Malachite Process Consulting INSG April 2010 Heap Leach ...

Industrial MineralsIndustrial MineralsMalachite Process ConsultingMalachite Process ConsultingMalachite Process ConsultingMalachite Process ConsultingINSG April 2010INSG April 2010INSG April 2010INSG April 2010

INSG Environmental & Economics Session

Bruce Wedderburn

27th April 2010

Malachite Process ConsultingMalachite Process ConsultingMalachite Process ConsultingMalachite Process ConsultingINSG April 2010INSG April 2010INSG April 2010INSG April 2010

AgendaAgenda

Laterite hydromet options

HPAL

Heap leaching

Capital and operating costs

Economics

Technology trends


Laterite Hydromet OptionsLaterite Hydromet Options

Caron process (Reductive roast)

High pressure acid leach (HPAL)

EPAL (Amax) (HPAL & AL)

Atmospheric leaching (AL)

Atmospheric chloride leach (ACLP)

Direct Nickel (atmospheric) (DN)

Sulphation atmospheric leach (SAL)

Heap leaching (HL)


HPAL ProcessHPAL Process

Existing Operations• Moa Bay (Sherritt)• Murrin Murrin (Minara)• Cawse & Bulong (S/D) (Norilsk)• Coral Bay (SMMC)• Ravensthorpe (S/D) (BHPB)

Committed Projects• Goro (Vale Inco)• Ambatovy (Sherritt) • Ramu (MCC)• Taganito (SMMC)

Planned Projects• Gladstone, Vermelho, Weda Bay, Moa Bay expansion


Heap LeachHeap Leach

Committed Projects• None

Well Advanced Projects (Demonstration Plants)• Yuanjiang - China (Yunnan Tin Group)

• Çaldag - Turkey (European Nickel)

• Murrin Murrin (Minara)

• Niquel do Piauí (Vale)

• NTUA – Greece (Larco)

• Acoje – Philippines (Rusina)

Early Development ProjectsAt least 10 projects in early stages of development


HPAL FailuresHPAL Failures

Bulong • Never achieved design throughput of 9 ktpa• Significant gypsum scaling• Operating costs exceeded sales revenues• Operating costs - 300% over initial estimates• Capital costs - 100% over budget

Comments:• Was a demonstration plant and never

commercially viable• Direct SX technology was a failure



Cawse • Never achieved design production of 9.2 ktpa• Beneficiation circuit was a failure• Operating costs exceeded sales revenues• Operating costs - 200% over initial estimates• Capital costs - 100% over budget

Comments:• Was a demonstration plant and never

commercially viable• Simplest flowsheet failed due to ore upgrading



Murrin Murrin• Never achieved design production of 45 ktpa• Actual capacity probably 32 to 34 ktpa Ni• Major plant modifications required• Operating costs - 400% over initial estimates• Capital costs - 100% over budget

Comments:• Cash flow positive at opex of US$4.97/lb Ni • Write-off of capital and Glencore support • Brownfield expansion via heap leaching



Ravensthorpe• Never achieved design production of 50 ktpa• Only achieved 35% of design (BHPB - May 08)• Major failure of beneficiation circuit• Operating costs – never disclosed• Capital costs - 100% over budget

Comments:• HPAL, AL & back-end circuit never proven• Major modifications required to front-end• Plant sold to First Quantum Minerals


HPAL SuccessesHPAL Successes

Coral Bay• Achieved design rates within 14 months• Expanded plant capacity to 22 ktpa in Apr 09• Operating costs – never disclosed• Capital costs <10% over budget

Comments:• Low capital intensity of US$10/lb Ni• No acid plant and mixed sulphide production• Engineering undertaken by SNC Lavalin• SMMC has good in-house nickel experience• Learnt from mistakes made in WA


HPAL CostsHPAL Costs

* HPAL costs to intermediate product

Project CountryPlant

Capacity tpa Ni

Capital Costs US$m

Capital Intensity US$/lb Ni

Operating Costs

US$/lb Ni

Moa Bay Cuba 30,000 N/A N/A $3.12/lb

Murrin Murrin WA 32,000 $1,300m $18/lb $4.97/lb

Taganito * Phil 30,000 $1,300m $20/lb N/A

Ramu * PNG 30,000 $1,430m $22/lb N/A

Ravensthorpe WA 50,000 $2,800m $28/lb N/A

Goro NC 60,000 $4,300m $33/lb $1.15/lb

Ambatovy Madag 60,000 $4,500m $34/lb $0.77/lb

All public domain costs


HPAL Costs (Normalised)HPAL Costs (Normalised)

All HPAL costs to LME nickel

Project CountryPlant

Capacity tpa Ni

Capital Costs US$m

Capital Intensity US$/lb Ni

Operating Costs

US$/lb Ni

Moa Bay Cuba 60,000 N/A N/A $3 - 4/lb

Murrin Murrin WA 60,000 $2,000m $15/lb $4 - 5/lb

Taganito Phil 60,000 $3,100m $24/lb $4 - 5/lb

Ramu PNG 60,000 $3,400m $26/lb $4 - 5/lb

Ravensthorpe WA 60,000 $3,200m $24/lb $4 - 5/lb

Goro NC 60,000 $4,300m $33/lb $4 - 5/lb

Ambatovy Madag 60,000 $4,500m $34/lb $4 - 5/lb

All public domain costs


Heap LeachHeap Leach

Why heap leaching?

Brief history

Demonstration plants

HL capital and operating costs


Why Heap Leaching?Why Heap Leaching?

Positives• Process both limonite & saprolite

• Process far less complex than HPAL or AL

• Lower capital intensity

Negatives• Heap permeability is critical

• Sensitive to mineralogy

• Iron chemistry

• Acid consumption


Heap Leach HistoryHeap Leach History

• Nickel laterite heap leaching R&D commenced in early 1990’s at NTUA in Greece

• NTUA undertook column leaches on Greek laterites

• Greek laterites consist mainly of hematite and the nickel is contained in chlorite

• Amenable to heap leaching with minimal acid consumption

• BHP, WMC and others undertook R&D commencing in mid to late 1990’s


NTUA - GreeceNTUA - Greece

Demonstration Plant• Built a small demonstration plant at Larco mines

• Process consists of:

• Heap leaching of laterite ore at ambient temperature

• Purification of the leach liquor by hydrolytic precipitation

• Removal of Fe, Al and Cr

• Simultaneous SX of Ni and Co using the Cyanex 301

• Stripping of the loaded organic by Ni spent electrolyte

• Co extraction over Ni and Co using the Cyanex 272

• Stripping of the loaded organic by Co spent electrolyte


NTUA NTUA -- GreeceGreeceNTUA NTUA -- GreeceGreece






Balkan Laterites (Greece)Balkan Laterites (Greece)Balkan Laterites (Greece)Balkan Laterites (Greece)


Balkan Laterites (Albania)Balkan Laterites (Albania)Balkan Laterites (Albania)Balkan Laterites (Albania)


Balkan Laterites (Turkey)Balkan Laterites (Turkey)Balkan Laterites (Turkey)Balkan Laterites (Turkey)


Commercial Operation

• Infrastructure development commenced in 2006

• Forestry permits approved in February 2009

• Heap leaching expected to commence in mid 2010

• Full production of 20 Ktpa Ni & 1.2 Ktpa Co in 2011

• Capital cost of US$428m






Two productsFirst Nickel Product (FNP)

34% Ni, 1-1.2% Co, <2% MnSecond Nickel Product (SNP)

24% Ni, 0.8% Co, <8% Mn

Potential customersNickel refineriesSmelters

All mixed hydroxides to be sold to JXTC, following termination of theBHPB off-take agreement, to facilitate 100% debt financing byChinese banks

Nickel product


Economics 2006 2010

Production (Ni in mixed hydroxide) tpa 20,400 20,400

Construction Cost US$m 238 277

Long-term Ni Price US$/lb 4.25 6.00

Capital Intensity US$/lb 5.57 6.12

Cash Operating Cost US$/lb 1.41 3.49

NPV (10% discount) US$m 180 207

IRR % 23 20

Total Capital Cost US$m 300 428

Source: European Nickel Updated: AGM Presentation – 29 Mar 10


Demonstration Heap

• Ore crushing completed by end Dec 09

• Mix of saprolite & limonite

• 3,000 tonne heaps to be constructed

• Heap to be stacked to commercial heights

• Rain coats to be installed to control water balance




Economics 2010

Production (Ni in mixed hydroxide) tpa 24,500 Ni

Construction Cost US$m 423

Long-term Ni Price US$/lb 6.00

Capital Intensity US$/lb 7.84

Cash Operating Cost US$/lb 3.10

NPV (10% discount) US$m 375

IRR % 28

Total Capital Cost US$m 498

Source: European Nickel Updated: AGM Presentation – 29 Mar 10


Murrin MurrinMurrin Murrin

Growth Targets

• 400,000 tpa of scats under leach

• Ore is being leached together with scats

• Current pad capacity yields 2,000 tpa Ni

• Heap Leach infrastructure sized for 10,000 tpa Ni

• Currently reviewing growth plans including HL


Murrin MurrinMurrin MurrinMurrin MurrinMurrin Murrin






Níquel do Piauí - BrazilNíquel do Piauí - Brazil

Demonstration Plant• Vale constructed a demonstration plant in northern state of Piauí in

Brazil

• GRD Minproc awarded contract in 2008 for front end engineering study comprising

• Flowsheet development,

• Engineering for crushing, infrastructure and

• Nickel bearing solution metallurgy,

• Capital and operating cost estimates.

• Completion of basic engineering planned for 2009

• Commercial production estimated for 2012 with a capacity of

36,000 tpa Ni






Heap Leach CostsHeap Leach Costs

Heap leach capital costs to intermediate product

Project Country

Plant Capacity

tpa Ni

Capital Costs

US$m

Capital Intensity

US$/lb Ni

Operating Costs

US$/lb Ni

Acoje Philippines 24,500 $498m $9.20/lb $3.10/lb

Çaldag Turkey 20,400 $428m $9.50/lb $3.49/lb

NiWest WA 13,100 $340m $11.80/lb $2.49/lb

Canegrass WA 20,000 $650m $14.70/lb $2.67/lb

Wowo Gap PNG 20,000 $860m $19.50/lb $2.74/lb

Jump-up Dam WA 10,000 $510m $23.10/lb $6.39/lb


Economic ComparisonEconomic Comparison

ParameterParameter HPALHPAL HLHL

Nickel Production (LOM) tpa 55,700 32,800

Cobalt Production (LOM) tpa 4,100 640

Capital Cost US$m $3,750m $950m

Capital Intensity US$/lb Ni $30.5/lb $13.1/lb

Cash Cost (exclude by-products) US$/lb Ni $4.59/lb $3.58/lb

Cash Cost (include by-products) US$/lb Ni $3.86/lb $3.39/lb

NPV (10% real, non geared) US$m ($2,160)m $220m

IRR (real, post tax) % 1.6% 17%

Capital Payback (from free cash) Years N/A 7 years


Technology TrendsTechnology Trends

FeNi Smelting• Well proven & low risk technology• Capital costs - recent escalation• Operating costs – energy dependent• Requires high grade ore feed

Ore Calcining• Been considered previously• Not demonstrated or proven • Roasting / magnetic separation of interest• Unlikely to compete with Ni pig iron• Ore upgrade for smelter - possible application



Ni Pig Iron

• Well proven & low risk technology

• Environmental emissions – major concern

• Low capital cost – access by small players

• High operating costs

• Switch from blast to electric furnaces

• Ore suppliers under cost pressure

• Export of ore from Indonesia to cease

• To remain a swing producer – Ni price dependent



HPAL• Proven technology but high technical risk

• Commercial risk – high capital exposure

• Operating costs – significantly higher

• Capital costs – rapid escalation

• Only affordable by major companies

• Project economics questionable

• Future developments will be influenced by success of Goro, Ramu, Ambatovy & Taganito



Atmospheric Leach• Technology has not been demonstrated

• Possible niche applications

• Combined HPAL & AL possible

• Capital costs are high ~80% of HPAL

• Operating costs are similar to HPAL

• Project economics questionable

• Unlikely to succeed unless there is a step change in costs



Heap Leach• Technology is currently being demonstrated

• Ore type critical for heap permeability

• Site specific conditions important

• Acid – key capital and operating cost driver

• Operating costs – lower than HPAL

• Capital costs – significantly lower than HPAL

• Offers market entry by small companies

• Will take time to achieve widespread acceptance

Industrial MineralsIndustrial MineralsMalachite Process ConsultingMalachite Process ConsultingMalachite Process ConsultingMalachite Process ConsultingINSG April 2010INSG April 2010INSG April 2010INSG April 2010

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Bruce Wedderburn

April 2010

Malachite Process Consulting INSG April 2010 Heap Leach ...

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