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Russian nickel miner OAO Norilsk Nickel (GMKN.RS) said Monday that it would consider an offer from Australian nickel miner Poseidon Nickel Ltd. (POS.AU) for its Cawse mine.

"If the offer is good enough, we would consider it," Oleg Pivovarchuk, Deputy Chief Executive Officer, told Dow Jones Newswires. "These proposals must be very good though."

In March, Poseidon said it was in "confidential discussions" with Norilsk Nickel to acquire the Cawse nickel operation in Western Australia.

Norilsk put the laterite mine on care and maintenance last year, citing low nickel prices. Cawse is estimated to be worth about A$50 million and produced about 8,500 tons in 2008.

Due to low prices the company placed all of its Australian operations on care and maintenance. These account for roughly 43,500 tons of capacity.

Pivovarchuk said the Australian assets were hit particularly hard by the drop in nickel prices, which fell 80% at the end of 2008 from a record high in 2007.

The cost of production ranged between $12,000/ton and $20,000/ton at the Australian operations, and prices on the London Metal Exchange are currently trading around $10,600/ton, having fallen to as low as $8,850/ton in October.

Norilsk also has two operations in Africa - Tati Nickel in Botswana and Nkomati in South Africa, which is a 50:50 joint venture with African Rainbow Minerals (ARI.JO).

Both are still operating, and Pivovarchuk said: "We have no intention to sell the African operations" or to cut production. There has been much speculation in the market that Norilsk will have to reduce output in Africa as well, but the company said it won't stop producing.

Pivovarchuk did say that plans to increase output have been put on hold due to low prices and stainless steel production being down 36%. Stainless steel industry accounts for 70% of nickel consumption.