Nickel
Nickel
Bill McCutcheon The author is with the Minerals and Metals Sector, Natural Resources Canada. Telephone: 613-992-5480 E-mail: [email protected]
OVERVIEW
R
ecord high nickel (Ni) prices resulting from years of low prices and delays in new project completion led to increased substitution. The London Metal Exchange (LME) modified its “Lending Guidance” in June and prices dropped sharply thereafter. World stainless steel production decreased by 2% to 27.8 Mt in 2007 from a record high of 28.4 Mt in 2006. World production and use of primary nickel in 2007 were 1.43 Mt and 1.32 Mt, respectively, compared to 1.36 Mt and 1.40 Mt in 2006. Cash settlement nickel prices on the LME were a record average of US$37 320/t and peaked at a record high of US$54 200/t in May. Full corporate names and corporate web sites are found in Table 3. The locations of Canadian nickel facilities (21 mines, 6 concentrators, 3 smelters, and 3 refineries) are shown in Figure 1. Canadian nickel mine production is shown in Table 5. Details about cobalt are limited to tables about Canadian trade, tariffs, and production/use. World cobalt production data can be found at www.thecdi.com/ cobalt-stats.
ing Canadian companies (beginning with CVRD acquiring Canico2 for its Onça-Puma project in 2005) continued in 2007. CVRD completed the US$17.7 billion purchase of Inco Limited in January 2007, creating CVRD Inco Limited, a Toronto-based subsidiary to manage CVRD’s nickel business. In November, CVRD Inco was renamed Vale Inco Limited. Glencore, a major shareholder in Xstrata, began marketing Xstrata’s nickel and cobalt output from the former Falconbridge operations (Falconbridge was purchased by Xstrata in 2006). Sherritt bought Dynatec and its 45% interest in the Ambatovy project in Madagascar. Norilsk Nickel bought LionOre Mining. Lundin Mining bought Rio Narcea Gold and its Aguablanca nickel mine in Spain. Belvedere purchased the Hitura mine in Finland from Outokumpu.
Vale Inco Vale Inco produced a record 247 000 t of finished nickel3 from its worldwide operations and planned to produce 280 000 t in 2008. The 60 000-t/y Goro project was expected to start up before 2009 and the 58 000-t/y Onça-Puma project was expected to start up in early 2009. In Newfoundland and Labrador, Voisey’s Bay (VB) sent high-grade nickel concentrate to smelters at Thompson and in Europe (to Boliden’s smelter in Finland). VB’s bulk nickel-copper concentrate went to Vale Inco’s Sudbury smelter. VB copper concentrate was sold to third parties. The Province requires Vale Inco to build a 50 000-t/y nickel refinery in the province before 2012 to process either matte or concentrate to refined nickel, and Vale Inco submitted the environmental impact statement for such a facility at Long Harbour to start up in 2011.
The value of Canadian nickel production set a record in 2007 at an estimated $9.8 billion (US$9.1 billion1), due to high prices and increased output. Canada has no operating stainless steel mills; the Canadian use of nickel was estimated at about 7000 t. Nickel exports in 2007 totaled $11 billion.
In Sudbury, Vale Inco’s and FNX’s mines sent ore to the Clarabelle mill, which produced a bulk nickel-copper concentrate and a copper concentrate. Vale Inco mines produced 7.9 Mt of ore that contained 98 000 t of nickel. FNX sent about 0.89 Mt of ore to Vale Inco; sales were recorded as about 5500 t after smelter deductions. Clarabelle produced a separate copper concentrate containing perhaps 30% of Vale Inco’s Sudbury copper production, which was smelted elsewhere.
Continued high prices fueled further exploration and development of deposits. Mergers and acquisitions affect-
Vale Inco’s bulk nickel-copper concentrates were smelted in Sudbury and then refined at the Copper Cliff carbonyl
CANADA
CANADIAN MINERALS YEARBOOK, 2007
Figure 1 Nickel in Canada, 2007
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P.E.I. Ont.
Producers Smelters Refineries
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Numbers refer to locations on map above
PRODUCERS 1. Xstrata Nickel Limited (Fraser, Thayer-Lindsley, Craig) 1. First Nickel Inc. (Lockerby) 1. Vale Inco Limited (Copper Cliff North, Copper Cliff South, Creighton, Garson, Gertrude, McCreedy East/Coleman, Stobie) 1. FNX Mining Company Inc. (McCreedy West, Levack) 2. Vale Inco Limited (Thompson, Birchtree) 3. Xstrata Nickel Limited (Raglan) 4. North American Palladium Limited (Lac des Iles) 5. Xstrata Nickel Limited (Montcalm) 5. Liberty Mines Inc. (Redstone) 6. Vale Inco Limited (Voisey’s Bay)
SMELTERS 1. Xstrata Nickel Limited (Falconbridge) 2. Vale Inco Limited (Copper Cliff) 3. Vale Inco Limited (Thompson)
REFINERIES 1. Vale Inco Limited (Sudbury) 2. Vale Inco Limited (Thompson) 3. The Cobalt Refining Company Inc. (Fort Saskatchewan)
NICKEL
refinery or at Vale Inco’s Clydach carbonyl refinery in the United Kingdom, or were recovered as nickel oxide (NiO) in Sudbury. Production from the Sudbury mines was supplemented by large amounts of third-party feeds and the bulk nickel-copper concentrate produced at VB. Vale Inco reported that Sudbury and Clydach recovered 70 700 t of nickel from ore produced in its Sudbury mines. Vale Inco’s SO2 emissions were 150 000 t. NiO was marketed to stainless steel producers or was sent to Asian refineries for upgrading. As its Sudbury nickel production was limited by difficulties with matte processing, production problems at Clydach, and ground control issues at the Sudbury mines, Vale Inco committed US$250 million to resolve those problems in 2008. The US$362 million Totten mine was to start up in the first half of 2011 with production of 8200 t/y of recoverable nickel, plus copper and platinum group metals (PGM). Kelly Lake, identified in 1997, was in the prefeasibility stage with proven plus probable reserves in 2006 of 9.6 Mt @ 1.49% Ni and 1.18% Cu; PGM contents were said to be 1.8 g/t in 2000. At Thompson, Vale Inco mined about 2.5 Mt/y containing about 43 000 t of nickel that was processed at the Thompson concentrator. The Vale Inco smelter and refinery produced metal from the Manitoba ores and from high-grade concentrate from Voisey’s Bay. The smelter emitted 192 000 t of SO2.
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7500 t/y of nickel (eight-year life). Both were scheduled to start up in 2009 and to operate at capacity in 2010. NRS will produce development ore in 2008. In mid-2007, NRS’s inferred resources were 14.5 Mt @ 1.6% Ni, 3.1% Cu, 0.03% Co, 1.7 g/t Pt, and 1.9 g/t Pd; grades of 0.8 g/t Au and 15 g/t Ag were reported for NRS in 2005. Xstrata committed US$8.7 million to extend Thayer-Lindsley’s life to late 2012. Xstrata planned to reactivate 1 Mt/y of idled capacity at Strathcona to accommodate Nickel Rim South and Fraser Morgan output. Start-up of the Onaping Depth operation (10 000 t/y of nickel in ore) to replace output from the Craig, Fraser, and Thayer Lindsley mines could increase Xstrata’s Sudbury mine production to 40 000 t/y of nickel. Xstrata planned to increase smelter throughput in Sudbury to a minimum of 80 000 t/y of nickel in matte. The smelter processed all material from Xstrata Nickel’s operations plus third-party feed and recyclable feeds, and sent all the matte to Xstrata’s refinery in Norway. Xstrata did not release precious metals production data. Prior to being purchased, Falconbridge had reported PGM and nickel production at Nikkelverk of:
Year
PGM
Nickel
(tonnes) 2001 2002 2003 2004 2005
Vale Inco produced 1304 t of refined cobalt (99.8% purity) at its Port Colborne refinery and 728 t of cobalt hydrate (containing about 180 t of cobalt) at Thompson, and shipped 495 t of cobalt in intermediate products to other companies for recovery.
7.49 10.72 12.67 14.02 12.96
68 200 68 500 77 200 71 400 84 900
Xstrata Nickel Sudbury Synergies At the 1.1-Mt/y Raglan operation in northern Quebec, expansion to 1.3 Mt/y was under way. Xstrata expected to increase throughput to 1.5 Mt/y by 2011 and possibly to 2 Mt/y by 2013. All concentrate was sent to the company’s Sudbury smelter. Production at the Montcalm mine near Timmins declined because of the lower grade despite an increase in tonnage mined. The Strathcona concentrator treated 1.866 Mt of ore @ 1.04% Ni and 1.10% Cu from Xstrata’s Sudbury mines to yield concentrates containing 19 575 t of nickel, 21 853 t of copper, and 620 t of cobalt plus unstated amounts of precious metals. Strathcona treated 0.31 Mt of custom ore in 2007 (including feed from First Nickel, URSA Major, and Vale Inco), down 15% from 2006. Xstrata’s Sudbury smelter produced 67 576 t of nickel, 21 978 t of copper, and 2498 t of cobalt in matte, and emitted 40 250 t of SO2. Xstrata forecast 2010 nickel production from its Sudbury mines at 34 000 t/y, compared to 19 800 t in 2007. Two important new operations for Xstrata will be Nickel Rim South (NRS) with a production rate of 16 000 t/y of nickel (16-year life) and Fraser Morgan with a production rate of
Xstrata and Vale Inco examined possible joint synergy projects at the Thayer-Lindsley, Blezard, and North Range deposits; mini-pit processing; and smelting of intermediate feeds. Xstrata processed a record amount of intermediate feed from Vale Inco in 2007.
Sherritt Sherritt and the Cuban government each owned half of the Moa Joint Venture whose assets included the CRC nickelcobalt refinery in Alberta and a mine/leach plant in Cuba. The Phase 1 expansion at CRC will increase refined nickel plus cobalt output by 4000 t/y by mid-2008; Phase 2 will add another 9000 t/y of nickel plus cobalt before mid-2009. A Phase 3 expansion to 3000-6000 t/y of nickel and cobalt was also being considered. CRC sourced 83% of its nickel and 87% of its cobalt inputs from the Moa Bay operation. Sherritt purchased Dynatec in mid-2007 for $1.6 billion and thereby acquired a 40% share in the Ambatovy nickel project in Madagascar.
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CANADIAN MINERALS YEARBOOK, 2007
Lac des Iles NAP operated an underground mine and an open pit that produced palladium and by-product nickel, platinum, gold, and copper, and was assessing a project to extend the pit life beyond two years. The company sent concentrate to Xstrata’s Sudbury smelter. NAP expects to decide in the first half of 2008 whether to proceed with the Shebandowan West project where ramp access could allow mining of 500-1000 t/d starting in 2009.
(about 30 000 t/y in total, or about 5000 t/y of nickel). After delays in obtaining federal permits for tailings storage, Crowflight applied for an interim land-based storage facility in December. A brief summary of some of the other potential nickel projects in Canada not noted in the text above is shown below. Space does not permit discussion, but detailed information is available on the company web sites (see Table 3) or from www.sedar.com.
First Nickel
Company
Project
First Nickel delivered 0.124 Mt of ore grading 1.57% Ni to the Strathcona mill; payable nickel was estimated to be about 75% of contained nickel, or 1478 t of nickel. First Nickel delivered a feasibility study of the Premiere Ridge project to Xstrata Nickel in July.
Canadian Royalties Crowflight Hard Creek Independent4 Kenbridge Mustang Starfield Resources Victory Nickel
Nunavik Manibridge Turnagain Lynn Lake Canadian Arrow Maskwa Fergusen Lake Lac Rocher, Mel, Minago
FNX FNX’s Levack and McCreedy West mines sold ore to Vale Inco containing 5535 t of nickel plus copper, cobalt, and precious metals. FNX’s Podolsky project produced 16 400 t of pre-production ore and should start commercial production in 2008.
Further details about mineral exploration and development activities in Canada can be found in the Canadian Minerals Yearbook chapter entitled “Mineral Exploration, Deposit Appraisal, and Mine Complex Development Activity in Canada.”
Liberty Mines The Redstone mine started commercial production and commissioned its 1500-t/d mill in July. In November, Liberty began shipping its concentrate to Xstrata’s Sudbury smelter, which offered payment for by-product copper, cobalt, and precious metals. Liberty signed a new agreement with Jilin Jien to export up to 20 t/d of concentrate. Liberty planned to start pre-production at the nearby McWatters project in May 2009, ramping it up to 12001300 t/d by November. Liberty also planned to start preproduction at its Hart project in late 2009.
URSA Major URSA obtained permits to proceed with the 4500-t/d Shakespeare project, which had probable reserves of 11.8 Mt @ 0.33% Ni with by-product copper, cobalt, platinum, palladium, and gold. URSA sent a 50 000-t bulk sample to Xstrata’s Strathcona mill, and then negotiated an agreement with Xstrata to ship 500 t/d of ore to Strathcona for one year starting in June 2008. Ore production in 2008 was forecast at 185 000 t; no average grade was stated.
OTHER PROJECTS In addition to the projects noted above, Crowflight’s Bucko Lake project in Manitoba was expected to start production in late 2008. Crowflight’s life-of-mine offtake contract with Xstrata Nickel covered all concentrate produced at Bucko
WORLD PRODUCTION OVERVIEW Table 9 presents data about the production of finished nickel from 2004 to 2007, and Table 8 presents data about sulphide mining and some laterite mining operations in 2004-07; data are generally not repeated in the discussion below. Data were not found for all operations, and some data are estimated. Many laterite mining operations do not report mining tonnages and grade either used in an on-site smelter or hydrometallurgical plant, or exported for recovery at another plant and, for these instances, the facility is shown without data. Production from such operations is generally captured at the finished nickel stage in Table 9. Nickel came from three principal sources: nickel sulphide deposits, nickel laterite deposits, and scrap. All Canadian nickel was sourced from sulphide deposits. Laterite deposits, such as those in Indonesia and the Philippines, result from the weathering and enrichment of ultramafic rocks producing limonites (nickel oxides) overlying saprolites (nickel silicates). Most nickel sulphides were processed by concentration, smelting, and refining, although hydrometallurgical processing of sulphide ores began in Canada 50 years ago at Fort Saskatchewan. The limonitic portion of laterites was mainly processed by acid or ammonia leaching followed by solvent extraction and reduction. Saprolite ore was mainly converted to ferronickel in smelters.
NICKEL
Nickel that is never used in semi-fabrication is termed “primary” nickel. Scrap stainless steel was the source of most recycled nickel. More details about nickel recycling can be found (in English only) at http://pubs.usgs.gov/circ/ circ1196-Z/pdf/circ1196-Z.pdf.
Australia BHPB’s US$2.2 billion Ravensthorpe mine and leach plant in Western Australia shipped mixed nickel-cobalt hydroxides to Yabulu in December. The design capacity of Ravensthorpe was 50 000 t/y of nickel in mixed nickelcobalt hydroxides. BHPB spent US$580 million to expand Yabulu to refine Ravensthorpe output, in addition to Yabulu’s capacity to produce 32 000 t/y of nickel from imported laterite ores.
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Compass expected its A$100 million Browns Oxide Project to complete commissioning in the second quarter of 2008 (700 t/y of nickel and 1000 t/y of cobalt in mixed nickelcobalt carbonate as a by-product of copper). Hunan Nonferrous Metals agreed to become a partner in the project and will take half of the output. Gladstone Pacific released a feasibility study for a US$3.7 billion nickel refinery in Queensland. The 63 000-t/y refinery would take laterite ore from Marlborough and imports from New Caledonia. Heron was advised by Vale Inco that it would proceed with a study of the Kalgoorlie nickel project; a prefeasibility study was to be completed by early 2009.
Botswana BHPB’s NiWest operation in Western Australia consisted of sulphide mines, three concentrators, a smelter, and a refinery. Kalgoorlie smelter matte went to the 65 000-t/y Kwinana refinery; in 2007, Kalgoorlie also exported matte to Jinchuan, Harjavalta, and Sumitomo. BHPB approved the US$139 million Cliffs mine that will produce 8500 t/y of recoverable nickel starting in the fourth quarter of 2008. BHPB did not release annual or quarterly sulphide mine or concentrator production for individual operations in Western Australia. Third-party mines supplied the Kambalda concentrator with an estimated 42 500 t of nickel in ore. Minara forecast production of 32 000-36 000 t in 2008, plus 2000 t from its heap-leach demonstration plant. A fullscale A$300 million heap-leach operation to produce 800010 000 t/y of nickel from low-grade ore was approved in principle. Glencore owned 53% of Minara and 40% of the Murrin Murrin joint venture. Jubilee’s contract for the delivery of concentrates to Vale Inco ended and Jubilee began delivering concentrate to BHPB in September. In October, Xstrata announced its takeover bid for Jubilee. Jubilee started mobilizing for development of the Sinclear project in December. In Tasmania, the new Avebury mine had 45 000 t of ore in stockpiles awaiting completion of its concentrator (expected in the fourth quarter of 2008); the concentrate will be sent to Jinchuan. At year-end, Zinifex was bidding for Allegiance Mining, owner of Avebury. Space does not permit discussion of all nickel operations in Australia. Notable changes in 2007 included Norilsk’s purchase of Lake Johnston, Black Swan, the Cawse mine/leach plant, and the Waterloo mine, which were obtained by buying LionOre and the nickel assets of OMG. Palmary Enterprises stated its intention to acquire the remaining 26% of Consolidated Minerals, which owned the Beta Hunt and Widgiemooltha mines (both delivered ore to the Kambalda mill). Mincor purchased the Otter Juan mine and the McMahon and Durkin projects from GMM Pty Ltd. in mid-year for A$68 million.
BCL operated mines, a concentrator, and a smelter. BCL sent matte to Nikkelverk in Norway and to the Empress refinery in Zimbabwe. When Norilsk bought LionOre in March, it also acquired Tati Nickel. Tati produced 25 300 t of nickel in concentrate that was smelted at BCL. Norilsk indefinitely postponed the Activox project, which was piloted at Tati and had produced refined nickel and copper.
Brazil Work continued at the 36 000-t/y US$1.5 billion Barro Alto mine and ferro-nickel smelter for start-up in 2010. Votorantim Metais operated a laterite mine and Caron process plant that was supplying its refinery in Sao Paulo. Votorantim’s Forteleza smelter sent matte to Harjavalta; the operation took feed from the Fortaleza mine and from Pro Metalica’s Americano do Brazil operation. Votorantim was also building a 10 600-t/y ferro-nickel smelter to start up in 2009. Vale Inco had two laterite projects in Brazil: the US$1.9 billion, 46 000-t/y Vermelho mine-leach plant/ refinery to start in 2012, and the US$2.3 billion OnçaPuma mine/ferro-nickel smelter project to start in 2009. A feasibility study of a hydrometallurgical plant at OnçaPuma was to be completed in 2008.
China Jinchuan was the country’s largest nickel refiner with finished nickel output of about 110 000 t. It produced about half of its production from its own mines and purchased concentrates and matte from other Chinese producers and overseas sources, including concentrate from Australia (Sally Malay and Radio Hill) and Spain (Aguablanca), and matte from Russia and Australia. Nickel pig iron (NPI) production was the most novel nickel production development since the Australian foray into pressure leaching in the late 1990s. Production estimates differ, but Eramet put its contained nickel production at 85 000 t in 2007, up from 26 000 t in 2006. While NPI had
38.6
CANADIAN MINERALS YEARBOOK, 2007
high production costs, lower nickel prices will force NPI producers to either reduce costs or close. NPI represents new “swing production” capacity, albeit at a high cost. Jilin had a capacity of 25 000 t/y of nickel sulphate containing about 8000 t of nickel. Jilin imported concentrate from Liberty’s Redstone mine, but Liberty later sent its concentrate to Xstrata’s Sudbury smelter in late 2007. Jilin planned to build a new Ausmelt smelter (capacity of 200 000 t/y of concentrates to produce 15 000 t/y of nickel in nickel-copper matte) and reportedly completed a 2000-t/y nickel carbonyl facility using CVMR technology. Xinxin was the third largest producer of nickel cathode in China with mining, concentration, and smelting facilities at Kalatongke and a refinery at Fukang. Xinxin planned to produce 7000 t of nickel, 4200 t of copper, and 50 t of cobalt in 2008, and to finish an expansion to 13 000 t/y of refined nickel. Jiangxi Jiangli started up a hydrometallurgical plant (capacity of 2000 t/y of nickel) to process imported laterite ores; the plant capacity was to increase to 5000 t/y in 2008. Vale Inco’s US$65 million, 32 000-t/y refinery at Dalian was to start up in 2008 and will process nickel oxide from Goro into Utility nickel for Chinese stainless steel producers. The Chinese government provided support to importers of nickel ore through its “Interim Measures for the Administration of Import Discount Interest Funds.”
Colombia Cerro Matoso produced low-carbon ferro-nickel from its laterite mine. The 50 000-t/y nickel in ferro-nickel operation could be expanded by between 50% and 100% within 10 years, assuming future feasibility studies were positive.
Cuba The Moa Joint Venture’s laterite mine and leach plant in Cuba produced nickel-cobalt mixed sulphide precipitates for export to CRC’s refinery in Canada. An expansion, funded equally by Cuba and Sherritt, was under way to increase capacity from 33 000 t/y of nickel plus cobalt in sulphides to 37 000 t/y in 2008 and 46 000 t/y in 2009. A 2000-t/d acid plant was scheduled to start up in 2009. A third-phase expansion to 49 000-52 000 t/y was in the conceptual stage. Union del Niquel, the state producer, operated two plants (Rene Ramos Latour at Nicaro and Che Guevera at Moa) that together produced an estimated 39 000 t of nickel plus cobalt.
Dominican Republic Falcondo’s laterite mine and ferro-nickel smelter used power from its oil-fired power plant and therefore had high operating costs. A study to convert from oil to coal was initiated with targetted savings of US$3300/t of nickel in operating costs, or US$96 million per year.
Finland Norilsk Nickel purchased OMG’s nickel assets in March, including the 60 000-t/y Harjavalta refinery, which took matte from Boliden’s on-site smelter, Votorantim’s Fortaleza smelter, and BHPB’s Kalgoorlie smelter. As well, Harjavalta took nickel carbonate intermediates from Cawse in Australia. Boliden’s concentrate feed sources included Silver Swan in Australia, Titania in Norway, and Voisey’s Bay in Canada. Belvedere bought the Hitura and Särkiniemi mines from Outokumpu, delivering nickel concentrate to the Boliden smelter for processing to matte to supply Harjavalta. Talvarivaara started construction of a mine and bioheapleaching project to produce 33 000 t of nickel and 1200 t of cobalt in sulphide precipitates, as well as zinc and copper.
France Eramet’s Sandouville refinery took matte grading 75% Ni from Doniambo to produce high-purity cathodes and chemicals.
Greece Larco targeted production of 20 000 t of nickel aided by imported ore from Turkey and Indonesia, and by a new convertor that was to increase capacity to 21 500 t/y.
Indonesia PT Antam’s new FeNi III smelter closed for three months due to a leak. Antam’s feed came principally from PT Inco’s Pomalaa East mine (about 650 000 dry tonnes grading 2.3% Ni). Antam exported 6.9 million wet tonnes of ore, a record high. Higher-grade ore went to ferro-nickel smelters in Japan and Eastern Europe while lower-grade ore went to NPI plants in China. Antam signed two agreements to investigate potential projects. The first agreement with BHPB for the Pearl project will look at a US$1 billion ferro-nickel operation producing 30 000-50 000 t/y of nickel in ferro-nickel and a US$3 billion hydrometallurgical plant producing 60 000 t/y of nickel plus cobalt. The second agreement with Tsingshan Holding Group for the Obi project will examine a US$150-$230 million project that will include a mine, a 75 000-t/y nickel in nickel pig iron facility, and a stainless steel plant. Eramet expected to decide in 2009 whether to develop a 60 000-t/y nickel hydrometallurgical operation at Weda Bay by 2013. PT Inco received a forestry permit that will allow construction of a 90-MW dam and power plant to permit smelter expansion to 90 700 t/y of nickel in matte by 2011. PT Inco shipped matte grading 78% Ni to TNC and Sumitomo in Japan. Cobalt in matte totaled 1200 t in 2007.
NICKEL
Japan Sumitomo planned to expand its production capacity (for nickel in metal and nickel in ferro-nickel) from 57 000 t/y to 100 000 t/y by 2013; plans were to spend ¥5 billion in 2008. Increased feed was to come from Goro (late 2008), the Coral Bay expansion (2009), and Taganito HPAL (2012). If approved, these projects would allow the refinery to expand to 41 000 t/y in 2009 and to 65 000 t/y by 2013. Pamco, Nippon Yakin, and Hyuga had combined production of 68 300 t of nickel in ferro-nickel. Vale’s TNC plant produced nickel oxide from PT Inco.
Korea Posco and SMSP established the SNCC Joint Venture, owned 51% by SMSP and 49% by Posco. SNNC began construction of a 30 000-t/y nickel in ferro-nickel smelter at Gwanguang to process ore from NMC in New Caledonia. Vale Inco owned 25% of the KNC facility at Onsan, which upgraded nickel oxide from Canada, Japan, and Australia for the stainless steel industry.
Kosovo Cunico purchased the Ferronikeli plant at Glogovac in 2006 and restarted it in 2007. Planned output was 1450 t of nickel in ferro-nickel in 2007, increasing to 7000 t in 2008. Feronikeli’s output from the Chikatovo and Glavitca mines, supplemented by third-party material (including imports from Indonesia, Albania, New Caledonia, and Turkey), was smelted to produce ferro-nickel grading 23% Ni.
Macedonia Cuninco’s Feni operation took ore from its Rzanovo mine plus imports from Turkey, Albania, and New Caledonia. The ferro-nickel smelter increased output from 5000 t/y in 2005 to about 16 000 t/y of nickel in ferro-nickel grading about 22% Ni. Feni was to complete a third line before 2010.
Madagascar Sherritt owned 40% of the Ambatovy joint venture after purchasing Dynatec in June. Other owners were Sumitomo Corporation and Korea Resources Corporation, each with 27.5%, and SNC-Lavalin with 5%. Construction of the US$2.1 billion laterite mine, leach plant, and 60 000-t/y nickel refinery (plus 5600 t/y of cobalt) began in November. The start-up target date was 2010 with full capacity to be achieved in 2012/13.
New Caledonia New Caledonia produced 7.6 million wet tonnes of laterite ore containing 125 400 t of nickel. A map showing the producing mines and companies in New Caledonia was avail-
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able at www.isee.nc/anglais/teca/productivesystem/ minoverview.html and www.isee.nc/anglais/teca/ productivesystem/minactivity1.html. SLN’s Doniambo sourced 3.65 million wet tonnes of ore from five SLN mines and from one operated by a subcontractor. Doniambo produced nickel in matte and nickel in ferro-nickel. The matte was sent to France for refining and the ferro-nickel was exported. Modernization of the Doniambo plant continued to increase capacity to 75 000 t/y of contained nickel; two calcination furnaces were renovated in 2007. The Nickel Mining Company (NMC), a joint venture of SMSP (51%) and Posco (49%), obtained titles to various mineral titles previously owned by SMSP. NMC will supply feed to the SNNC smelter in Korea to start up in 2008. Vale Inco planned to start up its Goro project in late 2008. Goro will produce 60 000 t/y of nickel in nickel oxide. Some nickel oxide will go to Vale Inco’s new Dalian facility in China. Other markets include other Asian refineries processing nickel oxide (in Korea and Taiwan) and stainless steel producers. A circuit to produce nickel in mixed hydroxides was being considered. Koniambo, a joint venture of SMSP (51%) and Xstrata (49%), planned to build a mine, ferro-nickel smelter, and associated infrastructure. Xstrata approved the US$3.8 billion project and SMSP will contribute the orebody and US$500 million. Production was expected to start in 2011 with ramp-up to 60 000 t/y of nickel in ferro-nickel in 2013.
Norway Xstrata Nickel’s Nikkelverk refinery took matte from its Sudbury smelter and from BCL in Botswana. Nikkelverk produced nickel, copper, cobalt, and precious metals. The nickel and cobalt were marketed by Glencore.
Papua New Guinea Work began on the US$1.4 billion Ramu project, and US$200 million was spent. When completed in late 2009, Ramu’s capacity will be 31 000 t/y of nickel and 3300 t/y of cobalt in 57 000 t/y of mixed sulphides. The large owners of the Ramu Nickel joint venture included: MCC, 52%; Jinchuan, 11%; Jilin Jien, 11%; and Highlands Pacific, 8.5%.
Philippines Philippine nickel production was 84 700 t of contained nickel. Exports were 74 700 t of nickel in 6.75 Mt of exported ore. Ore was also used at Coral Bay to produce 10 100 t of nickel in 17 900 t of mixed sulphides. Ore exported to China was used to make NPI whereas exports
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CANADIAN MINERALS YEARBOOK, 2007
of higher-grade ore to Japan were used to make ferronickel. An expansion of the Coral Bay HPAL plant from 10 000 t/y to 22 000 t/y was under way and targeted for completion in 2009. Sumitomo finished the feasibility study of a US$1 billion Taganito HPAL project in 2009; it could start production of 17 000 t/y of nickel in mixed sulphides in 2012. Jiangxi Rare Earth signed a Memorandum of Understanding with Atlas to develop a demonstration leach plant in Palawan, Philippines. Philippine priority nickel mineral development projects at the end of 2007 at the operational/expansion (O/E), construction/development (C/D), or feasibility/financing (F/F) stages included: Status O/E O/E O/E C/D C/D F/F F/F F/F
Name
Location
Palawan Nickel Project Berong Nickel Project SIRC Nickel Project Iligan FeNi Smelter Manticao FeNi Smelter Surigao HPAL Project Nonoc Nickel Project Mindoro Nickel Project
Tenement Holder/Permittee/Operator
Palawan Palawan Surigao del Norte Iligan City Misamis Oriental Surigao del Norte Surigao del Norte Mindoro Oriental
Coral Bay TMM Management Surigao Integrated Resources PGMC PGMC Taganito/Sumitomo Philnico Processing Corp. Crew Minerals
project, which is a PGM deposit that also contained nickel. Barrick had the right to earn a 79% interest and expected to complete a feasibility study in 2008.
South Africa ARM and Norilsk, joint owners of the Nkomati Joint Venture, announced approval for the Phase 2 expansion from 5500 t/y of nickel in concentrates to 20 500 t/y, extending the mine life to 2020. Nkomati’s concentrate was smelted at BCL and contained by-product PGM, copper, and cobalt. A feasibility study of building an Activox refinery at the site to produce refined nickel was to be conducted in 2008. The remaining South African nickel production came from the by-product of PGM production. By 2010, Anglo Platinum will expand its base-metal refinery from 21 000 t/y of nickel to 33 000 t/y at a cost of US$280 million. Northam produced about 1100-1300 t of nickel in sulphate as a byproduct of PGM production and refining. Lonmin produced about 4300 t of refined nickel from the Marikana, Limpopo, and Pandora operations.
Spain Russia Norilsk had two centres of operation in Russia: seven mines, two concentrators, three smelters, and two refineries in the Polar Division in the Taimyr Peninsula in Siberia; and three mines, a concentrator, a smelter, and a refinery in the Kola peninsula. Taimyr produced very significant amounts of PGM and copper. A modernization and development plan at both centres continued. Norilsk published tonnage, grade, and recovery details by operation for 2007.
Glencore had an offtake agreement for Aguablanca concentrates until 2010; the concentrates were exported to Jinchuan. Exploration work continued to establish sufficient underground reserves to continue mining after the exhaustion of pit reserves.
Taiwan Vale Inco owned 49.9% of TNRC, which upgraded nickel oxide for feed to the stainless steel industry.
Tanzania Operation
Tonnes Mined
Grade
Nickel in Ore
Mill Recovery
Calculated Contained Nickel
(t)
(%)
(t)
(%)
(t)
Polar Kola Black Swan Cawse Lake Johnston Waterloo Tati Nickel Nkomati (100%)
15 037 000 7 636 000 2 387 000 1 093 000 779 000 185 000 5 986 000 744 000
1.56 0.66 0.83 0.62 1.34 2.76 0.50 1.11
234 577 50 398 19 812 6 777 10 439 5 106 29 930 8 258
84.60 70.70 66.90 88.10 67.30 88.00 84.40 70.00
198 452 35 631 13 254 5 970 7 025 4 493 25 261 5 781
Total
33 847 000
1.08
365 297
295 868
Mechel operated the Sakhara and Buruktal mines and a ferro-nickel smelter at Orsk whose capacity was to be expanded. About 13 000 t of nickel in ferro-nickel were exported to Glencore, Stratton Metals, and Outokumpu. Koks owned the Ufaleynickel and Rezh plants, which are supplied by laterite ore from the Serovskoe and Cheremshanskoe mines. Barrick owned 50% of the Fedorova
Xstrata continued prefeasibility work on Kabanga, a large nickel sulphide deposit (5 Mt @ 2.35% Ni indicated resources) owned jointly by Xstrata Nickel and Barrick.
United Kingdom Vale Inco’s Clydach refinery produced about 34 000 t of nickel from intermediate material sent from Sudbury.
United States After receiving permits, Kennecott Eagle Minerals expected to start up its Eagle mine in 2009, producing 16 000 t/y of nickel in ore over seven years. Reserves at the Michigan deposit were 3.2 Mt @ 3.89% Ni. PolyMet intended to mine the nickel-copper-cobalt-PGM NorthMet deposit in Minnesota to produce about 7000 t/y of byproduct nickel in nickel-cobalt hydroxides, in addition to refined copper and PGM residue. Capital and sustaining costs were estimated at US$450 million. To generate early
NICKEL
cash flow, PolyMet may sell concentrate while building and commissioning the hydrometallurgical plant. PolyMet expected environmental permitting to finish by mid-2008. Franconia will work on a prefeasibility study of its Birch Lake and Maturi properties; a preliminary economic assessment in 2006 looked at production of about 8700 t/y of nickel in nickel-cobalt hydroxides, 33 500 t/y of refined copper, and 3400 kg/y of precious metal precipitates. The only producer of primary nickel from U.S. mines was Stillwater, which recovered by-product nickel in the form of nickel sulphate.
Ukraine Little public data were found for the Pobuzhsky ferronickel smelter; most of the production was thought to be sourced from imported ore. Its estimated capacity was 7000 t/y of nickel in ferro-nickel.
Venezuela Anglo operated the Loma de Níquel mine and ferro-nickel smelter.
Zambia Albidon’s Munali mine and concentrator were expected to be completed in the second quarter of 2008. Munali’s 8500-t/y nickel-in-concentrate production was contracted to Jinchuan. The concentrate was expected to have significant by-product copper, cobalt, and PGM.
Zimbabwe Mwana Africa owned 53% of BNC, which operated two underground mines, a concentrator, smelter, and refinery. Capital expenditures for a new concentrator and an oxygen plant were made in 2007. The smelter/refinery produced about 7800 t of nickel, consisting of about 5000 t from BNC and the rest from toll smelting. BNC’s Hunter Road project was approved, pending financing, as a phased development of a pit and concentrator with an ultimate capacity of 10 000 t/y of contained nickel. No production information was found for the Empress nickel refinery, which refined matte from BCL. Zimplats sent matte containing PGM, gold, and by-product nickel and copper to Impala in South Africa for refining. The US$340 million Phase 1 Ngezi expansion and transition from pit to underground mining was under way for completion in 2009. Mimosa, a 50:50 joint venture between Implats and Aquarius, sent concentrates containing PGM, gold, nickel, copper, and cobalt to Impala for smelting. A US$29 million expansion was nearly complete at year-end.
38.9
PRICES AND INVENTORIES Figure 2 shows prices in 2007 and historical prices since 1986. In 2007, the London Metal Exchange (LME) cash price averaged US$37 320/t, but demonstrated its volatility by varying over a price range of US$29 145/t, or 78% of the average price. The sharp decline in prices followed the revision to the LME’s lending guidance in June. The price decline prompted destocking by the stainless steel industry, which encouraged prices to weaken further. LME inventories, which had averaged just over 4700 t for the JanuaryMay period, increased sharply thereafter to year-end at just below 48 000 t (Figure 2). Nickel represented the largest material cost in making 300 series stainless steels. Stainless steel producers in Europe and North America used an “alloy surcharge” mechanism to pass along changing nickel prices to customers. When nickel prices were rising, the alloy surcharge tended to encourage the maintenance of high stocks, compared to periods of declining nickel prices in which the stainless steel producers destocked. In the fourth quarter, some stainless steel producers shortened the reference period from three months to one month for calculation of the alloy surcharge.
DEMAND Overall, over 80% of primary nickel was used in metallurgical applications. Of the many applications for nickel, the main use was in stainless steels as an alloying element. While chromium is the element that provides a protective oxide layer to resist corrosion, nickel enhances corrosion resistance under severe operating environments. Austenitic stainless steels contain about 8% nickel by weight. Stainless steels accounted for 61% of primary5 nickel used in 2007, or about 890 000 t. The principal uses for primary nickel in 2007 are shown in Figure 3. Information about stainless steel applications and specifications can be found on the Internet at www.euro-inox.org. In addition to the nearly 900 000 t of primary nickel used to make stainless steel in 2007, a further 780 000 t of nickel contained in stainless steel scrap was used by stainless steel makers during that year. Thus, a total of about 1.6 Mt of nickel in all forms went into making stainless steels in 2007. While the typical stainless steel is an austenitic or 300 series stainless steel containing 8% nickel, other grades have become increasingly popular. The 200 series contains between 1% and 4% nickel while the 400 series or ferritic stainless steels do not contain nickel.
38.10
CANADIAN MINERALS YEARBOOK, 2007
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The higher nickel prices changed the distribution of demand and, consequently, the production of the various types of stainless steels. Eramet showed production of various grades of stainless steels over time; austenitic stainless steels lost market share to low-nickel and no-nickel stainless steels. The most dramatic growth was in the 200 series stainless steels (Figure 4).
To illustrate the relationship between nickel prices and stainless steel production, Figure 5 presents quarterly (year-on-year) changes in crude stainless steel production6 and quarterly nickel prices. The world price for 300 series stainless steel peaked in August 2007 at about twice the price of August 2005;
NICKEL
thereafter, both demand and prices for stainless steel remained weak until year-end 2007.
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38.11
Historical data (2000-2006) for world production (mine and refinery), demand for primary nickel, stainless steel production, and the use of primary nickel in stainless steel production can be found in Xinxin’s Initial Public Offering.7
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Long-term under-investment and a focus on cost-cutting since the late 1990s laid the groundwork for the sustained price run-up that started in November 2005 and peaked in mid-2007. The low prices in the late 1990s and early 2000s occurred at a time when China’s stainless steel production capacity increased significantly. The inability of nickel producers to match increased demand translated into rising prices and worries about sufficient supply. Low-value applications for nickel became uneconomic, and stainless steel producers increasingly turned to low-nickel and nonickel stainless steels as alternatives. With continued high prices encouraging development of more supply capacity while stainless steel users continue to examine opportunities to utilize stainless steels containing less nickel, a correction to prices should occur even if economic growth continues. Ultimately, demand for nickel is a function of industrial production, which is driven by world economic growth.
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Bill McCutcheon The author is with the Minerals and Metals Sector, Natural Resources Canada. Telephone: 613-992-5480 E-mail: [email protected]
OVERVIEW
R
ecord high nickel (Ni) prices resulting from years of low prices and delays in new project completion led to increased substitution. The London Metal Exchange (LME) modified its “Lending Guidance” in June and prices dropped sharply thereafter. World stainless steel production decreased by 2% to 27.8 Mt in 2007 from a record high of 28.4 Mt in 2006. World production and use of primary nickel in 2007 were 1.43 Mt and 1.32 Mt, respectively, compared to 1.36 Mt and 1.40 Mt in 2006. Cash settlement nickel prices on the LME were a record average of US$37 320/t and peaked at a record high of US$54 200/t in May. Full corporate names and corporate web sites are found in Table 3. The locations of Canadian nickel facilities (21 mines, 6 concentrators, 3 smelters, and 3 refineries) are shown in Figure 1. Canadian nickel mine production is shown in Table 5. Details about cobalt are limited to tables about Canadian trade, tariffs, and production/use. World cobalt production data can be found at www.thecdi.com/ cobalt-stats.
ing Canadian companies (beginning with CVRD acquiring Canico2 for its Onça-Puma project in 2005) continued in 2007. CVRD completed the US$17.7 billion purchase of Inco Limited in January 2007, creating CVRD Inco Limited, a Toronto-based subsidiary to manage CVRD’s nickel business. In November, CVRD Inco was renamed Vale Inco Limited. Glencore, a major shareholder in Xstrata, began marketing Xstrata’s nickel and cobalt output from the former Falconbridge operations (Falconbridge was purchased by Xstrata in 2006). Sherritt bought Dynatec and its 45% interest in the Ambatovy project in Madagascar. Norilsk Nickel bought LionOre Mining. Lundin Mining bought Rio Narcea Gold and its Aguablanca nickel mine in Spain. Belvedere purchased the Hitura mine in Finland from Outokumpu.
Vale Inco Vale Inco produced a record 247 000 t of finished nickel3 from its worldwide operations and planned to produce 280 000 t in 2008. The 60 000-t/y Goro project was expected to start up before 2009 and the 58 000-t/y Onça-Puma project was expected to start up in early 2009. In Newfoundland and Labrador, Voisey’s Bay (VB) sent high-grade nickel concentrate to smelters at Thompson and in Europe (to Boliden’s smelter in Finland). VB’s bulk nickel-copper concentrate went to Vale Inco’s Sudbury smelter. VB copper concentrate was sold to third parties. The Province requires Vale Inco to build a 50 000-t/y nickel refinery in the province before 2012 to process either matte or concentrate to refined nickel, and Vale Inco submitted the environmental impact statement for such a facility at Long Harbour to start up in 2011.
The value of Canadian nickel production set a record in 2007 at an estimated $9.8 billion (US$9.1 billion1), due to high prices and increased output. Canada has no operating stainless steel mills; the Canadian use of nickel was estimated at about 7000 t. Nickel exports in 2007 totaled $11 billion.
In Sudbury, Vale Inco’s and FNX’s mines sent ore to the Clarabelle mill, which produced a bulk nickel-copper concentrate and a copper concentrate. Vale Inco mines produced 7.9 Mt of ore that contained 98 000 t of nickel. FNX sent about 0.89 Mt of ore to Vale Inco; sales were recorded as about 5500 t after smelter deductions. Clarabelle produced a separate copper concentrate containing perhaps 30% of Vale Inco’s Sudbury copper production, which was smelted elsewhere.
Continued high prices fueled further exploration and development of deposits. Mergers and acquisitions affect-
Vale Inco’s bulk nickel-copper concentrates were smelted in Sudbury and then refined at the Copper Cliff carbonyl
CANADA
CANADIAN MINERALS YEARBOOK, 2007
Figure 1 Nickel in Canada, 2007
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PRODUCERS 1. Xstrata Nickel Limited (Fraser, Thayer-Lindsley, Craig) 1. First Nickel Inc. (Lockerby) 1. Vale Inco Limited (Copper Cliff North, Copper Cliff South, Creighton, Garson, Gertrude, McCreedy East/Coleman, Stobie) 1. FNX Mining Company Inc. (McCreedy West, Levack) 2. Vale Inco Limited (Thompson, Birchtree) 3. Xstrata Nickel Limited (Raglan) 4. North American Palladium Limited (Lac des Iles) 5. Xstrata Nickel Limited (Montcalm) 5. Liberty Mines Inc. (Redstone) 6. Vale Inco Limited (Voisey’s Bay)
SMELTERS 1. Xstrata Nickel Limited (Falconbridge) 2. Vale Inco Limited (Copper Cliff) 3. Vale Inco Limited (Thompson)
REFINERIES 1. Vale Inco Limited (Sudbury) 2. Vale Inco Limited (Thompson) 3. The Cobalt Refining Company Inc. (Fort Saskatchewan)
NICKEL
refinery or at Vale Inco’s Clydach carbonyl refinery in the United Kingdom, or were recovered as nickel oxide (NiO) in Sudbury. Production from the Sudbury mines was supplemented by large amounts of third-party feeds and the bulk nickel-copper concentrate produced at VB. Vale Inco reported that Sudbury and Clydach recovered 70 700 t of nickel from ore produced in its Sudbury mines. Vale Inco’s SO2 emissions were 150 000 t. NiO was marketed to stainless steel producers or was sent to Asian refineries for upgrading. As its Sudbury nickel production was limited by difficulties with matte processing, production problems at Clydach, and ground control issues at the Sudbury mines, Vale Inco committed US$250 million to resolve those problems in 2008. The US$362 million Totten mine was to start up in the first half of 2011 with production of 8200 t/y of recoverable nickel, plus copper and platinum group metals (PGM). Kelly Lake, identified in 1997, was in the prefeasibility stage with proven plus probable reserves in 2006 of 9.6 Mt @ 1.49% Ni and 1.18% Cu; PGM contents were said to be 1.8 g/t in 2000. At Thompson, Vale Inco mined about 2.5 Mt/y containing about 43 000 t of nickel that was processed at the Thompson concentrator. The Vale Inco smelter and refinery produced metal from the Manitoba ores and from high-grade concentrate from Voisey’s Bay. The smelter emitted 192 000 t of SO2.
38.3
7500 t/y of nickel (eight-year life). Both were scheduled to start up in 2009 and to operate at capacity in 2010. NRS will produce development ore in 2008. In mid-2007, NRS’s inferred resources were 14.5 Mt @ 1.6% Ni, 3.1% Cu, 0.03% Co, 1.7 g/t Pt, and 1.9 g/t Pd; grades of 0.8 g/t Au and 15 g/t Ag were reported for NRS in 2005. Xstrata committed US$8.7 million to extend Thayer-Lindsley’s life to late 2012. Xstrata planned to reactivate 1 Mt/y of idled capacity at Strathcona to accommodate Nickel Rim South and Fraser Morgan output. Start-up of the Onaping Depth operation (10 000 t/y of nickel in ore) to replace output from the Craig, Fraser, and Thayer Lindsley mines could increase Xstrata’s Sudbury mine production to 40 000 t/y of nickel. Xstrata planned to increase smelter throughput in Sudbury to a minimum of 80 000 t/y of nickel in matte. The smelter processed all material from Xstrata Nickel’s operations plus third-party feed and recyclable feeds, and sent all the matte to Xstrata’s refinery in Norway. Xstrata did not release precious metals production data. Prior to being purchased, Falconbridge had reported PGM and nickel production at Nikkelverk of:
Year
PGM
Nickel
(tonnes) 2001 2002 2003 2004 2005
Vale Inco produced 1304 t of refined cobalt (99.8% purity) at its Port Colborne refinery and 728 t of cobalt hydrate (containing about 180 t of cobalt) at Thompson, and shipped 495 t of cobalt in intermediate products to other companies for recovery.
7.49 10.72 12.67 14.02 12.96
68 200 68 500 77 200 71 400 84 900
Xstrata Nickel Sudbury Synergies At the 1.1-Mt/y Raglan operation in northern Quebec, expansion to 1.3 Mt/y was under way. Xstrata expected to increase throughput to 1.5 Mt/y by 2011 and possibly to 2 Mt/y by 2013. All concentrate was sent to the company’s Sudbury smelter. Production at the Montcalm mine near Timmins declined because of the lower grade despite an increase in tonnage mined. The Strathcona concentrator treated 1.866 Mt of ore @ 1.04% Ni and 1.10% Cu from Xstrata’s Sudbury mines to yield concentrates containing 19 575 t of nickel, 21 853 t of copper, and 620 t of cobalt plus unstated amounts of precious metals. Strathcona treated 0.31 Mt of custom ore in 2007 (including feed from First Nickel, URSA Major, and Vale Inco), down 15% from 2006. Xstrata’s Sudbury smelter produced 67 576 t of nickel, 21 978 t of copper, and 2498 t of cobalt in matte, and emitted 40 250 t of SO2. Xstrata forecast 2010 nickel production from its Sudbury mines at 34 000 t/y, compared to 19 800 t in 2007. Two important new operations for Xstrata will be Nickel Rim South (NRS) with a production rate of 16 000 t/y of nickel (16-year life) and Fraser Morgan with a production rate of
Xstrata and Vale Inco examined possible joint synergy projects at the Thayer-Lindsley, Blezard, and North Range deposits; mini-pit processing; and smelting of intermediate feeds. Xstrata processed a record amount of intermediate feed from Vale Inco in 2007.
Sherritt Sherritt and the Cuban government each owned half of the Moa Joint Venture whose assets included the CRC nickelcobalt refinery in Alberta and a mine/leach plant in Cuba. The Phase 1 expansion at CRC will increase refined nickel plus cobalt output by 4000 t/y by mid-2008; Phase 2 will add another 9000 t/y of nickel plus cobalt before mid-2009. A Phase 3 expansion to 3000-6000 t/y of nickel and cobalt was also being considered. CRC sourced 83% of its nickel and 87% of its cobalt inputs from the Moa Bay operation. Sherritt purchased Dynatec in mid-2007 for $1.6 billion and thereby acquired a 40% share in the Ambatovy nickel project in Madagascar.
38.4
CANADIAN MINERALS YEARBOOK, 2007
Lac des Iles NAP operated an underground mine and an open pit that produced palladium and by-product nickel, platinum, gold, and copper, and was assessing a project to extend the pit life beyond two years. The company sent concentrate to Xstrata’s Sudbury smelter. NAP expects to decide in the first half of 2008 whether to proceed with the Shebandowan West project where ramp access could allow mining of 500-1000 t/d starting in 2009.
(about 30 000 t/y in total, or about 5000 t/y of nickel). After delays in obtaining federal permits for tailings storage, Crowflight applied for an interim land-based storage facility in December. A brief summary of some of the other potential nickel projects in Canada not noted in the text above is shown below. Space does not permit discussion, but detailed information is available on the company web sites (see Table 3) or from www.sedar.com.
First Nickel
Company
Project
First Nickel delivered 0.124 Mt of ore grading 1.57% Ni to the Strathcona mill; payable nickel was estimated to be about 75% of contained nickel, or 1478 t of nickel. First Nickel delivered a feasibility study of the Premiere Ridge project to Xstrata Nickel in July.
Canadian Royalties Crowflight Hard Creek Independent4 Kenbridge Mustang Starfield Resources Victory Nickel
Nunavik Manibridge Turnagain Lynn Lake Canadian Arrow Maskwa Fergusen Lake Lac Rocher, Mel, Minago
FNX FNX’s Levack and McCreedy West mines sold ore to Vale Inco containing 5535 t of nickel plus copper, cobalt, and precious metals. FNX’s Podolsky project produced 16 400 t of pre-production ore and should start commercial production in 2008.
Further details about mineral exploration and development activities in Canada can be found in the Canadian Minerals Yearbook chapter entitled “Mineral Exploration, Deposit Appraisal, and Mine Complex Development Activity in Canada.”
Liberty Mines The Redstone mine started commercial production and commissioned its 1500-t/d mill in July. In November, Liberty began shipping its concentrate to Xstrata’s Sudbury smelter, which offered payment for by-product copper, cobalt, and precious metals. Liberty signed a new agreement with Jilin Jien to export up to 20 t/d of concentrate. Liberty planned to start pre-production at the nearby McWatters project in May 2009, ramping it up to 12001300 t/d by November. Liberty also planned to start preproduction at its Hart project in late 2009.
URSA Major URSA obtained permits to proceed with the 4500-t/d Shakespeare project, which had probable reserves of 11.8 Mt @ 0.33% Ni with by-product copper, cobalt, platinum, palladium, and gold. URSA sent a 50 000-t bulk sample to Xstrata’s Strathcona mill, and then negotiated an agreement with Xstrata to ship 500 t/d of ore to Strathcona for one year starting in June 2008. Ore production in 2008 was forecast at 185 000 t; no average grade was stated.
OTHER PROJECTS In addition to the projects noted above, Crowflight’s Bucko Lake project in Manitoba was expected to start production in late 2008. Crowflight’s life-of-mine offtake contract with Xstrata Nickel covered all concentrate produced at Bucko
WORLD PRODUCTION OVERVIEW Table 9 presents data about the production of finished nickel from 2004 to 2007, and Table 8 presents data about sulphide mining and some laterite mining operations in 2004-07; data are generally not repeated in the discussion below. Data were not found for all operations, and some data are estimated. Many laterite mining operations do not report mining tonnages and grade either used in an on-site smelter or hydrometallurgical plant, or exported for recovery at another plant and, for these instances, the facility is shown without data. Production from such operations is generally captured at the finished nickel stage in Table 9. Nickel came from three principal sources: nickel sulphide deposits, nickel laterite deposits, and scrap. All Canadian nickel was sourced from sulphide deposits. Laterite deposits, such as those in Indonesia and the Philippines, result from the weathering and enrichment of ultramafic rocks producing limonites (nickel oxides) overlying saprolites (nickel silicates). Most nickel sulphides were processed by concentration, smelting, and refining, although hydrometallurgical processing of sulphide ores began in Canada 50 years ago at Fort Saskatchewan. The limonitic portion of laterites was mainly processed by acid or ammonia leaching followed by solvent extraction and reduction. Saprolite ore was mainly converted to ferronickel in smelters.
NICKEL
Nickel that is never used in semi-fabrication is termed “primary” nickel. Scrap stainless steel was the source of most recycled nickel. More details about nickel recycling can be found (in English only) at http://pubs.usgs.gov/circ/ circ1196-Z/pdf/circ1196-Z.pdf.
Australia BHPB’s US$2.2 billion Ravensthorpe mine and leach plant in Western Australia shipped mixed nickel-cobalt hydroxides to Yabulu in December. The design capacity of Ravensthorpe was 50 000 t/y of nickel in mixed nickelcobalt hydroxides. BHPB spent US$580 million to expand Yabulu to refine Ravensthorpe output, in addition to Yabulu’s capacity to produce 32 000 t/y of nickel from imported laterite ores.
38.5
Compass expected its A$100 million Browns Oxide Project to complete commissioning in the second quarter of 2008 (700 t/y of nickel and 1000 t/y of cobalt in mixed nickelcobalt carbonate as a by-product of copper). Hunan Nonferrous Metals agreed to become a partner in the project and will take half of the output. Gladstone Pacific released a feasibility study for a US$3.7 billion nickel refinery in Queensland. The 63 000-t/y refinery would take laterite ore from Marlborough and imports from New Caledonia. Heron was advised by Vale Inco that it would proceed with a study of the Kalgoorlie nickel project; a prefeasibility study was to be completed by early 2009.
Botswana BHPB’s NiWest operation in Western Australia consisted of sulphide mines, three concentrators, a smelter, and a refinery. Kalgoorlie smelter matte went to the 65 000-t/y Kwinana refinery; in 2007, Kalgoorlie also exported matte to Jinchuan, Harjavalta, and Sumitomo. BHPB approved the US$139 million Cliffs mine that will produce 8500 t/y of recoverable nickel starting in the fourth quarter of 2008. BHPB did not release annual or quarterly sulphide mine or concentrator production for individual operations in Western Australia. Third-party mines supplied the Kambalda concentrator with an estimated 42 500 t of nickel in ore. Minara forecast production of 32 000-36 000 t in 2008, plus 2000 t from its heap-leach demonstration plant. A fullscale A$300 million heap-leach operation to produce 800010 000 t/y of nickel from low-grade ore was approved in principle. Glencore owned 53% of Minara and 40% of the Murrin Murrin joint venture. Jubilee’s contract for the delivery of concentrates to Vale Inco ended and Jubilee began delivering concentrate to BHPB in September. In October, Xstrata announced its takeover bid for Jubilee. Jubilee started mobilizing for development of the Sinclear project in December. In Tasmania, the new Avebury mine had 45 000 t of ore in stockpiles awaiting completion of its concentrator (expected in the fourth quarter of 2008); the concentrate will be sent to Jinchuan. At year-end, Zinifex was bidding for Allegiance Mining, owner of Avebury. Space does not permit discussion of all nickel operations in Australia. Notable changes in 2007 included Norilsk’s purchase of Lake Johnston, Black Swan, the Cawse mine/leach plant, and the Waterloo mine, which were obtained by buying LionOre and the nickel assets of OMG. Palmary Enterprises stated its intention to acquire the remaining 26% of Consolidated Minerals, which owned the Beta Hunt and Widgiemooltha mines (both delivered ore to the Kambalda mill). Mincor purchased the Otter Juan mine and the McMahon and Durkin projects from GMM Pty Ltd. in mid-year for A$68 million.
BCL operated mines, a concentrator, and a smelter. BCL sent matte to Nikkelverk in Norway and to the Empress refinery in Zimbabwe. When Norilsk bought LionOre in March, it also acquired Tati Nickel. Tati produced 25 300 t of nickel in concentrate that was smelted at BCL. Norilsk indefinitely postponed the Activox project, which was piloted at Tati and had produced refined nickel and copper.
Brazil Work continued at the 36 000-t/y US$1.5 billion Barro Alto mine and ferro-nickel smelter for start-up in 2010. Votorantim Metais operated a laterite mine and Caron process plant that was supplying its refinery in Sao Paulo. Votorantim’s Forteleza smelter sent matte to Harjavalta; the operation took feed from the Fortaleza mine and from Pro Metalica’s Americano do Brazil operation. Votorantim was also building a 10 600-t/y ferro-nickel smelter to start up in 2009. Vale Inco had two laterite projects in Brazil: the US$1.9 billion, 46 000-t/y Vermelho mine-leach plant/ refinery to start in 2012, and the US$2.3 billion OnçaPuma mine/ferro-nickel smelter project to start in 2009. A feasibility study of a hydrometallurgical plant at OnçaPuma was to be completed in 2008.
China Jinchuan was the country’s largest nickel refiner with finished nickel output of about 110 000 t. It produced about half of its production from its own mines and purchased concentrates and matte from other Chinese producers and overseas sources, including concentrate from Australia (Sally Malay and Radio Hill) and Spain (Aguablanca), and matte from Russia and Australia. Nickel pig iron (NPI) production was the most novel nickel production development since the Australian foray into pressure leaching in the late 1990s. Production estimates differ, but Eramet put its contained nickel production at 85 000 t in 2007, up from 26 000 t in 2006. While NPI had
38.6
CANADIAN MINERALS YEARBOOK, 2007
high production costs, lower nickel prices will force NPI producers to either reduce costs or close. NPI represents new “swing production” capacity, albeit at a high cost. Jilin had a capacity of 25 000 t/y of nickel sulphate containing about 8000 t of nickel. Jilin imported concentrate from Liberty’s Redstone mine, but Liberty later sent its concentrate to Xstrata’s Sudbury smelter in late 2007. Jilin planned to build a new Ausmelt smelter (capacity of 200 000 t/y of concentrates to produce 15 000 t/y of nickel in nickel-copper matte) and reportedly completed a 2000-t/y nickel carbonyl facility using CVMR technology. Xinxin was the third largest producer of nickel cathode in China with mining, concentration, and smelting facilities at Kalatongke and a refinery at Fukang. Xinxin planned to produce 7000 t of nickel, 4200 t of copper, and 50 t of cobalt in 2008, and to finish an expansion to 13 000 t/y of refined nickel. Jiangxi Jiangli started up a hydrometallurgical plant (capacity of 2000 t/y of nickel) to process imported laterite ores; the plant capacity was to increase to 5000 t/y in 2008. Vale Inco’s US$65 million, 32 000-t/y refinery at Dalian was to start up in 2008 and will process nickel oxide from Goro into Utility nickel for Chinese stainless steel producers. The Chinese government provided support to importers of nickel ore through its “Interim Measures for the Administration of Import Discount Interest Funds.”
Colombia Cerro Matoso produced low-carbon ferro-nickel from its laterite mine. The 50 000-t/y nickel in ferro-nickel operation could be expanded by between 50% and 100% within 10 years, assuming future feasibility studies were positive.
Cuba The Moa Joint Venture’s laterite mine and leach plant in Cuba produced nickel-cobalt mixed sulphide precipitates for export to CRC’s refinery in Canada. An expansion, funded equally by Cuba and Sherritt, was under way to increase capacity from 33 000 t/y of nickel plus cobalt in sulphides to 37 000 t/y in 2008 and 46 000 t/y in 2009. A 2000-t/d acid plant was scheduled to start up in 2009. A third-phase expansion to 49 000-52 000 t/y was in the conceptual stage. Union del Niquel, the state producer, operated two plants (Rene Ramos Latour at Nicaro and Che Guevera at Moa) that together produced an estimated 39 000 t of nickel plus cobalt.
Dominican Republic Falcondo’s laterite mine and ferro-nickel smelter used power from its oil-fired power plant and therefore had high operating costs. A study to convert from oil to coal was initiated with targetted savings of US$3300/t of nickel in operating costs, or US$96 million per year.
Finland Norilsk Nickel purchased OMG’s nickel assets in March, including the 60 000-t/y Harjavalta refinery, which took matte from Boliden’s on-site smelter, Votorantim’s Fortaleza smelter, and BHPB’s Kalgoorlie smelter. As well, Harjavalta took nickel carbonate intermediates from Cawse in Australia. Boliden’s concentrate feed sources included Silver Swan in Australia, Titania in Norway, and Voisey’s Bay in Canada. Belvedere bought the Hitura and Särkiniemi mines from Outokumpu, delivering nickel concentrate to the Boliden smelter for processing to matte to supply Harjavalta. Talvarivaara started construction of a mine and bioheapleaching project to produce 33 000 t of nickel and 1200 t of cobalt in sulphide precipitates, as well as zinc and copper.
France Eramet’s Sandouville refinery took matte grading 75% Ni from Doniambo to produce high-purity cathodes and chemicals.
Greece Larco targeted production of 20 000 t of nickel aided by imported ore from Turkey and Indonesia, and by a new convertor that was to increase capacity to 21 500 t/y.
Indonesia PT Antam’s new FeNi III smelter closed for three months due to a leak. Antam’s feed came principally from PT Inco’s Pomalaa East mine (about 650 000 dry tonnes grading 2.3% Ni). Antam exported 6.9 million wet tonnes of ore, a record high. Higher-grade ore went to ferro-nickel smelters in Japan and Eastern Europe while lower-grade ore went to NPI plants in China. Antam signed two agreements to investigate potential projects. The first agreement with BHPB for the Pearl project will look at a US$1 billion ferro-nickel operation producing 30 000-50 000 t/y of nickel in ferro-nickel and a US$3 billion hydrometallurgical plant producing 60 000 t/y of nickel plus cobalt. The second agreement with Tsingshan Holding Group for the Obi project will examine a US$150-$230 million project that will include a mine, a 75 000-t/y nickel in nickel pig iron facility, and a stainless steel plant. Eramet expected to decide in 2009 whether to develop a 60 000-t/y nickel hydrometallurgical operation at Weda Bay by 2013. PT Inco received a forestry permit that will allow construction of a 90-MW dam and power plant to permit smelter expansion to 90 700 t/y of nickel in matte by 2011. PT Inco shipped matte grading 78% Ni to TNC and Sumitomo in Japan. Cobalt in matte totaled 1200 t in 2007.
NICKEL
Japan Sumitomo planned to expand its production capacity (for nickel in metal and nickel in ferro-nickel) from 57 000 t/y to 100 000 t/y by 2013; plans were to spend ¥5 billion in 2008. Increased feed was to come from Goro (late 2008), the Coral Bay expansion (2009), and Taganito HPAL (2012). If approved, these projects would allow the refinery to expand to 41 000 t/y in 2009 and to 65 000 t/y by 2013. Pamco, Nippon Yakin, and Hyuga had combined production of 68 300 t of nickel in ferro-nickel. Vale’s TNC plant produced nickel oxide from PT Inco.
Korea Posco and SMSP established the SNCC Joint Venture, owned 51% by SMSP and 49% by Posco. SNNC began construction of a 30 000-t/y nickel in ferro-nickel smelter at Gwanguang to process ore from NMC in New Caledonia. Vale Inco owned 25% of the KNC facility at Onsan, which upgraded nickel oxide from Canada, Japan, and Australia for the stainless steel industry.
Kosovo Cunico purchased the Ferronikeli plant at Glogovac in 2006 and restarted it in 2007. Planned output was 1450 t of nickel in ferro-nickel in 2007, increasing to 7000 t in 2008. Feronikeli’s output from the Chikatovo and Glavitca mines, supplemented by third-party material (including imports from Indonesia, Albania, New Caledonia, and Turkey), was smelted to produce ferro-nickel grading 23% Ni.
Macedonia Cuninco’s Feni operation took ore from its Rzanovo mine plus imports from Turkey, Albania, and New Caledonia. The ferro-nickel smelter increased output from 5000 t/y in 2005 to about 16 000 t/y of nickel in ferro-nickel grading about 22% Ni. Feni was to complete a third line before 2010.
Madagascar Sherritt owned 40% of the Ambatovy joint venture after purchasing Dynatec in June. Other owners were Sumitomo Corporation and Korea Resources Corporation, each with 27.5%, and SNC-Lavalin with 5%. Construction of the US$2.1 billion laterite mine, leach plant, and 60 000-t/y nickel refinery (plus 5600 t/y of cobalt) began in November. The start-up target date was 2010 with full capacity to be achieved in 2012/13.
New Caledonia New Caledonia produced 7.6 million wet tonnes of laterite ore containing 125 400 t of nickel. A map showing the producing mines and companies in New Caledonia was avail-
38.7
able at www.isee.nc/anglais/teca/productivesystem/ minoverview.html and www.isee.nc/anglais/teca/ productivesystem/minactivity1.html. SLN’s Doniambo sourced 3.65 million wet tonnes of ore from five SLN mines and from one operated by a subcontractor. Doniambo produced nickel in matte and nickel in ferro-nickel. The matte was sent to France for refining and the ferro-nickel was exported. Modernization of the Doniambo plant continued to increase capacity to 75 000 t/y of contained nickel; two calcination furnaces were renovated in 2007. The Nickel Mining Company (NMC), a joint venture of SMSP (51%) and Posco (49%), obtained titles to various mineral titles previously owned by SMSP. NMC will supply feed to the SNNC smelter in Korea to start up in 2008. Vale Inco planned to start up its Goro project in late 2008. Goro will produce 60 000 t/y of nickel in nickel oxide. Some nickel oxide will go to Vale Inco’s new Dalian facility in China. Other markets include other Asian refineries processing nickel oxide (in Korea and Taiwan) and stainless steel producers. A circuit to produce nickel in mixed hydroxides was being considered. Koniambo, a joint venture of SMSP (51%) and Xstrata (49%), planned to build a mine, ferro-nickel smelter, and associated infrastructure. Xstrata approved the US$3.8 billion project and SMSP will contribute the orebody and US$500 million. Production was expected to start in 2011 with ramp-up to 60 000 t/y of nickel in ferro-nickel in 2013.
Norway Xstrata Nickel’s Nikkelverk refinery took matte from its Sudbury smelter and from BCL in Botswana. Nikkelverk produced nickel, copper, cobalt, and precious metals. The nickel and cobalt were marketed by Glencore.
Papua New Guinea Work began on the US$1.4 billion Ramu project, and US$200 million was spent. When completed in late 2009, Ramu’s capacity will be 31 000 t/y of nickel and 3300 t/y of cobalt in 57 000 t/y of mixed sulphides. The large owners of the Ramu Nickel joint venture included: MCC, 52%; Jinchuan, 11%; Jilin Jien, 11%; and Highlands Pacific, 8.5%.
Philippines Philippine nickel production was 84 700 t of contained nickel. Exports were 74 700 t of nickel in 6.75 Mt of exported ore. Ore was also used at Coral Bay to produce 10 100 t of nickel in 17 900 t of mixed sulphides. Ore exported to China was used to make NPI whereas exports
38.8
CANADIAN MINERALS YEARBOOK, 2007
of higher-grade ore to Japan were used to make ferronickel. An expansion of the Coral Bay HPAL plant from 10 000 t/y to 22 000 t/y was under way and targeted for completion in 2009. Sumitomo finished the feasibility study of a US$1 billion Taganito HPAL project in 2009; it could start production of 17 000 t/y of nickel in mixed sulphides in 2012. Jiangxi Rare Earth signed a Memorandum of Understanding with Atlas to develop a demonstration leach plant in Palawan, Philippines. Philippine priority nickel mineral development projects at the end of 2007 at the operational/expansion (O/E), construction/development (C/D), or feasibility/financing (F/F) stages included: Status O/E O/E O/E C/D C/D F/F F/F F/F
Name
Location
Palawan Nickel Project Berong Nickel Project SIRC Nickel Project Iligan FeNi Smelter Manticao FeNi Smelter Surigao HPAL Project Nonoc Nickel Project Mindoro Nickel Project
Tenement Holder/Permittee/Operator
Palawan Palawan Surigao del Norte Iligan City Misamis Oriental Surigao del Norte Surigao del Norte Mindoro Oriental
Coral Bay TMM Management Surigao Integrated Resources PGMC PGMC Taganito/Sumitomo Philnico Processing Corp. Crew Minerals
project, which is a PGM deposit that also contained nickel. Barrick had the right to earn a 79% interest and expected to complete a feasibility study in 2008.
South Africa ARM and Norilsk, joint owners of the Nkomati Joint Venture, announced approval for the Phase 2 expansion from 5500 t/y of nickel in concentrates to 20 500 t/y, extending the mine life to 2020. Nkomati’s concentrate was smelted at BCL and contained by-product PGM, copper, and cobalt. A feasibility study of building an Activox refinery at the site to produce refined nickel was to be conducted in 2008. The remaining South African nickel production came from the by-product of PGM production. By 2010, Anglo Platinum will expand its base-metal refinery from 21 000 t/y of nickel to 33 000 t/y at a cost of US$280 million. Northam produced about 1100-1300 t of nickel in sulphate as a byproduct of PGM production and refining. Lonmin produced about 4300 t of refined nickel from the Marikana, Limpopo, and Pandora operations.
Spain Russia Norilsk had two centres of operation in Russia: seven mines, two concentrators, three smelters, and two refineries in the Polar Division in the Taimyr Peninsula in Siberia; and three mines, a concentrator, a smelter, and a refinery in the Kola peninsula. Taimyr produced very significant amounts of PGM and copper. A modernization and development plan at both centres continued. Norilsk published tonnage, grade, and recovery details by operation for 2007.
Glencore had an offtake agreement for Aguablanca concentrates until 2010; the concentrates were exported to Jinchuan. Exploration work continued to establish sufficient underground reserves to continue mining after the exhaustion of pit reserves.
Taiwan Vale Inco owned 49.9% of TNRC, which upgraded nickel oxide for feed to the stainless steel industry.
Tanzania Operation
Tonnes Mined
Grade
Nickel in Ore
Mill Recovery
Calculated Contained Nickel
(t)
(%)
(t)
(%)
(t)
Polar Kola Black Swan Cawse Lake Johnston Waterloo Tati Nickel Nkomati (100%)
15 037 000 7 636 000 2 387 000 1 093 000 779 000 185 000 5 986 000 744 000
1.56 0.66 0.83 0.62 1.34 2.76 0.50 1.11
234 577 50 398 19 812 6 777 10 439 5 106 29 930 8 258
84.60 70.70 66.90 88.10 67.30 88.00 84.40 70.00
198 452 35 631 13 254 5 970 7 025 4 493 25 261 5 781
Total
33 847 000
1.08
365 297
295 868
Mechel operated the Sakhara and Buruktal mines and a ferro-nickel smelter at Orsk whose capacity was to be expanded. About 13 000 t of nickel in ferro-nickel were exported to Glencore, Stratton Metals, and Outokumpu. Koks owned the Ufaleynickel and Rezh plants, which are supplied by laterite ore from the Serovskoe and Cheremshanskoe mines. Barrick owned 50% of the Fedorova
Xstrata continued prefeasibility work on Kabanga, a large nickel sulphide deposit (5 Mt @ 2.35% Ni indicated resources) owned jointly by Xstrata Nickel and Barrick.
United Kingdom Vale Inco’s Clydach refinery produced about 34 000 t of nickel from intermediate material sent from Sudbury.
United States After receiving permits, Kennecott Eagle Minerals expected to start up its Eagle mine in 2009, producing 16 000 t/y of nickel in ore over seven years. Reserves at the Michigan deposit were 3.2 Mt @ 3.89% Ni. PolyMet intended to mine the nickel-copper-cobalt-PGM NorthMet deposit in Minnesota to produce about 7000 t/y of byproduct nickel in nickel-cobalt hydroxides, in addition to refined copper and PGM residue. Capital and sustaining costs were estimated at US$450 million. To generate early
NICKEL
cash flow, PolyMet may sell concentrate while building and commissioning the hydrometallurgical plant. PolyMet expected environmental permitting to finish by mid-2008. Franconia will work on a prefeasibility study of its Birch Lake and Maturi properties; a preliminary economic assessment in 2006 looked at production of about 8700 t/y of nickel in nickel-cobalt hydroxides, 33 500 t/y of refined copper, and 3400 kg/y of precious metal precipitates. The only producer of primary nickel from U.S. mines was Stillwater, which recovered by-product nickel in the form of nickel sulphate.
Ukraine Little public data were found for the Pobuzhsky ferronickel smelter; most of the production was thought to be sourced from imported ore. Its estimated capacity was 7000 t/y of nickel in ferro-nickel.
Venezuela Anglo operated the Loma de Níquel mine and ferro-nickel smelter.
Zambia Albidon’s Munali mine and concentrator were expected to be completed in the second quarter of 2008. Munali’s 8500-t/y nickel-in-concentrate production was contracted to Jinchuan. The concentrate was expected to have significant by-product copper, cobalt, and PGM.
Zimbabwe Mwana Africa owned 53% of BNC, which operated two underground mines, a concentrator, smelter, and refinery. Capital expenditures for a new concentrator and an oxygen plant were made in 2007. The smelter/refinery produced about 7800 t of nickel, consisting of about 5000 t from BNC and the rest from toll smelting. BNC’s Hunter Road project was approved, pending financing, as a phased development of a pit and concentrator with an ultimate capacity of 10 000 t/y of contained nickel. No production information was found for the Empress nickel refinery, which refined matte from BCL. Zimplats sent matte containing PGM, gold, and by-product nickel and copper to Impala in South Africa for refining. The US$340 million Phase 1 Ngezi expansion and transition from pit to underground mining was under way for completion in 2009. Mimosa, a 50:50 joint venture between Implats and Aquarius, sent concentrates containing PGM, gold, nickel, copper, and cobalt to Impala for smelting. A US$29 million expansion was nearly complete at year-end.
38.9
PRICES AND INVENTORIES Figure 2 shows prices in 2007 and historical prices since 1986. In 2007, the London Metal Exchange (LME) cash price averaged US$37 320/t, but demonstrated its volatility by varying over a price range of US$29 145/t, or 78% of the average price. The sharp decline in prices followed the revision to the LME’s lending guidance in June. The price decline prompted destocking by the stainless steel industry, which encouraged prices to weaken further. LME inventories, which had averaged just over 4700 t for the JanuaryMay period, increased sharply thereafter to year-end at just below 48 000 t (Figure 2). Nickel represented the largest material cost in making 300 series stainless steels. Stainless steel producers in Europe and North America used an “alloy surcharge” mechanism to pass along changing nickel prices to customers. When nickel prices were rising, the alloy surcharge tended to encourage the maintenance of high stocks, compared to periods of declining nickel prices in which the stainless steel producers destocked. In the fourth quarter, some stainless steel producers shortened the reference period from three months to one month for calculation of the alloy surcharge.
DEMAND Overall, over 80% of primary nickel was used in metallurgical applications. Of the many applications for nickel, the main use was in stainless steels as an alloying element. While chromium is the element that provides a protective oxide layer to resist corrosion, nickel enhances corrosion resistance under severe operating environments. Austenitic stainless steels contain about 8% nickel by weight. Stainless steels accounted for 61% of primary5 nickel used in 2007, or about 890 000 t. The principal uses for primary nickel in 2007 are shown in Figure 3. Information about stainless steel applications and specifications can be found on the Internet at www.euro-inox.org. In addition to the nearly 900 000 t of primary nickel used to make stainless steel in 2007, a further 780 000 t of nickel contained in stainless steel scrap was used by stainless steel makers during that year. Thus, a total of about 1.6 Mt of nickel in all forms went into making stainless steels in 2007. While the typical stainless steel is an austenitic or 300 series stainless steel containing 8% nickel, other grades have become increasingly popular. The 200 series contains between 1% and 4% nickel while the 400 series or ferritic stainless steels do not contain nickel.
38.10
CANADIAN MINERALS YEARBOOK, 2007
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The higher nickel prices changed the distribution of demand and, consequently, the production of the various types of stainless steels. Eramet showed production of various grades of stainless steels over time; austenitic stainless steels lost market share to low-nickel and no-nickel stainless steels. The most dramatic growth was in the 200 series stainless steels (Figure 4).
To illustrate the relationship between nickel prices and stainless steel production, Figure 5 presents quarterly (year-on-year) changes in crude stainless steel production6 and quarterly nickel prices. The world price for 300 series stainless steel peaked in August 2007 at about twice the price of August 2005;
NICKEL
thereafter, both demand and prices for stainless steel remained weak until year-end 2007.
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38.11
Historical data (2000-2006) for world production (mine and refinery), demand for primary nickel, stainless steel production, and the use of primary nickel in stainless steel production can be found in Xinxin’s Initial Public Offering.7
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Long-term under-investment and a focus on cost-cutting since the late 1990s laid the groundwork for the sustained price run-up that started in November 2005 and peaked in mid-2007. The low prices in the late 1990s and early 2000s occurred at a time when China’s stainless steel production capacity increased significantly. The inability of nickel producers to match increased demand translated into rising prices and worries about sufficient supply. Low-value applications for nickel became uneconomic, and stainless steel producers increasingly turned to low-nickel and nonickel stainless steels as alternatives. With continued high prices encouraging development of more supply capacity while stainless steel users continue to examine opportunities to utilize stainless steels containing less nickel, a correction to prices should occur even if economic growth continues. Ultimately, demand for nickel is a function of industrial production, which is driven by world economic growth.
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