As mentioned in my previous column, nickel can be produced
from either sulphide (Sudbury Basin) or laterite (Goro) ore.
About 72 percent of the world's nickel resources are laterites
deposits.
In the past two years, three major, billion-dollar plus
projects in Brazil, New Caledonia, and Australia confirm the
future of nickel production will be in laterites, using HPAL
technology.
In July 2005, Brazilian mining giant CVRD announced a
$1.2-billion  investment for its Vermelho Nickel Mine in
the Carajas region of northeast Brazil's Para state. Scheduled
to start in September 2008, the mine will produce 45,000 tpa of
nickel and 2,800 tpa of cobalt over a commercial life of 40
years. (All money values are in U.S. dollars unless indicated.)
In December 2005, CVRD took over Vancouver-based Canico
Resource Corp., which was developing the Onça-Puma nickel
laterite project in the same region. In addition, last
September, Falconbridge announced the discovery of a major new
laterite deposit at its Araguaia Nickel Laterite properties
also in the state of Para. Over the next decade, Brazil aims to
become a major nickel producer through its many laterite
deposits.
Inco confirmed the restart of its $1.9-billion 
laterite nickel project in Goro, New Caledonia in October 2004.
The 60,000 tpa nickel project should produce nickel at cash
costs of $1.10 - $1.15 per pound after cobalt credits of $7 per
pound. Despite its small size, New Caledonia, nicknamed the
Sudbury of the South Pacific, lays claim to 26 percent of the
world's total of nickel laterites.
During Goro's development since 1993, Inco has made
significant changes to the HPAL technology used in Australia.
Some changes include using higher operating temperatures to
move feed through more rapidly, using smaller autoclaves, and
concentrating nickel and cobalt at an earlier stage of the
process with a proprietary extraction technique.
In March 2004, BHP Billiton gave the green light to develop
the Ravensthorpe Nickel Laterite Project in Western Australia
at a cost of $1.4 billion. That figure includes an expansion
the company's Yabulu Refinery in Queensland.
In 1998, Falconbridge entered into a joint-venture agreement
with Societe Miniere du Sud Pacifique S.A. to develop the
Koniambo Ferronickel Project, which is located in the Northern
Province of New Caledonia. Koniambo, located near the
provincial capital of Kone, is one of the world's largest and
highest grade laterite saprolite deposits. The proposed 60,000
tpa of nickel operation in a ferronickel mining and smelting
complex would start production in 2009 at the earliest. Last
December, French nickel miner Eramet SA, which has been mining
nickel in New Caledonia since the late 1800s lost a court
challenge in which it tried to stop Falconbridge from taking
ownership of this $2.2 billon project.
Other Canadian junior mining companies with potential
laterite projects include Dynatec Corporation's proposal in
Ambatovy, Madagascar, Sky Resources in Guatamala, and Weda Bay
Minerals Inc., which is working to develop the Halmahera
laterite deposits in Eastern Indonesia. In March, French nickel
miner Eramet SA has offered $270 million (CDN) in a friendly
takeover of Weda Bay.
Problems in New Caledonia
In the world of nickel, the recent vandalism and work stoppage in New Caledonia helped send price shock waves on metal markets that resulted in record highs for this essential commodity.
In early April, a small group of Kanak protesters, the
Rheebu Nuu, erected blockades, caused extensive damage to
equipment and threatened employees at the Goro worksite. As of
April 24, construction at the project has slowly resumed. New
Caledonia is a French territory in the South Pacific.
The Kanak Rheebu Nuu, who are supported by the Canadian NGO
Mining Watch, claim to be very concerned about environmental
issues and also want royalties from the mine. The Kanak
pro-independence movement, FLNKS, does not support the Rheebu
Nuu's claims for royalty payments. Of the 1,800 workers at
Goro, 1,600 are New Caledonian. There have been tremendous
opportunities for New Caledonian contractors and other
businesses, including the surrounding communities. New
Caledonia has one of the highest per capita incomes in the
Pacific.
In the Goro agreement, the three provinces of New Caledonia
hold a 10 percent equity interest in the project while Inco
holds 69 percent interest and Sumitomo Metal Mining and Mitsui
own the remainder.
In an April 19th news release the president of New
Caledonia, Marie-Noelle Themereau states, "Current
metallurgical projects in the north and the south constitute a
unique opportunity to create thousands of direct and indirect
jobs that the country needs. They also create wealth and bring
economic and fiscal benefits….Yet, Rheebu Nuu has chosen to
sabotage the site, interrupt traffic and pressure people and to
definitely compromise this development, which is so wanted by
Caledonians."
Early on Inco decided to use land disposal of mine tailings
as opposed to ocean disposal to address public concerns about a
potential threat to the island's marine ecosystem and coral
reefs. Marine disposal of tailings is commonly used in many
other jurisdictions due to cost savings. Extensive
re-vegetation programs will take place once the tailings are
dry.
Effluent from the plant will be effectively treated and the
discharge pipe strategically located to take advantage of ocean
currents for rapid dilution. The Goro project has undergone
extensive environmental studies required under New Caledonian
and French laws. In addition, extensive public reviews and
hearings were conducted.
Goro ranks among the world's greatest nickel laterite
resources, both in terms of size and grade. Inco says that it
plans to be in New Caledonia for 100 years or more. The company
intends to hire 90 percent local people to fulfil the 800 jobs
required when Goro becomes operational. An extensive training
program has been implemented.
One final interesting note on New Caledonian nickel
politics: in November 2005, a massive protest rally in Noumea,
the capital, was in support of Falconbridge's Koniambo project.
The proposed nickel processing plant, which will use
traditional pyrometallurgical technology as opposed to the HPAL
system, would be an integral pillar of economic development and
employment in the rural north of the island. Most of the
economic infrastructure is in the south.
To date, no major HPAL project has yet come on stream
without going over initial capital costs. The technology is
still tricky needing custom technical solutions for each
individual ore deposit. That is why Inco had invested time and
money in a pilot plant for their Goro project.
In
www.miningnews.net
, an Australian website, Minara CEO Peter Johnson who
miraculously saved the troubled laterite project at Murrin
Murrin in Western Australia suggested, "…the market is being
overly optimistic about the big laterite operations at
Ravensthorpe and Goro being able to quickly reach capacity."
BHP Billiton's Ravenstorpe project, scheduled to start
shipping product in 2007, has already seen its cost estimates
increase by an additional $400 million to $1.8-billion. That
project will establish a cost benchmark with the new generation
of HPAL technologies and lessons learned from Murrin Murrin.
However, many analysts feel the long-term price of nickel
must rise to reflect the high capital costs of nickel laterite
projects. Some even feel that nickel is becoming the new oil
due to booming demand and a shortage of future projects. It has
been repeatedly stated that "a new Goro is needed nearly every
year to match long-term demand growth."
Nickel laterite mining is here to stay. The potential growth
in sulphide deposits will not be enough to meet global nickel
demands. The technical engineering challenges of making HPAL
more efficient and economical will be overcome.
As the Chinese, Indian and Brazilian economies modernize, an increasingly metal-hungry world will have no choice but to depend on laterite nickel deposits to meets its needs.
Stan Sudol is a Toronto-based communications consultant and freelance journalist who writes extensively on mining issues.[email protected]