Market Spotlight: Xstrata Nickel

This month, we look at Xstrata Nickel, whose CFO, Shaun Usmar, spoke at the recent Canada-EU Forum in Gatineau, Quebec, Canada, about the importance of nickel to both Canadian and European commodity futures. Usmar also provided an update about the upcoming year for Xstrata Nickel’s business.

Xstrata Nickel’s mining operations include mines and processing facilities in Ontario and Québec, Canada; a ferronickel mine and processing facility in Bonao, Dominican Republic; high-grade sulphide mines and a processing facility in Western Australia; and a refinery in Kristiansand, Norway.

New Caledonia

Xstrata Nickel also has a very promising portfolio of growth projects, including Kabanga in Tanzania, Araguaia in Brazil, and Koniambo in New Caledonia. Xstrata Nickel is a 49 per cent joint-venture partner in the development of the Koniambo ore body in New Caledonia. According to the website, “Koniambo is a world-class resource. Nickel is contained in both saprolite and limonite with grades that compare favourably with other laterite deposits in the world. The saprolite orebody contains 142.1 million tonnes of measured and indicated resources grading 2.13 per cent nickel and 156.0 million tonnes of inferred resources grading 2.2 per cent nickel.”

Xstrata would extract nickel using a smelting process to produce ferronickel, using an updated version of the process used at the company’s Falcondo operations, called nickel smelting technology (NST). “Initially, nickel will be extracted from the saprolite part of the orebody. In future expansions, there are plans to extract nickel from the limonite orebody, an undiluted inferred resource of 100 million tonnes of 1.6 per cent nickel, using a hydrometallurgical process,” the company says.

Using intuitive regulation is imperative for future growth

Usmar spoke at length at the Forum about the possibilities of New Caledonia for Xstrata Nickel, and explained how intuitive regulation will help the nickel industry move forward, including the Koniambo project.

Usmar spoke about Nickel mining regulation, and the importance of good regulatory decisions, as certain current proposed regulatory changes will have astounding impacts on the nickel industry. While, according to Usmar, the EU’s regulatory decisions are “well-intentioned,” he said that regulators “must consider the wider consequences of conduct” with reference to stakeholder engagement. He added that “these decisions must be based on the best science available, and most definitely consider risk and impact assessment to be better informed. Regulation must be proportionate to the risk proposed.”

While improved regulatory frameworks are not the first thing affecting the nickel industry, it certainly will be a more crucial factor to industry growth as the world recovers from recession.

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