MADAGASCAR - The cost of developing the Ambatovy nickel laterite deposit has jumped to $US3.3 billion, up more than 30% over earlier estimates. This news comes from 27.5%-owner SUMITOMO CORP. of Japan. As recently as April 2007, the cost of the project was estimated at US$2.5 billion. Sumitomo recently reached one of the mining industry's largest-ever project debt financing agreementsUS$2.1 billionto cover its share.
The other partners in the project are KOREA RESOURCES CORP. (a consortium of Korean companies with 27.5%) and SHERRITT INTERNATIONAL of Toronto, the 45%-owner and project operator. SNC-LAVALIN has agreed to acquire a 5% equity interest from Sherritt when the project financing closes. Sherritt acquired its share of the project when it purchased Dynatec earlier this year.
The Ambatovy mine is scheduled to begin production in 2010, producing 60,000 tonnes of nickel and 5,600 tonnes of cobalt annually. Ore from the pit will be trucked to a preparation plant, slurried and piped to the processing plant 220 km away. Nickel and cobalt will be recovered using a high-pressure acid leach and solvent extraction circuit. The metals will be precipitated from solution, briquetted and shipped.
The proven and probable mineral reserve number is put at 125.0 million tonnes grading 1.04% Ni and 0.10% Co. The measured and indicated mineral resource is 134.1 million tonnes of a similar grade in both the Ambatovy and Analamay deposits.
Comprehensive information on the Ambatovy project is available at www.Sherritt.com.