|The Basamuk Bay processing facilities for the Ramu Nickel-Cobalt Project on Papua New Guinea’s north coast.|
The Kurumbukari mine, the Basamuk treatment plant and the 135km slurry pipeline to the treatment plant, which comprise the Ramu Nickel-Cobalt Project, continues to ramp up to full production. The plant achieved an average of 77% of nameplate capacity in the September quarter against a planned rate of 80% and a continued improvement of the 52% achieved during the March quarter and 66% during the June quarter.
A 135km pipeline connects the mine to the treatment plant which is on the coast and 75km east of the provincial capital of Madang. The 3 autoclave Basamuk treatment plant is designed to have annual production of 31,150 tonnes of nickel and 3300 tonnes of cobalt.
The project’s operator and majority owner is Hong Kong and Shanghai listed Metallurgical Corporation of China (MCC) while ASX-listed Highlands Pacific has an 8.5% equity interest which will increase to 11.3% at no cost after internal project debt has been repaid from operating cash flow. Highlands has an option to acquire an additional 9.25% at fair market value which could increase its interest to 20.55%.
MCC expected to produce 22,000 tonnes of nickel, or 70% of nameplate capacity, in 2014 before reaching full production in 2015. Sales contracts are in place for the full 2014 and 2015 forecast production with Chinese and international buyers. The mid-range forecasts for the LME nickel price remain positive with deficits forecast for 2015 to 2017.
Ore mined during the quarter was 1.632 million tonnes and ore transported to the treatment plant was 613,000 tonnes. During the quarter there was 16,546 tonnes of mixed nickel cobalt hydroxide intermediate product produced containing about 6018 tonnes of nickel and 636 tonnes of cobalt.
In its third quarter report Highlands said all major operating elements of the treatment plant were working as designed. Additional washplant capacity was being commissioned in October and was expected to be fully operational from November. This is at no cost to Highlands and is expected to enhance production ramp up.
At Highlands’ Star Mountain copper-gold exploration project discussions continue with potential joint venture partners for the next stage of exploration. The camps remain on a care and maintenance basis. The project is about 25km from the Ok Tedi mine and includes four licences covering 515sqkm.
Managing director John Gooding says, “The continued improvement in production at Ramu is pleasing and we are now assessing our nomination into the project early in 2015 depending on continued production performance, nickel price and final year audited accounts. These operating surpluses will be used to pay our capped share of development costs with the remainder flowing through to us.”