The Sudbury Star is the City of Greater Sudbury’s daily newspaper.
First Nickel had no choice but to stop developing an underground ramp at its Lockerby Mine because of low nickel prices and large worldwide stockpiles of nickel.
Before the end of the year, the company’s board of directors may have other tough decisions to make.
FNI president and chief executive officer Thomas Boehlert said continuing ramp development wasn’t economically viable because the company was spending millions on it. For now, FNI will continue to mine nickel and copper on and above the 6,800-foot level of the mine.
Boehlert expects that ore will be mined out by some point in the third quarter of this year, although he said FNI will prolong that for as long as it can based on nickel prices and the company’s production rate , “with safety being the No. 1 objective, particularly during this period of time.”
It is almost inevitable FNI will have to place the mine on care and maintenance or even close the operation, remove the buildings and reclaim the site. Mining companies are required by law to present plans to government for how they would decommission a mine and how much it will cost to do so before they begin operation.
A decision about reclaiming the mine wouldn’t like be made before the end of the year, said Boehlert.
“If it doesn’t make sense to keep spending money on care and maintenance, then we would do that,” he said.
There also is the possibility that FNI could sell the property, he said.
In the medium and long term, nickel prices will likely strengthen, “but it’s an issue of getting from here to there and not being able to fund further development to continue to build out the mine based on what we’re generating from the business,” said Boehlert.
FNI purchased Lockerby Mine from Falconbridge in late 2004 after that company had stopped mining it. FNI suspended operations in October 2008 when nickel prices fell by half and it laid off 150 people. It resumed production in 2011 when nickel prices rebounded. But in January of this, it cut 30 union jobs and a number of management and non-union positions.
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