Canadian mining company First Quantum Minerals, following the signing of an agreement to acquire BHP Billiton's idled Ravensthorpe nickel mine in Western Australia, said on Wednesday that it plans to begin commercial production at the site within 18 months, Reuters has reported.
First Quantum will pay US$340 million for the mine in the deal. Ravensthorpe is expected to produce an average of 39,000 mt of nickel a year for the first five years after operations restart. Overall, production during its expected 32-year life is forecast at 28,000 mt a year.
BHP had spent about US$2.2 billion to build the mine but shut it in January after just eight months of operations, as nickel prices dropped to barely half the current price of around US$16,100/mt.
The cost of restarting the mine, including working capital, will be about US$145 million, First Quantum chief executive Philip Pascall said on a conference call.