New tech to make nickel laterites a viable option

Business, Normal
Source:

The National, Thursday 29th December 2011

A GAME-changing technology now in development could make nickel laterites a much more economically viable option.
Direct Nickel (DNi), as it now approaches its ASX listing, might not be considered a current threat to the big global nickel miners, but it is rapidly advancing a technology which vastly improves the economics of processing nickel laterite ores.
While nickel sulfide resources become increasingly scarce because of declining discovery rates, nickel
laterite projects are best known for cost blowouts and other unforeseen difficulties – as well as their relative abundance.
After more than 10 years of development and barely six months of operation, BHP Billiton wrote off more than A$3 billion on the Ravensthorpe nickel laterite mine in Western Australia, which it then sold to Vancouver-based First Quantum Minerals for A$340 million early last year.
A commercial DNi plant was projected to cost a fraction of this amount.
Minara Resources’ WA Murrin Murrin mine is arguably Australia’s only nickel laterite success story but the processing plant has been plagued by difficulties ever since the mine opened in 1999 and has never reached nameplate capacity.
The mine had also faced various challenges this year, especially in the context of additional cost pressures from a strong Aussie dollar, and day-to-day operating cash costs last quarter* reached A$8 per pound of nickel produced.
However, the Holy Grail of unlocking the potential of more than 120 years of forward nickel supply from laterites drilled out around the world hds been discovered – and extensively patented – over the past five years by privately-owned DNi.
Key investors in DNi include the Canadian mining house Teck Resources, OZ Minerals and the CSIRO.
The A$3 million test plant at CSIRO’s Waterford facility in Perth was due to start commissioning before year-end.
Unlike the standard approach of treating laterites with sulphuric  acid through high pressure acid leach (HPAL) processes, DNi’s approach is based on the more valuable and far more chemically efficient reagent of nitric acid.
Murrin Murrin’s HPAL processes use concentrated sulfuric acid at 255C and under pressure of up to 44 atmospheres.
However, the DNi process can do a similar job with no pressure and at sub-boiling temperatures, according to DNi founder and executive chairman Julian Malnic.
He said the crown jewel of this technology was the nitric acid recovery system – which ensures that at least 95% of nitric acid is recycled back to the start of the production circuit.
With less than 5% of the spent acid expected to end up in neutralised tailings, DNi was testing to see if it can effectively grow grass in neutralised tailings material.
Whereas other technologies are limited to the upper limonite or lower saprolite layers of a laterite deposit, DNi’s process treats the full laterite ore profile with previously demonstrated recoveries of more than 95% of nickel and cobalt and with a short leach residence time of one to four hours.
The technology eliminated the sensitivity to wet and dry laterite classifications and also offers reduced carbon emissions.
 “This is the first universal process,” Malnic told PNG Report.
 “Wet and dry, limonite and saprolite – it doesn’t matter.”
Overall, the cash cost of producing a mixed hydroxide (MHP) nickel­cobalt concentrate containing 45% nickel is expected to reach only A$1.83/lb of contained metal (assuming a WA cost setting, 2009 costs and headgrade of 1.22%) excluding credits for co-products cobalt, magnesium and haematite iron.
Capital expenditure costs for DNi, also independently estimated by Jacobs Engineering, come in at A$12.50 per pound of annual capacity – while sulfuric acid-based plants can cost up to A$35/lb, with Xstrata’s New Caledonian project Koniambo at A$37.80/lb and Madagascar’s Ambatovy at A$41.60/lb.
The plant was constructed from 304 stainless steel with “welding rod” construction methods and does not use any exotic alloys such as those required in HPAL plants.
There was already a high level of confidence the technology will work as planned. Well-regarded metallurgist Graham Brock is DNi’s chief technical officer. He formerly was project manager for the development of BHP’s Mt Keith nickel sulfide mine in WA.
Brock ran DNi’s August 2010 demonstration that proved the reagent recycle process at scale.
Queensland Nickel’s Yabulu Refinery in Queensland (and Tocantins in Brazil) used the now largely superseded Caron process, which earned the plant a spot in the top 50 CO2 emitters in the country.
The DNi process offers fewer carbon emissions overall except perhaps for hydro-powered ferronickel smelting operations such as PT Inco’s in Indonesia and HPAL plants that generate their power burning expensive sulphur.
Malnic and DNi CEO Russell Debney were known for their work in building innovative deep-sea explorer Nautilus Minerals, which Malnic founded.
Moving steadily ahead beneath the radar screen of most observers, Nautilus had developed a marine mining system and was well on track to become the first seafloor miner of copper, gold and zinc within a few years.
The beauty of Nautilus’ business plan was that by developing specialist seafloor exploration systems and production tools, it was positioned to become a global authority in marine mining.
It held 600,000 square kilometres of tenements over seafloor terrain in PNG, Solomon Islands, Fiji, Tonga and New Zealand, covering entire metallogenic provinces.
In a similar vein, the underlying ambition with DNi was to leverage its unique technology to transform the company into a major nickel producer.
There were no intentions to licence out the processing technology and parties wishing to gain access must either joint venture their nickel laterite projects with DNi or become one of its cornerstone investors.
DNi had already farmed into a 50% joint venture interest and ope­ratorship of London-listed Regency Mines’ Mambare nickel laterite project in Papua New Guinea for the granting of a process licence for Mambare and no cash consideration.
Located 122km by developed coastal road to the Handymax-capa­city deepwater Oro Bay port, the project covers 242sqkm.
In 1999 Anaconda Nickel estimated that a 158sqkm area contained up to 630 million tonnes at 0.78% nickel and 200Mt at 1.01% nickel in the limonite layer (non-JORC).
No estimate was made for the underlying saprolite layer. – PNG Report
The project was expected to host some 5-7mt of contained nickel in the long term and the joint venture’s first maiden resource, over a portion of the area, was due in the March quarter.
 DNi had flagged possible annual production of 20,000t nickel starting in 2015.