Mincor Resources has finalised its offtake agreement with BHP Billiton Nickel West, marking a major step towards restarting nickel sulphide mining in the Kambalda district of Western Australia.
The agreement provides Mincor the right to process up to 600,000 tonnes a year of nickel sulphide ore at BHP’s Kambalda nickel concentrator.
Nickel concentrate produced will be sold to BHP Nickel West for further downstream processing at the Kalgoorlie nickel smelter and Kwinana nickel refinery.
The deal which was initially signed in March, replaces the historical 20-year agreement that expired between Mincor and BHP Nickel West in February this year.
The agreement aligns Mincor with BHP’s recent commitment to develop its nickel sulphide business to capture growth in battery markets.
Mincor’s managing director David Southam said the signing of a long-term agreement with BHP Nickel West was a significant milestone for the company’s shareholders, for the Kambalda region and for the broader revival of the nickel industry in Western Australia.
“We are delighted to have established a long-term partnership with a Tier 1 counterparty who shares our view of the battery market,” he said.
“Both our teams have taken the necessary time to complete what will be a long-term agreement that we believe will stand the test of time and underpin the future of the Kambalda nickel sulphide region.”
Mincor, alongside a growing number of industry participants, has revealed it believes in the potential generational change for nickel contained in battery technology, specifically for electric vehicles and electrical storage solutions.
“With hundreds of billion of dollars earmarked for investment in the battery industry over the next decade, I believe Mincor’s timing could not be better as we head into a development phase, given the dynamic shift in forecasted nickel consumption over the coming years,” Southam said.
“At the same time, the stainless steel market, which accounts for around 70 per cent of today’s consumption is forecast to continue to grow strongly, especially in the nickel content rich 300 series market.”
Southam said that given Mincor’s plans for success, capital works decision will be made for its key production hubs during the year, which could include a box cut and decline commencement at Cassini, underground development at Long and Durkin North, site infrastructure investments and other operational readiness activities.