Norilsk Nickel to Restart its Lake Johnston Nickel Ops in Australia

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Dec. 7 – Russia’s Norilsk Nickel, the world’s top nickel and palladium producer, has said it will restart its idle Australian asset Lake Johnston, which mines sulphide ore and produces nickel concentrate.

The decision was announced during a business trip of the General Director of MMC Norilsk Nickel Vladimir Strzhalkovsky to the company’s Australian assets.

Currently, the enterprise is carrying out restoration works. Production is scheduled to start for the first half of 2011.

Due to an unfavorable economic environment and a drastic fall in nickel prices in 2009, the company’s Australian assets were placed on care and maintenance indefinitely, but based on the result of internal audit conducted in 2010, it was decided to re-launch production.

The Lake Johnston unit, together with other Australian assets – Cawse, Black Swan, Lake Johnston, Waterloo, and Honeymoon Well, became part of Norilsk Nickel as a result of the LionOre Mining International Ltd and OM Group’s nickel business acquisitions in 2007.

In 2008, the Lake Johnston plant produced 8,900 tons of nickel in concentrate.
Lake Johnston is located 540 kilometers from Perth in Western Australia and consists of the underground mine Maggie Hays and concentration plant located three kilometers from the deposit. The plant uses technology of sulphide flotation for ore processing.

Commercial production of nickel at the Maggie Hays mine started in Q3 of 2006.
The operation also includes a concentrator which processes mined ore using the traditional sulfide flotation technique.

Lake Johnston has geologic reserves of 146,000 tons of nickel and mineable reserves of 38,000 tons. Close to 1 million tons of ore can be mined annually, which transfers into 9,500 tons of metal.

Demand for nickel exceeded the supply by 41,000 tones in the period between January – September 2010.

“The launch of Lake Johnson forms the basis for development of the company’s production capacities in Australia. Launching a number of Australian assets will eventually help us to strengthen positions on the market,” Strzhalkovsky stated in a company press release.

“The project became once more economically viable, and there were grounds to start it over again,” Alexander Puhaev from VTB said to the Russian daily Kommersant.

Norilsk Nickel’s international assets include operations in Finland, the United States, Australia, Botswana and South Africa.

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