Ravensthorpe blow-out adds to laterite nickel woes

The massive cost-blow out at BHP Billiton's Ravensthorpe nickel project adds to the long run of technical and financial problems at laterite nickel projects around the world.
BHP announced today the cost of the Ravensthorpe project would be A$2.8 billion, more than double the original budget, and production would be delayed about six months until the first quarter of 2008.
It followed big cost increases and delays at Canadian company Inco's Goro nickel project in New Caledonia, where the budget has risen to US$3 billion from US$2.15 billion.
In addition, Brazilian mining giant CVRD - which recently acquired Inco - has deferred its Niquel do Vermelho laterite nickel project in Brazil.
GRD subsidiary GRD Minproc is one of the main engineering contractors on the Ravensthorpe project and is also the main contactor on the Vermelho project.
These problems follow a disastrous run of problems in the late 1990s, when three Australian companies ran into major technical and cost issues with laterite nickel projects.
Only one of these projects, Anaconda Nickel's Murrin Murrin mine, is still operating close to its original form, and only after the company went through an extensive restructuring.
The delays in commissioning new nickel projects is great news for Anaconda and other producers, because global nickel prices have hit record highs.
Most nickel production around the world is based on the mining of sulphide nickel deposits. The world has abundant deposits of laterite nickel but technical problems have limited production from this source.
The deferral of CVRD's Vermelho project was reportedly due to difficulties the company was having in obtaining environmental licences and permits.
The Goro project has been affected by labour strife caused by a general strike in New Caledonia and vandalism at the mine site.
The general strike was called by local unions to protest against Inco's use of Filipino workers.


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