Koniambo
At the end of 2010, the Koniambo project in New Caledonia was 69% complete and on track to process first ore in 2012, ramping up to annual capacity of 60,000 tonnes of nickel in ferronickel within the following two years.
A number of milestones were reached in 2010, including successful completion of dredging activities, wharf and ocean outfall construction, power station stack construction, modular construction of the metallurgical plant in China and delivery of those modules to site. Installation of Lines 1 and 2 of the smelter modules on site is also now complete. Pre-mining activity on the massif commenced in October. At the year-end, 50% of the total freight tonnes for procured materials had been successfully delivered to the site with 90% of materials projected to be on site by the end of March 2011 to support the construction programme. Overall site construction, which includes the smelter and power plant assembly, earthworks, conveyor construction and other utilities, was 30% complete. Site accommodation for 4,800 workers is in place, in line with plan and in anticipation of an increase in workforce during peak on-site construction activity in the first half of 2011.
Sudbury
A feasibility study on the Fraser Morgan project has commenced to examine a plan to produce approximately 6,000 tonnes of nickel per annum for 10 years and utilise spare capacity at the Fraser complex and Strathcona mill. Two advanced exploration projects are underway, highlighting the significant potential to identify additional resources in the Sudbury area.
Raglan
Underground development at the Kikialik deposit resumed in the second quarter of 2010 following a temporary deferral in 2009 due to market conditions. Kikialik is on schedule and on budget to deliver production in the fourth quarter of 2011 to replace declining production at other Raglan mines and maintain the operation’s 1.3 million tonnes per annum processing throughput. Kikialik contains a probable reserve of 2.1 million tonnes of ore grading 2.94% nickel and 0.85% copper, with a current eight-year mine life and considerable further exploration potential.
A prefeasibility study continues on the Qakimajurq project, a deposit containing 2.6 million tonnes of probable reserves grading 4.40% nickel and 0.90% copper. Construction on Qakimajurq is expected to begin in 2012, reaching full production capacity of an average 11,000 tonnes of nickel in concentrate in 2014, with a mine life of over 10 years based on existing reserves. Focused exploration continues in order to extend the life of existing mines and expand the resources of Kikialik and Qakimajurq.
Xstrata Nickel Australasia (XNA)
Sinclair continues to ramp up and will reach its expected full production of 6,000 tonnes of nickel in concentrate in 2012. XNA’s active exploration programme is focusing on the Cosmos area and further drill testing at the newly discovered Odysseus and AM6 deposits. XNA is also undertaking initiatives to derive value from disseminated ore potential with low-cost mill optimisation.
Nikkelverk
Additional low cost debottlenecking opportunities have been identified at the Nikkelverk refinery to increase capacity further to 93,000 tonnes of nickel by 2013. This follows successful initiatives that enabled the operation to increase capacity to 92,000 tonnes in 2009 without additional capital investment. A project to reduce already low acid plant SO2 emissions is in progress to bring emissions close to zero in 2011.
Falcondo
The Falcondo operations are restarting to a planned 50% of installed capacity by March 2011. Falcondo’s restart takes advantage of improved market conditions, optimisation of mining and production plant processes and the conclusion of a commercial agreement with a local power company for the supply of electricity, which will enable Falcondo to operate with reduced costs. The project to convert the long-term energy source for Falcondo’s process plant from oil to natural gas will continue in conjunction with the partial resumption of operations.
Kabanga Nickel
A feasibility study for the Kabanga Nickel project, a 50:50 joint venture with Barrick Gold Corporation, is expected to be completed in early 2011. It is anticipated that the project will take a staged approach to development, initially using a relatively low capital cost entry-level strategy with the option to ramp up to larger capacity in later years. The first stage is anticipated to deliver approximately 10,000 tonnes of nickel in concentrate on a 100% basis beginning in 2014.
Araguaia
The Araguaia project located in the north-western Brazilian state of Para has a measured and indicated resource base of 104.7 million tonnes at 1.33% nickel and an additional 18 million tonnes of inferred resources at 1.3% nickel with a 0.9% nickel cut-off grade. While higher priority is currently assigned to other projects in Xstrata Nickel’s pipeline, including Koniambo and Kabanga, the Araguaia project remains a longer-term growth option.
