Laterite challenge

NEW sulphide nickel mines and the likely expansion of others this year will challenge the claim that lateritic deposits will dominate the market in the next few years.

As the lateritic projects in the Eastern Goldfields struggle with early problems, with only partial success, a number of new, modestly sized sulphide operations are close to fruition.

The first will be the former WMC venture, the Miitel mine, in the Kambalda complex, which was almost ready to be commissioned when the company made a decision two years ago to close several mines it regarded as providing inadequate returns during a period of poor prices.

WMC made it clear that it was not interested in expanding nickel production for volume alone – each mine had to produce high profits and Kambalda would be employed as a “swing producer”, mines being operated only when prices were high.

Mincor Resources NL, with partners Clough Mining and Donegal Resources believes high profits can be achieved at Miitel, which should be producing ore within about two months.

The three companies will provide $38 million to buy the mine, and will have the ore processed by WMC.

Mincor expects profits before financial costs to be $25 million in the coming financial year on output which will reach 6000 tonnes of contained nickel in several years.

Lionore has confirmed that it will be in production at the Emily Ann deposit by the end of the year with cash costs about half the recent nickel price, despite having to build an underground mine.

It will produce a nickel concentrate to be shipped to Inco in Canada containing 6700 tonnes of contained metal a year.

Expansion could also increase Australian nickel sulphide output in the next few years.

WMC has just begun a detailed feasibility study to increase nickel output from its giant Mt Keith deposit by 60 per cent. A decision on an investment likely to total about $300 million will be made in the second half of this year.

The expansion would increase production to 70,000 tonnes of contained metal a year, from the current rate of 48,000 tonnes, with the economics of scale further reducing costs in what is one of the most efficient nickel operations in the world.

At the other end of the development scale, junior explorer Bullion Minerals will soon begin to drill the Round Top Hill nickel prospect that had been previously explored for gold in the rapidly developing nickel province on the Lake Johnston Greenstone Belt.

The prospect is close to Emily Ann and Maggie Hays structures and Tectonic Resources’ RAV 8 project is further to the south.

Although nickel was first discovered at Lake Johnston in the 1970s it has only been relatively recently, in the past decade, that explorers have began to focus successfully on extensive nickel mineralisation.

Promising intersections have been made at Round Top and Bullion Minerals has other promising prospects on its leases, which cover about half the greenstone belt (the balance largely held by Lionore).

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