Poseidon bubble

The Poseidon bubble was a stock market bubble in which the price of Australian mining shares soared in late 1969, then crashed in early 1970. It was triggered by the discovery by Poseidon NL of the early indications of a promising nickel deposit in September 1969.

In the late 1960s, nickel was in high demand due to the Vietnam War, but there was a shortage of supply due to industrial action against the major Canadian supplier Inco. These factors pushed the price of nickel to record levels, peaking at around £7,000/ton (£113,000 in 2018 adjusted for inflation) on the London market early in November 1969. In September 1969, the mineral exploration company Poseidon NL made a major nickel discovery at Mount Windarra northwest of Laverton, Western Australia. In early September its shares, which had been trading at $0.80, began rising on insider trading (which was not illegal at the time). On 1 October, Poseidon announced that drilling had struck 40 metres of ore averaging 3.56% nickel and the share price immediately rose until Poseidon shares were trading at $12.30. After that, very little further information came to light but the price continued to climb on speculation. At one point, a UK broker suggested a value of up to $382 a share. Mount Windarra produced 5.3 million tonnes of ore grading 1.5% nickel during the life of the mine.

Poseidon Limited entered receivership in September 1976, unable to meet its loan repayments but did survive its time in receivership and was relisted on the Australian stock market in December 1978. Poseidon eventually merged with Robert Champion de Crespigny-led Normandy Resources in 1991, with Poseidon being delisted on 8 May 1991 and the name company taking the name of Normandy Poseidon Limited.

Poseidon bubble

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