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:: Xstrata Approves Koniambo Nickel Project
The Board of Xstrata plc has approved the development of the Koniambo project, a major long-life, low cost, open pit nickel mine, metallurgical plant and associated infrastructure located in the North Province of New Caledonia. Xstrata Nickel owns a 49% stake in Koniambo Nickel SAS (“KNS”); the remaining 51% share is held by New Caledonian joint venture partner Société Minière du Sud Pacifique (“SMSP”). Xstrata Nickel will lead the project implementation and operations development on behalf of KNS and has the right to appoint the President of KNS. Xstrata’s Board approval follows the recent approval by SMSP’s Board of the Koniambo project.
Koniambo will be among the world’s lowest cost producers of nickel with initial annual production of 60,000 tonnes of nickel in ferronickel per annum and substantial further high-return, brownfield expansion potential. First ore is expected to be processed in the first half of 2011, ramping up to steady state production in 2013.
Koniambo benefits from a world-class resource base, providing a mine life in excess of 25 years from 62.5 million tonnes of saprolite reserves grading 2.40% nickel at a 2.0% cut-off grade. This major resource also has the potential to extend mine life to well in excess of 50 years of economic production. The resource base currently comprises 142.1 million tonnes of measured and indicated saprolite resources at 2.13% nickel at a 1.5% nickel cut-off grade, 140.7 million tonnes of inferred saprolite resource, grading 2.16% nickel (1.5% cut-off) and 104 million tonnes of inferred limonite resources at 1.5% nickel (1.2% cut-off).
Nickel will be produced using Xstrata Nickel’s Nickel Smelting Technology which integrates calcining, reduction and smelting unit operations from the mineral processing industry with dust containment and counter-current gas flow technologies from the cement industry. The benefits associated with this technology include higher metallurgical recoveries, improved dust containment and lower operating costs than conventional ferronickel operations.
Ian Pearce, Xstrata Nickel Chief Executive, commented, “Koniambo is the most attractive undeveloped nickel resource in the world and will be a cornerstone asset for the future growth of our nickel business. The project will leverage Xstrata Nickel’s strong project development and metallurgical skills, using proven, low-cost nickel smelting technology and benefiting from the thorough analysis undertaken during the project renewal phase. The decision to proceed with this project underlines our confidence in the outlook for nickel.
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