Nickel miner Western Areas is receiving increased interest in its product from the electric vehicle (EV) battery sector, which is pursuing offtake agreements at two of the company’s growth projects.
The Perth-based company made strong progress on two projects during the first half of the 2018 financial year — the Mill Recovery Enhancement Project (MREP) and the Odysseus project, both in Western Australia.
Western Areas completed construction of the MREP on time and on budget during the half year, while the Odysseus project is now expected to be a larger operation with a longer mine life.
Despite the projects being different, with the MREP using the company’s bacterial processing intellectual property and Odysseus being the development of an underground mine, both are being targeted by the EV sector.
Western areas managing director Dan Lougher said the company continued to field strong interest for nickel concentrates, both from existing operations and Odysseus.
“Based on our market intelligence, we believe there is a global shortage of quality, clean nickel concentrates, which places our company in an enviable position,” Lougher said.
“A significant proportion of offtake interest is derived from parties involved or associated with the production of EV batteries, and, to this end, upon commissioning the MREP, our focus will turn to securing new offtake agreements for this ultra‐premium product.”
The MREP project aims to increase Western Area’s mill recoveries from 3 per cent to 5 per cent over the life of mine, with up to an additional 1400 tonnes to be recovered a year.
At Odysseus, Western Areas plans to release a definitive feasibility study (DFS) this July and expects to deliver a mine life beyond 10 years for the operation.
The company today reported that it is in good financial shape to complete its growth projects over the next year.
Western Areas recorded sales revenues of $115.8 million during the six months, while its earnings before interest, tax, depreciation and amortisation (EBITDA) improved by 26 per cent against the same period a year earlier.