Poseidon signs up Chinese firm, Arccon

Poseidon Nickel has signed an agreement with a Chinese construction and engineering group and Arccon Construction to design build a nickel sulphide concentrator for its Mt Windarra nickel project.

The non-binding memorandum of understanding with China Nonferrous Metal Industry's Foreign Engineering and Construction Co (NFC) will pave the way for formal agreements on financing and construction of the concentrator and associated infrastructure at Mt Windarra.

Perth based engineering firm Arccon WA is also party to the agreement, acting as the local design and installation engineer.

Under terms of the deal, Poseidon will work exclusively with NFC and Arccon to determine the cost of the Mt Windarra concentrator and associated infrastructure.

Poseidon managing director David Singleton said the agreement marked the results of a competitive process undertaken by Poseidon for the concentrator plant and associated finance.

"We are pleased to have appointed NFC with their Australian partner Arccon to complete the detailed design and construction of the concentrator with the intent of meeting the earliest possible production date," Mr Singleton said.

"The plant design is focused on the Mt Windarra mine but we are building in the potential for economically expanding the plant to meet the requirements of the Cerberus ore body which we actively developing and which will potentially double the nickel concentrate output."

NFC president, Wang Hongqian, said the agreement had significant strategic importance as it would be its first EPC contract in Australia.

"I hope that this project will lead to future developments of other mineral resource projects together with Poseidon Nickel," Mr Wang said.

At close of trade today Poseidon had gained 7.7 per cent to trade at 28 cents.