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| SMSP Is Interested To Develop Low Grade Ores As Next Phase Of Koniambo Nickel Project |
| = New Caledonia, Measure To Utilize Remaining Nickel Ores |
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While the Koniambo nickel project has been supported by Northern Province Government of New Caledonia to develop it, SMSP ( Societe Miniere du Sud Pacifique ), which is a major mining company of nickel ore in New Caledonia and has shared 51% of capital investment in this project, announced recently to finance US$1,500 million, corresponding a 50% of the total expenditure to develop the Koniambo nickel project, and, therefore, this nickel project has been finally determined to go ahead and to materialize. SMSP held on the 7th of September the Board of Directors and decided this financing. In order to produce 60,000 tons per annum of nickel in ferro-nickel at full capacity from 2012 - 2013, the work to materialize the Koniambo nickel project is expedited with a high pitch and this nickel project has possessed 2 million tons of nickel contained in the reserves, which will enable to supply stably nickel ore for a long period of 70 years and are expected to become a seldom promising nickel project in the world. According to the official announcement made in 2004 ( the time of Falconbridge ), the nickel reserves possessed by SMSP are <> indicated ore quantity : 142.1 million tons, grading 2.13% of nickel content, and <> inferred ore quantity : 156 million tons, grading 2.2% of nickel content. Apart from garnierite ore to be supplied to the Koniambo nickel refinery, laterite ore and low grade garnierite ore are accumulated at the Koniambo mine as remaining nickel ores after mining and, therefore, it seems to come up as the subject for SMSP that is how to utilize these remaining ores ( mainly to produce nickel metal by means of adopting PAL method ) as a target for the next phase of this nickel project. The reason, why SMSP is now able to finance a 50% of US$3,000 million as the amount to be required for this nickel project, has owed to higher nickel prices continued for 2 years ( reportedly, SMSP has earned a profit of US$100 million per annum for the latest financial year ). Also, in the course of recent years, SMSP has established a joint venture with Posco, a major steel company of South Korea, to produce 30,000 tons per annum of nickel in ferro-nickel at the site of Posco's Kwangyang Works in South Korea, which is scheduled to start the production from January - March quarter of 2009, and this materialization of the joint venture has caused to strengthen the financial status of SMSP as an enterprise. Accordingly, the nickel projects in New Caledonia have totaled to the three to be materialized. Namely, (1) Eramet, as the oldest enterprise in New Caledonia to produce nickel, has preceded to expand the capacity at the Doniambo refinery and is anticipated to produce 75,000 tons per annum of nickel in ferro-nickel from 2008., (2) CVRD has invested US$3,000 million in the Goro nickel project to produce 60,000 tons per annum of nickel metal by PAL method from January - March quarter of 2009., and (3) Xstrata has been proceeding the Koniambo nickel project as a joint venture with SMSP and is scheduled to produce 60,000 tons per annum of nickel in ferro-nickel from 2012 - 2013 as mentioned above. In New Caledonia with population of 240,000 people, the three nickel projects, each of which is planned to produce nickel on a scale of 60,000 - 70,000 tons per annum, are going to materialize at the heels. Consequently, in parallel with these three nickel projects, nickel mines will be operated on a large scale to feed raw material to the projects and, by taking into accounts of manpower and infrastructure in New Caledonia, there is an opinion in the market that additional new projects to produce nickel in New Caledonia will be difficult to materialize from a real point of view. For a reference, when a plan to elevate further the economy in New Caledonia by means of utilizing nickel resources comes up, the base to refine nickel ore will be suggested to be sought in overseas countries. The nickel project arranged by SMSP as a joint venture with Posco to produce ferro-nickel at the Kwangyang refinery of South Korea was initially criticized to do not leave the base for nickel refining in New Caledonia ( working population is a small number ) but, in view of the economic foundation, particularly manpower base, in New Caledonia, this arrangement is now thought to be a suitable measure. SMSP bears a 50% of the fund to develop the Koniambo nickel project and, consequently, it is supposed that SMSP will acquire the right to sell half of nickel in ferro-nickel ( 30,000 tons / year ) to be produced at this project. SMSP has already set up the structure to produce ferro-nickel in Kwangyang area of South Korea as a joint venture with Posco, a major producer of stainless steel in South Korea, and this tide will come in sight of Posco as the market to sell ferro-nickel to be produced at the Koniambo project. Since Posco has been consuming 90,000 tons per annum of nickel, it is thought to become a powerful safety valve for Posco to secure a stable supply of nickel through direct and indirect participations in the nickel projects on the basis of New Caledonia, where is a major country having possessed enough reserves of nickel. |
| last modified : Tue 25 Sep, 2007 [12:20] |
