PERTH (miningweekly.com) – Nickel miner Poseidon Nickel has opted to process ore from its proposed Windarra mine, in Western Australia, at its newly acquired Black Swan processing plant, instead of at BHP Billiton’s Nickel West

MD David Singleton said on Tuesday that the company was looking to develop an overall strategy of processing ore from its three mines through its two concentrators.

The company’s first priority was to restart operations at the Lake Johnston project, which was acquired from nickel major Norilsk in September last year, after which production from Windarra would start.

“This would eventually result in us having two operational process plants at Black Swan and Lake Johnston being fed from three mines, including Windarra,” he said.

Singleton noted that the Black Swan operation included a full nickel ore processing plant that had sufficient capacity to process ore from Windarra and Black Swan.

In October last year, Poseidon and BHP entered into a conditional offtake agreement, which was structured in the form of an ore tolling and concentrate purchase agreement, under which Poseidon would supply ore from Windarra, which would be hauled to Nickel West’s Leinster concentrator for toll treatment.

Poseidon said, at the time, that the agreement with BHP reduced the capital costs for the Windarra project from the original A$290-million estimate to only A$11-million.

However, delays in formal approval to deliver ore to the Leinster concentrator had led to the decision to process its own ore, the company said. Poseidon initially believed that a target of first ore deliveries in February this year would be feasible; however, this date had not been met and no timeframe for the receipt of approval had been provided.

The Leinster offtake contract was expected to lapse shortly, and Poseidon would not seek an extension of the contract.

Instead, the new plan would see ore being trucked from the Windarra mine to Black Swan, avoiding significant new above-ground infrastructure at the planned Windarra.

The move to process Windarra ore at the Black Swan plant was expected to result in a capital saving of A$240-million at Windarra, and would produce 9 800 t/y of nickel in a smeltable grade concentrate.

The company said that processing Windarra ore at Black Swan provided the additional benefit of higher production rates of nickel because of the ability to blend ores from both sites.

Poseidon has formally submitted an application to the State Development Minister to start mining at Windarra, and to ship the ore to Black Swan for processing.