The company said BCL, Botswana's largest private employer, had advised it will not accept nickel concentrate from Tati for that period while it repairs a leak in a waste heat boiler tube and structural problems in the furnace.
LionOre has an 85% interest in Tati, which was formed in 1988 to develop the Selkirk and Phoenix nickel-copper mines, and also has an equity stake in BCL.
"The board and management team of Tati are currently pursuing a number of options to mitigate some of the production shortfall," LionOre said in a statement.
LionOre said it would allow Tati to produce concentrate until February 11 so it can complete concentrate testing, and then plans to halt production for two weeks for engineering work.
The work is aimed at improving the Tati concentrator plant to increase the smelter's production rate by up to 10% during the second half of the year.
"Production will be suspended to allow a number of engineering projects to be undertaken, which can only be effected while the plant is off-line," LionOre said in a statement.
It added: "The objective is to optimize production on start-up in two weeks time and save down time later in the year".
Matte from BCL's smelter is converted into refined nickel and copper at Rio Tinto's Zimbabwe Empress refinery and at Falconbridge's Nikkelverk refinery in Norway.
The bulk of BCL's matte is refined by Falconbridge, the world's third-largest nickel producer, and is the mainstay of its custom feed business.
Falconbridge spokeswoman, Caroline Casselman, said the BCL shutdown would not immediately affect Nikkelverk's output of refined nickel.
She said it will also not have a significant impact on first-quarter production and that the company will evaluate options to make up for the shortfall.
"We have some flexibility in our system and we can hopefully work around the situation," she said.
The Nikkelverk refinery produced 68 530 t of nickel in 2002, and 30 632 t of copper.
LionOre said it might try to locate a temporary third party toll treatment facility for Tati's material.
"If concentrate is not sent to a third party, it will be stockpiled at the Phoenix site and delivery will resume upon startup of the BCL smelter," it said.
"The current agreement with BCL allows for the treatment of up to 350 000 t of concentrate a year compared to Tati's current budget of 304 000 t for 2003, potentially allowing Tati to recover most, if not all, of the production shortfall," LionOre added.
It said it planned to make a claim under its business interruption insurance to cover any incremental costs or losses as a result of the BCL outage.
Shares in LionOre, which also has nickel projects in Australia, closed unchanged at C$5,35 on the Toronto Stock Exchange last Friday. – Reuters.