Consolidated Nickel Mines (CNM) plans to restart the Munali Nickel mine in southern Zambia and is targeting production by year-end – this on the back of robust demand, CEO Simon Purkiss tells SA Mining.
“There is strong and growing demand for products that use nickel, including batteries which are used in the manufacture of electric vehicles, and in stainless steel. In fact, the electric vehicle (EV) market, which uses 40kg of nickel per electric vehicle, is growing at 20% per annum,” explains Purkiss.
A Bloomberg New Energy Finance report earlier forecast that EV sales would reach 41 million by 2040. This represents 35% of new light-duty vehicle sales and is almost 90 times the equivalent figure for 2015, when EV sales were estimated at 462 000, some 60% up on 2014, the report said.
According to Purkiss, the previous owners of the Munali Nickel mine spent $180m on developing the mine and installing a top-quality concentrator. As it stands, the project consists of a fully developed mine and an operational crush, mill, float plant with a capacity of 80 000t/m and forecast production of around 5 000 tonnes/pa of nickel in concentrate over a seven-year life of mine.
CNM, meanwhile, is looking to raise around $40m, $10m of which is earmarked for new mining equipment and a dense-medium separation plant, currently under construction by South African engineering company Consulmet. CNM is also conducting a feasibility study to determine the viability for an onsite processing plant that will produce nickel metal at site, significantly improving the economics of the operation.
Discussing project viability, Purkiss explains that the previous owners deployed an “incorrect geological model and mining method”, which resulted in the operation being uneconomical. As such, CNM adjusted the mining method, revised the metallurgical process and improved its labour structure to increase the mine economics.
The previous owners were mining at a cost of $12 000/t, whereas CNM expects to achieve production at $7 000/t at a current sale price of $10 000/t. The geological remodelling and some down-dip exploration will extend the current life of mine beyond 10 years.
“We have all the relevant licences and permits in place, and are in the process of upgrading the environmental impact assessment. Further, we have completed the village relocation programme, which has seen around 500 people relocated to a newly established village some 20km away, and we are also busy transferring the title deeds to the new home-owners.”
Aside from the new homes, CNM has also built a school and established a new clinic in the village.
Meanwhile, the Munali project is reaping the benefits of the economic downturn with the availability of a pool of top skills, as well as extremely competitive equipment supply rates.
Once complete, the mine will employ in excess of 350 people, the majority of whom will be Zambians.