Inco eyes new nickel projects

Bullish about the outlook for the world nickel market, Inco (TSE) will expand current operations and develop new projects at home and abroad.

In 1996, the company expects to produce 430 million lb. of nickel, about 6.5% more than the amount forecast for 1995. By the end of this decade, however, production is expected to rise to at least 480 million lb., the source of which will be existing facilities and new, lower-cost operations.

Some of this will be achieved by developing high-grade reserves at its Canadian mines. But Inco is also moving ahead with a US$550-million expansion at PT Inco in Indonesia. The objective is to boost production to 150 million from from 100 million lb. by the end of the decade. “This project has potential for further expansion,” Inco President Michael Sopko told a group of Toronto mining analysts.

The company aims to increase annual production even further — to 630-680 million lb. — once new projects (such as Voisey’s Bay in Labrador, Barro Alto in Brazil, and Goro in New Caledonia) are brought into production during the next decade.

The company is looking to produce at least 130 million lb. per year at Voisey’s Bay, in which it holds a 30% direct and indirect interest. Drilling has outlined 32 million tonnes of diluted, minable, open-pit reserves in the ovoid zone containing 2.83% nickel, 1.68% copper and 0.12% cobalt. Voisey’s Bay hosts substantial, lower-grade deposits, plus the newly discovered Eastern Deeps zone, which is expected to boost overall reserves.

Although Inco conservatively projects the year 2000 as a possible startup date, Sopko says Voisey’s Bay may come on-stream even earlier, perhaps by 1998.

He added, however, that several issues have yet to be resolved, including native land claims, permitting and taxes. Also, the flow-sheet for metallurgical processing has not yet been decided.

Farther afield, the company is looking to complete a feasibility study of the Goro project in New Caledonia, where reserves total 165 million tons grading 1.6% nickel and 0.16% cobalt. The project, which is described as “an island of nickel,” is believed to have potential for significant reserve expansion.

Goro is viewed as a potentially long-term operation, where acid pressure leaching and solvent extraction-electrowinning would be carried out. Laboratory test work for this process is under way.

“We are confident it will be a go,” Sopko said, adding that the technology is designed specifically for Goro and is not suited to Voisey’s Bay.

For future growth, Inco is also looking to Brazil, where it has held mining rights for the past 30 years. Recent changes to foreign investment laws have prompted Inco and partner Korea Zinc to conduct a feasibility study for Barro Alto, targeting annual production of 40 million lb. of nickel-in-matte. The study should be completed in 1996.

Production is expected to exceed 30 years.

Inco expects demand for nickel will remain strong in the years ahead, particularly from Asia. Currently, about half of the company’s sales are to Asian markets.