UPDATE 1-Minara year profit drops 20 pct on shutdown

(Adds details, share price)

SYDNEY, Feb 22 (Reuters) - Minara Resources Ltd (MRE.AX: Quote, Profile, Research), Australia's second biggest nickel producer, said full-year profit dropped 20 percent due to lower production following a plant maintenance shutdown, but saw higher output in 2008.

Minara's 2007 profit of A$272 million ($249 million) was below an analysts' consensus figure of around A$278.5 million.

Production from its Murrin Murrin project in Western Australia was expected to be in a range of 34,000 to 38,000 tonnes of nickel in 2008, up as much as 38 percent on 2007, the company said.

"2007 was a year of transformation for Minara with a number of significant events and activities coming together to provide a strong platform for operational performance and future growth," Minara's managing director, Peter Johnston, said in a statement.

Nickel prices were down about 20 percent in 2007, though Minara said it expected the nickel market to be strong over the next two to three years, driven by Chinese demand.

Minara's stock, which rose about 10 percent last year, was up 0.7 percent at A$5.64 in early trade, outperforming a broader market down 1.1 percent.

Full-year output totalled 27,585 tonnes of nickel, just below the company's guidance of 28,000 to 30,000 tonnes issued in October. A seven-week maintenance programme in October and November was behind the drop in output.

Output in 2006 was 31,524 tonnes of nickel.