Nickel is used to make stainless steel

The increase amounts to a 4% rise on Thursday's close.

The United Steelworkers union said contract talks at the firm's Sudbury operations had come to a standstill.

Workers have until 31 May to reach an agreement, but the union had to reach agreement by midnight on Friday to give members time to vote on a new contract.

Ready to strike

"We have less than 24 hours to go and we are nowhere near a collective agreement," said Wayne Fraser, a representative with the United Steelworkers union.

We have notified our members that they ought to be getting ready for a strike Wayne Fraser, United Steelworkers

The current three-year contract comes to an end on 31 May.

"We have notified our members that they ought to be getting ready for a strike," Mr Fraser said.

The union represents about 3,100 workers at Inco's Sudbury operations.

The pending strike comes amid moves to consolidate the industry.

Inco has been in the running to acquire Canada's Falconbridge but Swiss mining group Xstrata recently entered the race, offering a higher bid.

Meanwhile Inco is the target of a hostile takeover from Teck Cominco, the world's largest zinc producer.

Supplies of nickel, which is used in the production of stainless steel, have become increasingly tight.

Inventories of nickel on the London Metal Exchange hit their lowest level since October 2005 on Friday, falling 246 tonnes to 18,432 tonnes.