TORONTO (miningweekly.com) – Toronto-based North American Palladium has restarted palladium production at the firm's flagship Lac des Iles (LDI) operation, in north-western Ontario, it announced on Wednesday.

The mine, Canada's only primary palladium operation, is expected to produce 140 000 oz/y of palladium.

NAP announced earlier this year it would start preparing to reopen the operation, but the restart is well timed, CEO Bill Biggar commented.

The palladium price jumped to a two-year high on Wednesday, boosted by investment demand for ETFs and expectations that the metal, which is used mainly in emissions-reducing autocatalysts, may move into a supply deficit.

LDI was halted in late 2008, after palladium prices left the operation running well below breakeven.

The company is mining ore from the Roby underground zone at LDI at about 2 000 t/d, and expects to ramp up to 2 600 t/d by May 1.

The firm plans to continue mining at the Roby deposit until it is depleted in about two years, when NAP will be ready to move on to its new high-grade Offset zone by 2012, Biggar told Mining Weekly Online earlier this year.

The company also announced on Wednesday that it has also renewed a smelting contract with Xstrata Nickel, on terms “similar” to a previous contract.

The terms of the agreement are confidential, although NAP revealed it is now entitled to receive payments of 70% within 60 days following the month of concentrate delivery.

Shares in NAP, which also operates the Sleeping Giant gold mine in Quebec, rose 7,7% on Wednesday, to C$4,90 apiece by 12:14 in Toronto.

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