Inco (N-T) has decided to go ahead with the construction of a US$1.4-billion commercial nickel-cobalt project at its Goro nickel-cobalt project in New Caledonia.
The company says it has a fiscal plan in place, expects approval by New Caledonian authorities within the next several months and is arranging financing for the project. This includes the company’s participation in a French Government program that provides financial support to investors in French overseas territories.
Once approval is obtained and financing is secured, construction will begin later this year and commercial production will start in late 2004.
A recently completed bankable feasibility study confirmed a capital cost of US$1.4 billion for a fully integrated mining and processing facility that would annually process 54,000 tonnes nickel and 5,400 tonnes cobalt. Cash costs (after cobalt byproduct credits) are expected to ring in below US$1 per lb.
In June, the New Caledonian congress is expected to pass legislation that would give the company a 100% tax holiday for 15 years, followed by a 50% tax holiday for five years.
In October 1999, Inco opened a US$50-million, 12-tonne-per-day pilot plant at Goro and began testing its proprietary pressure-acid-leach (PAL) technology.
“Our $50-million pilot plant program proved that our proprietary hydrometallurgical and solvent-extraction process technology works and has given us the confidence to proceed with the commercial facility,” said Scott Hand, Inco’s new CEO, in a prepared statement.
The commercial operation will create about 800 permanent jobs, plus another 1,500 indirect positions. More than 90% of the jobs are expected to be held by New Caledonians.
The company is negotiating with several companies who may be interested in a minority stake in the project. Goro is held 85% by Inco and 15% by Bureau de recherches gologiques et minires (BRGM), which is owned by the French government. BRGM, which is traditionally focused on early-stage projects, is expected to sell its interest.
Goro hosts resources of more than 200 million tonnes averaging 1.6% nickel and 0.17% cobalt, plus 47 million tonnes at similar grades in the proven and probable category. The project is expected to produce a nickel-oxide product (containing 78% nickel) and a cobalt-carbonate product. The operation is expected to supply stainless steel customers and specialty cobalt markets in South Korea, Taiwan and, eventually, China.
The project includes extensive revegetation of the mining areas. Inco has been operating an experimental nursery at the Goro site to assure that replanting is compatible with indigenous species. This is a repeat of the successful program the company has implemented at its operations on the Island of Sulawesi in Indonesia. Goro’s environmental, health and safety policies are expected to be compatible with ISO 14000 standards.
Hand has said in the past that Goro and the Voisey’s Bay project in Labrador could conceivably be developed at the same time and that new partners may be brought in for both projects.
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