Falconbridge’s Nickel Laterite Koniambo Project in New Caledonia – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.This article was originally published – April/2006

Another major Canadian player in New Caledonian nickel is Toronto’s Falconbridge Ltd. (soon to be swallowed by Inco Ltd.). Falconbridge and its 51% joint venture partner Société Minière du Sud Pacifique S.A. (SMSP), are developing the Koniambo Project in the northern part of the island for start up, perhaps as early as 2009.

Last month, Falconbridge and SMSP (which is owned primarily by the North Province) created an operating company, Koniambo Nickel S.A.S. under the leadership of president Brian Kenny. Koniambo Nickel will hold title to the Koniambo deposit. On March 1, the French minister of overseas territories François Baroin laid the ceremonial first stone for the Koniambo project.

The following day the Koniambo Nickel board met to approve this year’s work program. Preparing the earthworks and advancing the project engineering are the top priorities for 2006. Dredging of a port will begin early in 2007, and the main construction period will be 2008-09. Production will begin very late in 2009 or early in 2010.

Koniambo is an orebody worth developing. The 2004 bankable feasibility study estimated at a 1.5% Ni cut-off grade, the saprolite’s measured and indicated resources total 142.1 million tonnes grading 2.13% Ni. Inferred resources are another 156.0 million tonnes at 1.6% Ni. A capital investment of at least US$2.2 billion would create a mine and smelter producing 60,000 tonnes of nickel as ferronickel annually.

There is also a limonite resource of 100 million tonnes at 1.6% Ni and 0.2% Co that could be developed at a later date.

Falconbridge and SMSP formed their Koniambo partnership in 1988, over the objections of Paris-based Eramet. Eramet had designs on the deposit, and took its claim all the way to the French High Court of Justice. The Falconbridge-SMSP deal was upheld, the court ruled in December 2005.

The development agreement is based on the 1998 Bercy Accord, which specifies each partner’s share of the project and certain other conditions. Chief among the conditions is that Falconbridge complete a positive technical feasibility study, which it did in June 2005, following a bankable feasibility study completed in late 2004. The other condition is that Falconbridge place US$100 million in firm orders for equipment and services to be used exclusively at Koniambo before Jan. 1, 2006, which it did in the middle of December 2005.

Having fulfilled the conditions of the Bercy Accord, Falconbridge has secured its rights to 49% of the Koniambo deposit. Falconbridge has also agreed to arrange financing for the project development costs. The US$2.2-billion estimate for construction (in 2004 dollars) does not include interest, working capital and rising costs. The extras may add as much as US$500 million to the total.

Project summary

The Koniambo project comprises five main components: three open pits, an ore preparation plant, metallurgical plant, port, and water supply system.

Mining will be by conventional truck-and-shovel methods to recover 76.5 million dry tonnes of ore over 25 years. Three pits (Bilboquet, Centre and Manguen) will be opened initially. Excavators and front-end loaders will be used in the pits for ore and waste loading into 50-t rear-dump trucks.

The ore preparation plant and mine industrial area will be located near the Centre ore zone, the geographical centre of the planned mining area. The prep plant will screen and crush ore, rejecting waste. Ore will be conveyed 11.4 km on a covered belt for processing.

The metallurgical plant, power station, waste management, surface water runoff, wastewater management facilities and ancillary infrastructure will be located in the Vavouto industrial area. The plant will have an annual capacity of 60,000 lb of nickel contained in 175,000 tonnes of ferronickel grading 35% Ni. Milling, drying, calcination, reduction and smelting will be accomplished in two parallel process lines using Falconbridge’s proprietary nickel smelting technology.

To provide power for the project, two 135-MW coal-fired boilers with steam turbines will be installed. There will also be two (and eventually three) back-up diesel-fired 40-MW generators. Associated with the power plant will be a pulverized coal injection (PCI) facility, anthracite crusher and distribution system, plus appropriate storage areas for coal and diesel fuel.
The port is designed to handle vessels up to 50,000 dwt. The main wharf will have facilities to store incoming coal, limestone, anthracite and diesel fuel as well as ferronickel destined mostly for the Asian markets.

Going forward

Falconbridge vice-president of communications and public affairs Denis Couture sees no impediment to Koniambo development after the Inco takeover. “A good deposit deserves to be developed,” he noted, “and this is a good deposit.”

Just as construction gets underway at Koniambo, Inco’s Goro mine and plant will be reaching commercial production. The two projects dovetail together very nicely. The Goro construction camp could be shipped to the Koniambo site to house the construction workforce, for example. Koniambo will also benefit from what Inco learns at Goro about the legal side of operating in New Caledonia and the employment of foreign workers.

Now all that needs to be done is to fine-tune the project and get busy.