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Poseidon buys another Norilsk project

Poseidon buys another Norilsk project

Photo by Bloomberg

3rd September 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Nickel miner Poseidon has continued its acquisition trail, announcing on Wednesday that it had bought the Lake Johnston nickel project, from Russian major Norilsk Nickel, in Western Australia.

The value of the transaction was not revealed.

Operations at Lake Johnston were suspended in April last year, as nickel prices fell.

The project is estimated to contain about 70 500 t of nickel, and includes an underground mine and a 1.5-million-tonne-a-year concentrator plant. Historically, the mine produced some 12 000 t/y of nickel.

Poseidon said on Wednesday that it would evaluate a restart at Lake Johnston, with a view of bringing the project back into production shortly after contract completion.

“Poseidon now has three projects all within 270 km of Kalgoorlie. Importantly, all three projects have the mines and access to infrastructure to enable production to be brought on-line quickly and at low levels of capital investment,” said Poseidon MD and CEO David Singleton.

“All of the projects are in well-endowed mining regions and have demonstrated resource extension potential which could lead to extended production life.”

The Lake Johnston acquisition comes shortly after Poseidon acquired the Black Swan operation, also in Western Australia, from Norilsk in July this year, also for an undisclosed amount.

By August, Poseidon revealed that it could save about A$240-million at its Mt Windarra operation by processing ore from the mine at the Black Swan plant.

“We will be growing our output just as nickel supply is moving into deficit following strong Chinese stainless steel production, reportedly up 18.2% year-on-year, and reduction of nickel supply from Indonesia,” said Singleton.

Edited by Creamer Media Reporter

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