CMNI3 from nearly $30,000 a tonne in 2011 to less than $8,500 a tonne amid a mounting supply glut has piled pressure on many producers of the metal, which is needed to make stainless steel.
In a letter to employees emailed to Reuters, Managing Director Clive Mensink said he "wanted every worker at Queensland Nickel to know that arrangements have been made for wages to be paid next week".
He added that "all we can do together is produce as much nickel as we can, as efficiently as we can, and support each other in doing so".
Calls to Queensland Nickel to elaborate on what type of arrangements had been made and the longer-term prospects for the business were not immediately returned.
Last month, mining magnate Clive Palmer, who purchased the refinery from BHP Billiton BHP.AX BLT.L in 2009 said the business was seeking "minimal" government assistance in the form of a guarantor for a A$35 million ($24.7 million) bank loan to avert a closure. Queensland state government rejected the bailout fearing it would set an unwanted precedent for other resources companies facing hardship.
Palmer has previously warned that the loss of the refinery would have serious consequences and place some 1,600 direct and indirect jobs in jeopardy.
The refinery buys most of its nickel ores from New Caledonia. As recently as last August it was negotiating with New Caledonia's Societe le Nickel, partly owned by Eramet ERMT.PA of France, for additional supply. = 1.4188 Australian dollars)