Depressed nickel prices have affected another operation in Western Australia, with mining at TSX-listed First Quantum Minerals’ Ravensthorpe project to be suspended as part of a three-year plan.
Depressed nickel prices have affected another operation in Western Australia, with mining at TSX-listed First Quantum Minerals’ Ravensthorpe project to be suspended as part of a three-year plan.
Existing ore stockpiles will be processed through an atmospheric leach circuit, rather than by high-pressure acid leach processing for around 18 months, before mining recommences on older orebodies.
Ravensthorpe Nickel Operations (RNO) general manager Scott Whitehead said reducing the mine's operating activities for a set period was the best decision for all parties.
"Transitioning to a new operating model will allow us to continue to produce and export our nickel product, which is a critical mineral and has a lower carbon footprint than other suppliers," he said.
"The operational changes will ensure RNO remains viable longer term and we will retain most of our residential and fly-in, fly-out workforce, thereby supporting the communities of Hopetoun and Ravensthorpe and providing income for the region and WA."
Business News understands staff at the project were informed of the decision a short time ago, with around 30 per cent of the company's directly employed workforce to be let go.
The decision is expected to have ramifications for the local community, with around 100 employees understood to be based in nearby Hopetoun. Around 650 people are employed at the project, according to the company at the opening of the Shoemaker-Levy mine in 2021, with approximately 450 of those direct employees.
Ravensthorpe generated a $US66 million ($A98 million) operating loss for owners First Quantum and POSCO over the nine months to the end of September, and today's announcement marks the second nickel mine curtailment in as many weeks in WA.
The project, originally developed by BHP, has a history of stop-start operation having first entered commercial production in late 2011 before being put on care and maintenance in 2017.
Production resumed at Ravensthorpe in early 2020.
First Quantum sold a 30 per cent stake in the project to POSCO in 2021 for $C240 million.
In 2022, the project operators applied for environmental approvals to mine the project through to 2041, as they shifted their focus to the Shoemaker-Levy orebody.
The price of nickel has fallen by almost half over the past 12 months, despite the metal playing a key role in the manufacture of steel and batteries.
The Ravensthorpe decision follows the suspension of operations last week at the Savannah nickel mine in the Kimberley region by the administrators of Panoramic Resources.
Mr Whitehead said the company anticipated a full scale up of operations when the price of nickel improved.
“It’s important we position ourselves to respond in a timely manner to future improvements in the nickel price by being able to reactivate our mining activities at the preferred time,” he said.
RNO expects to produce and export around 16,000 contained tonnes of nickel concentrate from stockpiles over the next three years.
