Ramu mine in production: Highlands

IT HAS been a dreadfully long wait, but Highlands Pacific says the Chinese-built $US1.5 billion Ramu nickel cobalt mine in Papua New Guinea is in production with first sales expected in months.
Ramu mine in production: Highlands Ramu mine in production: Highlands Ramu mine in production: Highlands Ramu mine in production: Highlands Ramu mine in production: Highlands

"After 15 years of studies, various approvals, three years of construction and two years of legal delays, the $1.5 billion Ramu nickel cobalt mine commenced commissioning in late 2011," Highlands managing director John Gooding and chairman Ken MacDonald said in their annual report.

"This world class asset is now in production and nearing first sales in coming months.

"This will mark first cash flow for the project, an opportunity to showcase this asset, and allow for the training and employment of a new generation of Papua New Guinea mining, operational, processing, commercial and technical specialists."

The Highlands executives also put some perspective on the 12 million tonnes of copper, 20 million ounces of gold and 49Moz of silver inventory of the Frieda River project it shares (18.18%) with operator Xstrata Copper in PNG.

"By way of comparison this is more than double all the copper extracted from PNG's 100% owned Ok Tedi mine which has been the economic backbone of the country for 25 years but is now in its declining years."

Ramu is expected to produce 31,150 tonnes per annum of nickel and 3,300tpa of cobalt as mixed hydroxide product, placing it among the world's top 15 nickel producers."

Once in full production the mine operator, China Metallurgical Construction Company, will be able to report cash costs but Highlands has previously estimated C1 cash costs of "around mid-high $US4 a pound on payable nickel" - which is net of by-product credits.

Located 75km west of the provincial capital of Madang, the Ramu wet nickel laterite operation is 85%-owned by China's MCC.

Other joint venture partners are Highlands (8.56%), state-owned Mineral Resources Ramu (3.94%) and landowner company Mineral Resources Madang (2.5%).

Through its JV with the Chinese operator, Highlands has an option to increase its stake to 11.3% once the project development debt is paid off.

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