European Nickel

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Simon Purkiss, Managing Director of European Nickel, is very much in tune with the challenges facing the nickel industry today.

“There has been a bit of a hiccup lately due to the financial crisis but the underlying growth is still there” he says.

“There is a shortage of nickel projects coming on. The majority of the world’s nickel is in laterites (nickel oxide) – over 70 per cent of the world’s resources and the problem with laterites are the very high capital cost to extract the nickel from them. In the past we’ve been talking about projects in the region of three to four billion dollars and only a few of the real major mining companies are actually strong enough to tackle those projects.”

Strong enough and streets ahead of the pack, European Nickel has been busy working to solve this tricky issue.

“The big challenge for the industry is being able to extract the nickel from the laterites economically. That’s what we’ve been working on for the last five years; by applying heap leaching to nickel laterites we will dramatically reduce the capital cost” Purkiss says.

And guess what? It looks like they might just have “cracked it.”

Heap leaching and caldag

“There’s been a lot of work done in laboratories in the past, but we were the first to do large scale trials.  We’ve run over six heaps so far” Purkiss says.
European Nickel’s flagship project is the Caldag mine in Western Turkey.

“We’re very proud of this project. One of the benefits of the heap leaching process is a low carbon footprint. We import sulphur which we burn to make sulphuric acid which generates about 30MW of power on site. Our project actually requires 15MW so the balance is sold back into the local grid. Nickel as an industry is quite a heavy producer of carbon dioxide so it’s a significant step for us” Purkiss says.

“This is going to be one of the largest foreign direct investments in the mining sector  in Turkey for many years. From an environmental point of view we’ve worked to ensure we fully comply with  E.U. requirements.

We aim to set a new benchmark, to be used as a yardstick for future projects in that country.
 
From the beginning we always said we would do things properly. This project is going to be around for 15 years. At the end of it we want to be able to rehabilitate the area” Purkiss explains.

Environmental excellence

“I think the approach we’ve taken to the environment is world-class” Purkiss says.

In addition to the carbon footprint factor within the heap leaching process, lies European Nickel’s overall approach to communities and conservation.
“We’ve been in the region for about four or five years now. We have had a lot of involvement in the local community, done a lot of community projects there. We’ve refurbished schools and village halls; we’ve planted a lot of trees – around 20,000 – including olive groves for the locals to allow them a new means of income. We’ve worked with the local municipality on the rehabilitation of what was basically a waste area on the edge of town. It’s now fully grassed with trees and football pitches “Purkiss says.

“And, for example, from a people development point of view the cook who was working in our canteen has branched out and set up his own restaurant in town, still supplying our workers with food and he now employs about six people. We’re happy to see that as well.”

It certainly appears that where there’s a will there’s a way at European Nickel. Obtaining their much needed forestry permit is another example.

“We needed to get it from the Turkish government to cut down some trees and we battled for about two years to get it. We have now got it, the permit was granted in February and the project can now proceed subject to our getting the required finance” Purkiss says.

“We’ve already spent about $74 million dollars on the project and we will need another $350 million dollars to finish the project off.”
What’s next for European Nickel?

“Our current focus is to get the project financing for Caldag.  As the western banks are closed for project financing, we’re doing that through China” Purkiss says.

“Our first priority is getting Caldag up and running. We have all the equipment sitting there just outside of the project area. We’ve done all the infrastructure development, we’ve got the forestry permit so the only thing missing now is getting the project financing in place and building the rest of the project.”
But if you thought that European Nickel is about to stop there, you are mistaken.

“In the longer-term, well we’ve learned a lot about heap leaching. We believe it can bring the same economics to similar deposits and in the past that’s been ignored by the nickel laterite industry because of the high capital costs. Projects in the three to four billion dollar range need 200 to 300 million tonnes of ore in order to last long enough to make a decent kind of return on that sort of capital investment” Purkiss says.

“There are a lot of projects out there which aren’t that size – we’re talking 40 to 50 million tonnes – that are known, but nobody has been able to find an economic way to develop them. There are numerous deposits around the world for which we believe we can apply the same sorts of technology, engineering knowledge and approach to bring them into operation.  Our Acoje joint venture project with Rusina mining is an example of the type of development we are focusing on to capitalise on the five years of work and the knowledge we have gained in heap leaching of nickel laterites.  We think we’ve cracked it now.”

And if European Nickel really have “cracked it” the nickel laterites world is about to get very, very exciting.

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