PERTH (miningweekly.com) - Mineral sands and graphite producer Mineral Commodities (MRC) has flagged a six-week interruption at its Skaland graphite mine, in Norway.
The ASX-listed company on Thursday reported a mechanical failure of the primary ore production drill rig at Skaland, with initial attempts to repair the drill proving unsuccessful.
MRC said in a statement that a number of temporary solutions were identified. Unfortunately, the development rig in use at the mine is not suitable and cannot be redeployed for immediate stoping ore production and temporary repair while awaiting a replacement rig is not possible.
To minimise interruption to revenues, a decision has been taken to source and temporarily rent a drill rig until a permanent solution can be implemented. Options for the permanent rig being evaluated include a complete rebuild of the existing rig or purchase of a new or second-hand drill rig.
The company noted that Skaland had depleted its inventory of finished product and feedstock for the plant, meaning there would be a loss of revenue until the rental rig could be delivered and commissioned.
Discussions are underway with a vendor, and it is estimated that the rental drill should be delivered around mid-October 2023. Taking account of the loss of revenue and additional costs for the rental machine, MRC estimates a negative impact to cash flows of approximately $0.6-million to $0.9-million depending on the timing of delivery of the rental machine.
“This is an unfortunate but temporary interruption to business at Skaland which remains a critical asset in our battery minerals division strategy. As the new CEO my priorities will be on delivering improvements to underpin strong positive cash flows from the Tormin mineral sands operation in South Africa and progressing the 'ore-to-battery anode' piloting project to demonstrate the value-generating potential of downstream processes for Skaland and Munglinup," said CEO Scott Lowe.