BHP Billiton's Nickel West business unit (pictured here) will buy nickel concentrate from Sirius' new Nova mine, in Western Australia.
JOHANNESBURG (miningweekly.com) – ASX-listed Sirius Resources has signed a three-year deal with BHP Billiton to sell about half of its planned nickel sulphide concentrate production from the Nova mine, in Western Australia, to the major’s Nickel West operation.
The mine, which was currently under development, would produce about 26 000 t/y of nickel, in addition to copper and cobalt, and would operate for ten years. Sirius reported on Monday that concentrate production was likely to start in late 2016.
The company would truck concentrate by road from the Nova mine site to Nickel West’s processing facilities at Kambalda.
BHP Billiton placed its struggling Nickel West operations under review last year after missing out to rival Jinchuan Group of China on a nickel supply contract with Western Areas. The company also tried to sell its Nickel West divisions, comprising the Mt Keith, Cliffs and Leinster mines, as well as the Kalgoorlie smelter, Kambalda concentrator and the Kwinana refinery, but in November 2014 shelved its plans after failing to secure an acceptable offer.
The contract with BHP Billiton is consistent with Sirius’ previously stated aim of splitting its planned nickel concentrate production between two customers. The junior reported that negotiations with another party were ongoing and could be concluded by the middle of 2015.
Sirius did not elaborate on the commercial terms of the offtake agreement with BHP Billiton, but stated in a statement that the terms reflected the anticipated “exceptionally high-quality of the Nova nickel concentrate”.