Ravensthorpe nickel mine is reaching its target production rates, only months after returning to full operations under new Canadian owners First Quantum Minerals.
First Quantum bought the former BHP Billiton white elephant for $US340 million in 2010 and spent last year getting the mine back on the rails, spending about $US303 million ($287 million) in the process.
Ravensthorpe began commercial production again in late December.
Ravensthorpe nickel operations general manager Rudi Badenhorst told _WestBusiness _ yesterday the mine had produced about 11,200 tonnes of nickel. In its quarterly report, released yesterday, First Quantum said it expected the mine to produce 33,000t to 36,000t of nickel in 2012 and Mr Badenhorst said the operation was already running close to its planned production rate.
"Last month we made almost 3000 tonnes of nickel, almost the full run rate of 39,000 tonnes at year," he said.
First Quantum almost completely redesigned the processing plant. First Quantum said yesterday it spent $US303 million last year on "final development and costs incurred during the commissioning phase", substantially more than the $US190 million capital costs it initially forecast. Mr Badenhorst said there had been no significant blowouts, however, and the additional costs were "owner's costs" related to the recruitment of new staff and other commercial costs relating to the operations start up.
BHP sacked 1800 workers when it shuttered Ravensthorpe in 2009, but the First Quantum operation is running far leaner. The company now directly employs around 300 full time staff, including 200 locals, and still wants another 60 to 70 workers across its operations. Including contractors the Ravensthorpe operation is expected to run with fewer than 500 full time staff.
Mr Badenhorst also flagged further potential investment by First Quantum in WA, saying the establishment of a local nickel refinery was an option "under consideration", though any decision was still some time away. Cash costs at Ravensthorpe run at $US7 a pound. To reduce that to the target of around $5.25/lb, First Quantum would need to lift payable nickel concentration from Ravensthorpe to about 97 per cent, said Mr Badenhorst.