Turnaround on nickel laterites

A congenial evening at Kalgoorlie’s historic Hannan’s Club, venue for mining deals for a century, led to a dramatic change of direction for WMC in its attitude towards the emerg-ing lateritic nickel industry.

The corporation’s then manager of the local nickel smelter, Sandeep Biswas, chatted to Ian Buckhorn, managing director of Heron Resources, which had promising deposits of nickel in the Easter Goldfields.

Biswas wondered whether Heron’s high-grade ore could be used in the smelter and his interest, and later conversations with other executives, encouraged Buckhorn to focus metallurgical tests to have his laterites processed by WMC.

More serious discussions with Seamus French, who runs the corporation’s Kwinana nickel refinery, have led to tentative agreements under which Heron would supply a partly processed nickel.

Given WMC’s acerbic comments in recent years about laterites, their use would represent a conversion of considerable magnitude.

In the Western Australian nickel industry it has been the view for some time that the strong anti-laterite posture adopted at the corporate level was not shared by technical and geological staff.

Another step in the conversion, at least as it related to Heron, was a visit by WMC executives to the junior’s Goongarrie prospect, to discuss unrelated joint ventures between the two on gold and nickel sulphide tenements.

A fax with the latest drilling data arrived during the meeting, and the high grades in the intersections impressed the WMC party.

Why, one asked, had we been looking around the world for further nickel properties, when grades of this quality were close by?

The size of the ore body also impressed the WMC team, and further conversations followed.

If these lead to a firm agreement, Heron will produce a nickel hydroxide, with about 60 per cent contained nickel, that would bypass most of the processing steps at the Kwinana refinery, providing obvious benefits for WMC.

Such an agreement would greatly reduce Heron’s capital costs in launching its nickel venture.

“We are risk averse,” says Buckhorn. “We are looking to get into this industry in incre-mental steps with minimum cost.”

He obviously has in mind the vast expense – and comm-issioning problems – faced by the existing three lateritic projects.

The first of these incremental steps would be the acceptance by Cawse Mining & Exploration of Goongarie lateritic ore, to produce 12,000 tonnes of metal a year, at its expanded Centaur project.

Cawse has until August to decide whether to proceed.

Buckhorn points out this would not involve Heron in significant capital cost, and would absorb only one sixth of its resource of 180 million tonnes of ore.

He noted that Heron already had a close relationship with WMC in a number of joint ventures and could benefit from the bigger company’s extensive infrastructure throughout the Eastern Goldfields.

The Kwinana refinery had a capacity of 60,000 tonnes of nickel a year, but this could be expanded ultimately to 100,000 tonnes, nearly a third of which could come from laterite mines.

WMC has made it clear that it could accept partly processed nickel from other lateritic and sulphide mines, an attractive option for new ventures seeking to avoid the high cost of treatment plants of their own.