TORONTO (miningweekly.com) – Vancouver-based First Quantum Minerals has approved the development of its Kevitsa nickel/copper/platinum-group-element (PGE) project in northern Finland, the company announced on Monday.

The project is expected to cost around $400-million, and First Quantum is confident it can finance the development through a combination of debt and equity and is targeting commercial production from the new mine in mid-2012.

“We believe that Kevitsa is going to be a long-life operation that will be a meaningful contributor to the growth of the company and yield significant benefits to all of its stakeholders,” CEO Philip Pascall said in a statement.

First Quantum bought the Kevitsa project in June 2008 when it acquired Canada's Scandinavian Minerals, but said earlier this year that it would defer the decision to develop the project as part of its plans to conserve cash amid low copper prices.

The copper-and-gold miner, which has mines in Zambia, the Democratic Republic of Congo and Mauritania, said at the time it was seeking diversification, both geographical and to new commodities.

Now that the board approval has been confirmed, detailed engineering will begin before the end of 2009, the firm said.

All the material mining permits have already been received, after the company received its environmental permit in July and the mining concession for Kevitsa in September.

First Quantum also reported on Monday that it has increased the mineral reserve estimate for Kevitsa, to 107-million tons, grading 0,296% nickel, 0,272 nickel sulphide and 0,418% copper, using a nickel sulphide cutoff grade of 0,147%.

The previous reserve estimate was just 66,6-million tons, and both nickel and copper grades have improved compared with the reserves previously published by Scandinavian Minerals in July 2006.

The openpit mine is expected to operate for more than two decades and the life-of-mine cash operating cost is estimated at around $2,50/lb of nickel, net of by-product credits.

The ore treatment plant will have a permitted capacity of five-million tons a year, but will be built to allow for future expansions.

The operation will produce two concentrates – a copper/gold concentrate and a nickel concentrate that will contain most of the PGEs.

First Quantum plans to secure offtake arrangements for the separate treatment of both concentrates and will target international and local smelters.

Shares in First Quantum rose 1,3% on Monday, to C$82,17 apiece by 14:06 in Toronto.

The company, which announced this month it will buy Zambia-focused explorer Kiwara, expects to produce 380 000 t of copper this year and 205 000 oz of gold.

In September, First Quantum halted operations at its Kolwezi project, after an order was issued by the general prosecutor of the Democratic Republic of Congo's (DRC's) Katanga province to "seal" the facilities of Kingamyambo Musonoi Tailings, the permit holder.

The Kolwezi project is owned by First Quantum (65%), DRC State mining company Gècamines (12,5%), the Industrial Development Corporation of South Africa (10%), the International Finance Corporation (7,5%) and the government of the DRC (5%).

First Quantum has said it and its partners believe the government's actions do not have any legal standing and has said it may file for international arbitration.