Western Areas approves $62m expansion

The board of Western Areas has given the go ahead for a $62 million expansion of its Forrestania operation which is set to double nickel production next year.

News of the decision boosted the nickel miner's share price by 24 cents, or 4.15 per cent, to $6.02 at 10:31 AEST.

In a statement today, the miner said it will mine the Spotted Quoll open pit and double the capacity of the Cosmic Boy concentrator.

The decision will boost nickel production from 10,330 tonnes, recorded in fiscal 2009, to the targeted 20,000t by next year.

Additionally, a feasibility study has started for an underground mine at Spotted Quoll with development planned to commence in 2011.

"The Company intends to start work at Spotted Quoll and the plant upgrade as soon as possible, subject to final ministerial consent," Western Areas said.

"Major contracts have already been awarded for Spotted Quoll and the nickel concentrator with site works due to start in September."

The expansion is expected to employ more than 80 people during construction and 85 people during the operation.

Western Areas said it had funds available for the estimated $62 million total cost of the expansion.