PERTH (miningweekly.com) – The board of nickel miner Western Areas has approved a A$17.5-million investment in its mill recovery enhancement project (MREP) in Western Australia.

The MREP will process one of the tailings streams from the flotation plant, which contains valuable amounts of nickel that cannot be recovered as a saleable concentrate by traditional flotation methods.

The stream will be leached at atmospheric pressure using a patented BioHeap process in fibreglass tanks to recover the additional contained nickel.

The MREP will increase mill recoveries from 3% to 5% over the life of the mine, and will add an additional 1 400 t/y of nickel recoveries. While construction is expected to take six months to complete, Western Areas is targeting the production of first high-grade nickel sulphide from the MREP in the March quarter of 2018.

Over the last 12 months Western Areas has refined the project, which has resulted in an additional 200 t/y of nickel being extracted, compared with the original design.

While the MREP was initially announced in 2015, the project was subsequently deferred as part of a capital expenditure reduction initiative for the 2016 calendar year.

MD Dan Lougher said on Wednesday that the restart of the project demonstrated Western Areas’ track record of employing innovation as a core strength to create additional margin in the business.

“The MREP is innovative and industry leading, particularly given we are extracting additional nickel from the tailings stream that was previously considered waste, and using our wholly-owned BioHeap leaching process and converting it into marketable product applicable in the EV [electric vehicle] battery market and/or the conventional nickel concentrate market.”

Lougher said that while the base case economics for the MREP included recent new offtake terms, Western Areas believed that there was still significant upside potential for the project.

“Over the last 18 months we have been in discussions with major global companies active in the EV battery market. The demand for nickel products in this market has intensified substantially and we have an expectation, based on our discussions, to improve commercial terms for our new 45% to 50% high-grade product generated by this project.

“As such, any improvements in those commercial terms will enhance the base case economics presented today.”

Lougher said that the low-risk project also only scratched the surface of available opportunities to apply the company’s patented BioHeap leaching process to other base metals projects, as mine grades declined and companies sought innovative processes to extract value from resources.

The MREP, which will operate at a unit cash operating cost of A$2.44/lb of nickel in concentrate, and with an internal rate of return of 33%, has an expected payback date of June 2020.