Western Areas has reignited plans to upgrade its Cosmic Boy concentrator in the light of interest in nickel in the electric vehicle battery market, with GR Engineering Services to carry out the work.
Western said today it would spend $17.5 million on its mill recovery enhancement project, which had been both announced and shelved in 2015.
Since that time, Western has invested $6.5 million in long lead items to allow for a quick recommencement of activities when a decision was to be made.
GR Engineering was announced as engineering, procurement and construction contractor for the project in 2015.
Cosmic Boy processes ore from Western’s Forrestania operation. The upgrades will allow the facility to recover an additional 1,400 tonnes of nickel per annum.
“While the base case economics include our recent new offtake terms, we believe there is still significant upside potential for this project,” Western managing director Dan Lougher said.
“Over the last 18 months, we have been in discussions with major global companies active in the EV battery market.
“The demand for nickel products in this market has intensified substantially and we have an expectation, based on our discussions, to improve commercial terms for our new 45 per cent to 50 per cent high grade product generated by this project.
“As such, an improvement in those commercial terms will enhance the base case economics presented today.”
Western shares were 0.6 per cent lower to $2.30 each, while GR shares were 4.1 per cent lower to $1.51 each at midday.