Low cost, lower tech nickel mine projects attracting attention
mineweb.net
The continuing high nickel price has prompted companies to look at new solutions for mining and treating low cost lateritic ores without the need for high cost complex metallurgical plants.
Author: Lawrence Williams and John Chadwick
Posted: Friday , 13 Apr 2007
LONDON -
With base metal prices all remaining at high levels, opportunities are opening up for the development of projects previously considered sub-economic - particularly if lower cost production methods are brought into play. This is particularly true in the nickel sector where the cost of a metallurgical plant suitable for treating lateritic-type ores can run into a billion US dollars or more which is way beyond virtually all junior miners' financing capabilities. If means can be found, though, of either producing a concentrate relatively cheaply by other means and selling the product to an existing metallurgical plant which needs the feed, or where other metal content alongside the nickel may make direct sale and shipping of the unprocessed product viable, then a whole new opportunity may exist for junior miners.
Such is the case with Regency Mines (AIM: RGM, Frankfurt: RG4) which is confident it can mine low grade nickel limonite ore at its Papua New Guinea Mambare property and direct ship the low grade nickel and cobalt product direct to Chinese blast furnace operations for the latter to make a nickel-rich pig iron as an intermediate product for ultimate stainless steel production. What may make this economically viable is the relatively high iron content of the resource (up to around 50%) which would effectively be free of cost to the Chinese, with the latter paying for the nickel and cobalt content alone.
Regency's Mambare project covers a huge area of 584 km2 which is only 110km by metalled and gravel road to a port facility at Oro Bay. Regency's Graham Rolfe, who is managing the project in PNG, told Mineweb at a presentation in London, that he is confident that such a project is viable and because of the close to surface, and easy working of the limonite material, a project to mine 1 million tonnes a year, and direct ship it to China, could be fast tracked to production in around six months from project go-ahead. Further, according to company chairman, Andrew Bell, there are already expressions of interest from Chinese steelmakers for such an operation.
Previous exploration on the property was conducted by several companies in the 1960's, including the Bureau of Mineral Resources, Homestake-Hanna Syndicate, Amax Mining (Australia) Inc., Southern Mining & Development Co. Ltd. and PNG Nickel Ltd. Exploration consisted of pitting and hand augering with at least one bulldozer trench being dug. Between 1960 and 1971, 240 Auger holes were drilled, and 56 pits and one costean dug. In 1999 Anaconda Nickel Ltd reviewed the data over a 158 sq km area of the Mambare Plateau and estimated two limonite resource potentials: 630 Mt at 0.78% nickel with a 0.5% cut-off and 200 Mt at 1.01% nickel with a 0.8% cut-off. The limonites are underlain by a higher grade saprolite, but this would almost certainly need a high cost HPAL metallurgical plant to process.
The current resource is put at around 200 million tonnes of soft limonitic material at surface grading 1% nickel and 0.1% cobalt, underlain by the harder saprolites with a similar tonnage and grades of 1.25-1.5% nickel. An infill drilling programme is to be undertaken to convert the old Anaconda data to resources and reserves.
Regency's current plan is to mine the limonites and generate sufficient income to be able to contemplate the high capital costs of an HPAL plant at a later stage.
Meanwhile, in Australia there is growing interest in nickel heap leach opportunities, and Cortona Resources (ASX: CRC) is just one company advancing this technology. In September 2006, Cortona announced a nickel laterite resource at Black Hill in the North Monger project, 40 km southeast of Kalgoorlie, Western Australia. The inferred resource is estimated to be 30 Mt at 0.64% Ni. The resource was discovered in 1997 and measures more than 3.5 km x 0.4 km, extending to a maximum depth of 40 m. Cortona recently purchased the tenements to the south of the resource, which were never drilled for nickel. The company says "interpretation of geophysical datasets suggests the resource has the potential to continue into this area."
The resource is located close to suitable infrastructure, being within 30 km of the Kalgoorlie to Kambalda gas pipeline, 1 km from the Trans Australian Railway, and 4 km from the Mount Monger road that leads to the major mining town of Kalgoorlie. There are also potential sulphur sources nearby for the manufacture of sulphuric acid.
Since announcing the resource, Cortona has been monitoring developments in nickel laterite heap leach technology, which for some ores is being recognised as a viable metallurgical alternative to the more widely used, but capital intensive, HPAL technique. The heap leach process is attractive because it not only has the potential for significantly lower capital expenditure than HPAL, but it is also a less complex process.
At this stage there are no producing nickel heap leach operations in Australia. Several projects are under review, including Heron Resources' Jump Up Dam prospect 150km northeast of Kalgoorlie, where encouraging test results have recently led to a resource drill out. Heron is now conducting a feasibility study of the resource. Elsewhere, European Nickel has commenced construction of a nickel heap leach plant at its Caldag Project in Turkey, with production due to commence in 2008.
In light of the positive outlook for the heap leaching of nickel, Cortona has engaged the services of Independent Metallurgical Laboratories to conduct test work on the heap leach potential of the Black Hill laterite resource. The work has commenced and will proceed in two stages. The initial stage will firstly characterise the ore before assessing the acid digestion potential via a series of bottle roll leach tests.
If it can be demonstrated that the material is conducive to acid leaching, the test work will then proceed to a more detailed second stage. This will investigate the combined physical and chemical aspects of nickel and cobalt recovery using a column test. Stage 1 is due to be completed by early June 2007, and stage 2, if implemented, should conclude by late October 2007. |
