Norilsk Shelves Tati Activox Plan On Cost Worries

By Liezel Hill | Monday June 9, 2008 00:00

 

Internal and third-party reviews had indicated 'a substantial cost escalation' from a 2006 forecast of $498-million, the company said.

Norilsk acquired the technology and 85 percent of the Tati mine when it bought Canada's LionOre Mining last year.

The government of Botswana owns the balance. Concentrates from Tati Nickel are currently toll smelted at a plant 200 km away, and then refined by third parties, either in Zimbabwe or Norway, according to Norilsk's website.

The Activox technology, which was to have been commercially employed for the first time at Tati, is a patented hydrometallurgical process that recovers nickel and copper metal from sulphide concentrates.

It combines smelting and refining, after a dense-media separation process, and has a high recovery rate, allowing low-grade ore to be profitably mined.

However, higher construction, equipment and project management costs, as well as short-term energy constraints in the region, meant that the 'incremental' improvements that would be achievable through the Activox process at Tati did not justify the capital expenditure and project risk, the company said in an emailed statement.

Prices for nickel, which was trading at $22, 000/t on Wednesday, have slumped about 40 percent in the last two months.

The metal, used in the production of stainless steel, set a record of $51 800/t in May 2007.

Norilsk said that it would continue to develop the Activox process, and expected to process a large bulk sample of concentrate from its Kola operation, in Russia, at the test plant for the technology in Botswana.

'Norilsk Nickel continues to develop the Activox hydrometallurgy technology as a viable process for nickel sulphides and the Activox demonstration plant in Botswana will continue to operate as a large scale test site producing LME-grade nickel and copper cathodes,' the company said.

Meanwhile, Norilsk has started commissioning a larger, 12-million ton a year dense-media separation plant at Tati Nickel.

The plant, which selectively increases the head grade of run-of-mine material, is expected to increase annual production at Tati from 14, 500 t to 22, 000 t of contained nickel in concentrate, reduce cash operating costs and extend the mine's life by seven years, to 2019.

'Despite the postponement of the Tati Activox refinery project, the Tati nickel mine has a sustainable, long-term future with a current life of mine to 2019, ore reserves of 99-million tons, mineral resources of 98-million tons and forecast annual nickel production of 22 000 t of nickel in concentrate from 2009,' the company said.

Norilsk is also studying the potential of extending the operation's life by developing the nearby Selkirk deposit as an openpit mine.

A prefeasibility study is expected to be completed by the end of this year.

The Selkirk underground mine began production in 1989 and was placed on care and maintenance in 2002.
(Mining Weekly)