[ferro-alloys.com]Mincor Resources has taken a major step towards re-starting its Kambalda nickel operations after the company re-engaged with its former long-term offtake partner BHP’s Nickel West to sign a term sheet covering a five-year supply deal.
Shares in Mincor jumped this morning after the company said the new agreement, which replaces a 20-year offtake deal with Nickel West that expired in February, offered “substantially improved terms”.
Mincor did not reveal details of the agreement but said it covered a minimum 200,000 tonnes a year of nickel sulphide ore, up to a maximum 600,000tpa.
The term sheet gives the two parties two months to lock in a full-form offtake agreement, though that can be extended by mutual agreement.
Mincor closed its nickel mines in 2016 after a sustained downturn in nickel prices, but is eyeing a restart of its operations next year under recently appointed chief executive David Southam.
Mr Southam, who joined Mincor from Western Areas last month, said the term sheet set the foundations for a commercially attractive processing and offtake solution, which would underpin the company’s plans to fast-track the restart of nickel mining.
“Mincor has clearly outlined its strategy to re-commence mining operations in Kambalda to take advantage of what we see as a looming generational change in the nickel market — and the signing of this term sheet marks a critical step towards realising that vision,” he said.
Mr Southam said the company had considered investing in its own stand-alone nickel concentrator as well as the option of toll-treating its ore via third parties.
He said Nickel West had offered the best economic outcome for shareholders over the contract term with the lowest risk.
“We believe that the nickel market is on the cusp of a new era, driven by a combination of rising underlying demand from the stainless steel market supplemented by new demand from the global lithium-ion battery industry as it gears up to supply the rapidly growing electric vehicle and energy storage sectors,” he said.
“With respect to nickel content in batteries, our firm belief is that the overwhelming trend is for high nickel content batteries that will predominantly be sourced from nickel sulphide ores.
“With the production solution for Mincor’s high-grade nickel sulphide ore now settled, our focus turns to ramping up our studies to feasibility status while committing additional funding for an accelerated drilling program, particularly at our greenfields discovery at Cassini.”
（The West Australian）