From the London Post (anybody get the reference? used to be a column in the NEJM)
© Lloyd's List and Informa Publishing Group. Reproduced
with permission. Thursday, January 11, 2001
Nickel find fills Canada with glow of optimism
James Brewer
AFTER years of frustration, Canadians could finally be close to
getting their hands on a big new cache of exploitable nickel that
could set the world minerals trade aglow.
While Toronto-quoted giant Inco is still struggling to win official
permission to develop its massive but remote Voisey’s Bay nickel
deposits in Labrador, a fresh project being pursued by a junior
exploration company in central Canada may offer even greater
promise.
Canmine Resources, which has in 10 years built a C$39m
(US$26m) asset base and achieved a Toronto listing from a
standing start, is about to begin a C$2m exploration programme in
northern Manitoba, at its Binco nickel property.
“Binco is an exciting project and is being closely watched by all of
the majors,” enthused one of Canmine’s founders, president and
chief executive Ted Ellwood.
Canmine will drill 25 holes in the next few months on the property,
northeast of the Thompson Nickel Belt, one of the world’s largest
nickel-producing zones.
At Thompson, Inco is well established, with a smelter and milling
facilities to complement its mining endeavours.
What it produces is shipped throughout the world, contributing
roughly 4% to 5% of international nickel supplies.
The metal is favoured for alloys and plating, with some 70% of
global output going into stainless steel manufacture.
Since the Thompson belt was discovered in the 1950s, it has been
one of the largest nickel producing regions in the world, always classified in the top two or three. Over a distance of 200 km, a total
of 18 large deposits of the silver-white metal have been
discovered. As a result, companies have spent millions of dollars
seeking to trace an extension to the belt.
For years, the data suggested that they look to the east of
Thompson, which they did without success.
At the end of 1996, a fresh survey suggested the extension
tracked to the northeast, rather than due east. The news spurred
Canmine to acquire the trend, and spend C$1.6m over three years
to bring its project to the drilling stage.
“If successful,” said Mr Ellwood, “and a new belt equivalent to the
previously known portion of the Thompson belt is found, the supply
implication is enormous.
“Whichever major company owns it may also control the nickel
market,” he added.
Thompson belt deposits have ranged up to 300m tonnes, as
against 30m tonnes at Voisey’s Bay as a single deposit.
Manitoba’s infrastructure would be a big advantage in making the
best commercial use of new supplies.
The Binco trend runs parallel, about 50 km distant on average, to
the Nelson River hydroelectric power system which is one of the
largest in North America, and provides some of the lowest power
rates.
A road and train line are within 50 km.
Manitoba Hydro has potential to double its capacity, and a
developer could have access to very cheap power. In the
southeast of the province, for example, the rate is $0.025 per
kw/hour, versus the global standard for feasibility studies of around
$0.08.
This is seen as providing a tremendous cost edge for any new
refining facility, particularly if the latest technologies, such as
pressure leach, were applied, as against smelting, which is 1950s
technology.
Although there are short-term problems which have brought down
stainless steel prices in the Far East, Mr Ellwood is among many in
the industry who believe the nickel market will remain generally in
balance or slight shortfall over the next few years, with prices
averaging around $3.50 per lb.
The Voisey’s Bay property was bought by Inco in 1996 for C$4.3bn
from two businessmen who stumbled on a huge nickel deposit
while searching for diamonds.
The discovery caused great excitement in minerals circles, but
Inco has been unable to develop the project because of a dispute
with the Newfoundland government over where an associated
smelter should be sited.
Newfoundland, the poorest of Canada’s 10 provinces, refused to
issue Inco with a mining permit until it agreed to build a C$1bn
smelter within its boundaries.
There are hopes of talks resuming early in 2001.
As the Thompson nickel belt is the basis of an established
industry, Manitoba is seen as unlikely to put up any such
regulatory obstacles.
Meanwhile, Canmine’s other main focus is on further development
of a cobalt refinery it acquired in late 1999 near the appropriately-named
Ontario town of Cobalt, making it one of the few integrated
producers of the by-product used in batteries, jet engines and gas
and steam turbines. |
