INSG Environmental & Economics Session. Bruce Wedderburn. 27 th April 2010

Transcription

1 INSG Environmental & Economics Session Bruce Wedderburn 27 th April 2010 Industrial Minerals

2 Agenda Laterite hydromet options HPAL Heap leaching Capital and operating costs Economics Technology trends

3 Laterite Hydromet Options Caron process (Reductive roast) High pressure acid leach (HPAL) EPAL (Amax) (HPAL & AL) Atmospheric leaching (AL) Atmospheric chloride leach (ACLP) Direct Nickel (atmospheric) (DN) Sulphation atmospheric leach (SAL) Heap leaching (HL)

4 HPAL Process Existing Operations Moa Bay (Sherritt) Murrin Murrin (Minara) Cawse & Bulong (S/D) (Norilsk) Coral Bay (SMMC) Ravensthorpe (S/D) (BHPB) Committed Projects Goro (Vale Inco) Ambatovy (Sherritt) Ramu (MCC) Taganito (SMMC) Planned Projects Gladstone, Vermelho, Weda Bay, Moa Bay expansion

5 Heap Leach Committed Projects None Well Advanced Projects (Demonstration Plants) Yuanjiang - China (Yunnan Tin Group) Çaldag - Turkey (European Nickel) Murrin Murrin (Minara) Niquel do Piauí (Vale) NTUA Greece (Larco) Acoje Philippines (Rusina) Early Development Projects At least 10 projects in early stages of development

6 HPAL Failures Bulong Comments: Never achieved design throughput of 9 ktpa Significant gypsum scaling Operating costs exceeded sales revenues Operating costs - 300% over initial estimates Capital costs - 100% over budget Was a demonstration plant and never commercially viable Direct SX technology was a failure

7 HPAL Failures Cawse Comments: Never achieved design production of 9.2 ktpa Beneficiation circuit was a failure Operating costs exceeded sales revenues Operating costs - 200% over initial estimates Capital costs - 100% over budget Was a demonstration plant and never commercially viable Simplest flowsheet failed due to ore upgrading

8 HPAL Failures Murrin Murrin Never achieved design production of 45 ktpa Actual capacity probably 32 to 34 ktpa Ni Major plant modifications required Operating costs - 400% over initial estimates Capital costs - 100% over budget Comments: Cash flow positive at opex of US$4.97/lb Ni Write-off of capital and Glencore support Brownfield expansion via heap leaching

9 HPAL Failures Ravensthorpe Never achieved design production of 50 ktpa Only achieved 35% of design (BHPB - May 08) Major failure of beneficiation circuit Operating costs never disclosed Capital costs - 100% over budget Comments: HPAL, AL & back-end circuit never proven Major modifications required to front-end Plant sold to First Quantum Minerals

10 HPAL Successes Coral Bay Achieved design rates within 14 months Expanded plant capacity to 22 ktpa in Apr 09 Operating costs never disclosed Capital costs <10% over budget Comments: Low capital intensity of US$10/lb Ni No acid plant and mixed sulphide production Engineering undertaken by SNC Lavalin SMMC has good in-house nickel experience Learnt from mistakes made in WA

11 HPAL Costs Project Country Plant Capacity tpa Ni Capital Costs US$m Capital Intensity US$/lb Ni Operating Costs US$/lb Ni Moa Bay Cuba 30,000 N/A N/A $3.12/lb Murrin Murrin WA 32,000 $1,300m $18/lb $4.97/lb Taganito * Phil 30,000 $1,300m $20/lb N/A Ramu * PNG 30,000 $1,430m $22/lb N/A Ravensthorpe WA 50,000 $2,800m $28/lb N/A Goro NC 60,000 $4,300m $33/lb $1.15/lb Ambatovy Madag 60,000 $4,500m $34/lb $0.77/lb * HPAL costs to intermediate product All public domain costs

12 HPAL Costs (Normalised) Project Country Plant Capacity tpa Ni Capital Costs US$m Capital Intensity US$/lb Ni Operating Costs US$/lb Ni Moa Bay Cuba 60,000 N/A N/A $3-4/lb Murrin Murrin WA 60,000 $2,000m $15/lb $4-5/lb Taganito Phil 60,000 $3,100m $24/lb $4-5/lb Ramu PNG 60,000 $3,400m $26/lb $4-5/lb Ravensthorpe WA 60,000 $3,200m $24/lb $4-5/lb Goro NC 60,000 $4,300m $33/lb $4-5/lb Ambatovy Madag 60,000 $4,500m $34/lb $4-5/lb All HPAL costs to LME nickel All public domain costs

13 Heap Leach Why heap leaching? Brief history Demonstration plants HL capital and operating costs

14 Why Heap Leaching? Positives Process both limonite & saprolite Process far less complex than HPAL or AL Lower capital intensity Negatives Heap permeability is critical Sensitive to mineralogy Iron chemistry Acid consumption

15 Heap Leach History Nickel laterite heap leaching R&D commenced in early 1990 s at NTUA in Greece NTUA undertook column leaches on Greek laterites Greek laterites consist mainly of hematite and the nickel is contained in chlorite Amenable to heap leaching with minimal acid consumption BHP, WMC and others undertook R&D commencing in mid to late 1990 s

16 NTUA - Greece Demonstration Plant Built a small demonstration plant at Larco mines Process consists of: Heap leaching of laterite ore at ambient temperature Purification of the leach liquor by hydrolytic precipitation Removal of Fe, Al and Cr Simultaneous SX of Ni and Co using the Cyanex 301 Stripping of the loaded organic by Ni spent electrolyte Co extraction over Ni and Co using the Cyanex 272 Stripping of the loaded organic by Co spent electrolyte

17 NTUA - Greece

18 NTUA - Greece

19 NTUA - Greece

20 Balkan Laterites (Greece)

21 Balkan Laterites (Albania)

22 Balkan Laterites (Turkey)

23 Commercial Operation Infrastructure development commenced in 2006 Forestry permits approved in February 2009 Heap leaching expected to commence in mid 2010 Full production of 20 Ktpa Ni & 1.2 Ktpa Co in 2011 Capital cost of US$428m

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28 Two products First Nickel Product (FNP) 34% Ni, 1-1.2% Co, <2% Mn Second Nickel Product (SNP) 24% Ni, 0.8% Co, <8% Mn Potential customers Nickel refineries Smelters Nickel product All mixed hydroxides to be sold to JXTC, following termination of the BHPB off-take agreement, to facilitate 100% debt financing by Chinese banks

29 Economics Production (Ni in mixed hydroxide) tpa 20,400 20,400 Construction Cost US$m Long-term Ni Price US$/lb Capital Intensity US$/lb Cash Operating Cost US$/lb NPV (10% discount) US$m IRR % Total Capital Cost US$m Source: European Nickel Updated: AGM Presentation 29 Mar 10

30 Demonstration Heap Ore crushing completed by end Dec 09 Mix of saprolite & limonite 3,000 tonne heaps to be constructed Heap to be stacked to commercial heights Rain coats to be installed to control water balance

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33 Economics 2010 Production (Ni in mixed hydroxide) tpa 24,500 Ni Construction Cost US$m 423 Long-term Ni Price US$/lb 6.00 Capital Intensity US$/lb 7.84 Cash Operating Cost US$/lb 3.10 NPV (10% discount) US$m 375 IRR % 28 Total Capital Cost US$m 498 Source: European Nickel Updated: AGM Presentation 29 Mar 10

34 Murrin Murrin Growth Targets 400,000 tpa of scats under leach Ore is being leached together with scats Current pad capacity yields 2,000 tpa Ni Heap Leach infrastructure sized for 10,000 tpa Ni Currently reviewing growth plans including HL

35 Murrin Murrin

36 Murrin Murrin

37 Murrin Murrin

38 Níquel do Piauí - Brazil Demonstration Plant Vale constructed a demonstration plant in northern state of Piauí in Brazil GRD Minproc awarded contract in 2008 for front end engineering study comprising Flowsheet development, Engineering for crushing, infrastructure and Nickel bearing solution metallurgy, Capital and operating cost estimates. Completion of basic engineering planned for 2009 Commercial production estimated for 2012 with a capacity of 36,000 tpa Ni

39 Níquel do Piauí - Brazil

40 Níquel do Piauí - Brazil

41 Heap Leach Costs Project Country Plant Capacity Capital Costs Capital Intensity Operating Costs tpa Ni US$m US$/lb Ni US$/lb Ni Acoje Philippines 24,500 $498m $9.20/lb $3.10/lb Çaldag Turkey 20,400 $428m $9.50/lb $3.49/lb NiWest WA 13,100 $340m $11.80/lb $2.49/lb Canegrass WA 20,000 $650m $14.70/lb $2.67/lb Wowo Gap PNG 20,000 $860m $19.50/lb $2.74/lb Jump-up Dam WA 10,000 $510m $23.10/lb $6.39/lb Heap leach capital costs to intermediate product

42 Economic Comparison Parameter HPAL HL Nickel Production (LOM) tpa 55,700 32,800 Cobalt Production (LOM) tpa 4, Capital Cost US$m $3,750m $950m Capital Intensity US$/lb Ni $30.5/lb $13.1/lb Cash Cost (exclude by-products) US$/lb Ni $4.59/lb $3.58/lb Cash Cost (include by-products) US$/lb Ni $3.86/lb $3.39/lb NPV (10% real, non geared) US$m ($2,160)m $220m IRR (real, post tax) % 1.6% 17% Capital Payback (from free cash) Years N/A 7 years

43 Technology Trends FeNi Smelting Well proven & low risk technology Capital costs - recent escalation Operating costs energy dependent Requires high grade ore feed Ore Calcining Been considered previously Not demonstrated or proven Roasting / magnetic separation of interest Unlikely to compete with Ni pig iron Ore upgrade for smelter - possible application

44 Technology Trends Ni Pig Iron Well proven & low risk technology Environmental emissions major concern Low capital cost access by small players High operating costs Switch from blast to electric furnaces Ore suppliers under cost pressure Export of ore from Indonesia to cease To remain a swing producer Ni price dependent

45 Technology Trends HPAL Proven technology but high technical risk Commercial risk high capital exposure Operating costs significantly higher Capital costs rapid escalation Only affordable by major companies Project economics questionable Future developments will be influenced by success of Goro, Ramu, Ambatovy & Taganito

46 Technology Trends Atmospheric Leach Technology has not been demonstrated Possible niche applications Combined HPAL & AL possible Capital costs are high ~80% of HPAL Operating costs are similar to HPAL Project economics questionable Unlikely to succeed unless there is a step change in costs

47 Technology Trends Heap Leach Technology is currently being demonstrated Ore type critical for heap permeability Site specific conditions important Acid key capital and operating cost driver Operating costs lower than HPAL Capital costs significantly lower than HPAL Offers market entry by small companies Will take time to achieve widespread acceptance

48 Bruce Wedderburn April 2010 Industrial Minerals