| Ravensthorpe Nickel Mine | |
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The mine, as seen from the South Coast Hwy. |
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| Location | |
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Ravensthorpe Nickel Mine
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| Location | Ravensthorpe |
| State | Western Australia |
| Country | Australia |
| Owner | |
| Company | First Quantum Minerals |
| Website | First Quantum website |
| Year of acquisition | 2010 |
| TSX LSE |
FM FQM |
| Production | |
| Products | Nickel Cobalt |
| History | |
| Opened | 2008 |
| Closed | 2009 |
The Ravensthorpe Nickel Mine is a nickel mine located 33 km east of Ravensthorpe, Western Australia.
Ravensthorpe cost BHP Billiton US$2.2 billion to build but led to $3.6 billion in write-downs when it was shut down in January 2009, after less than a year of operation. The closure caused considerable bad publicity for the owner, prompting the operation to be placed on the market.[1] The mine was sold in December 2009 to First Quantum Minerals for US$340 million.[2]
Contents |
Mining in Ravensthorpe considerably predates the current nickel mine, with gold discoveries dating back to 1898. The town experienced a down turn after the First World War but mining for copper continued up until the 1970s.[3] A railway line connected Ravensthorpe with the port of Hopetoun from 1901 to 1925, when the line was closed.[4]
BHP Billiton commenced a feasibility study in 2002 into opening a nickel and cobalt mine and processing plant at the cost of A$1.4 billion[5] 35 km East of the town.
The project was approved in 2004 and construction commenced shortly afterward. The plant known as the Ravensthorpe Nickel Project was commissioned in late 2007 with first production occurring in October and the first 5,000 tonnes being produced by December 2007.[6] The plant was officially opened in 2008, after massive cost blow outs and delays. Production was expected to total 50,000 tonnes of nickel per year.[7]
In January 2009, BHP Billiton announced that it was suspending production at the Ravensthorpe nickel mine indefinitely, due the reduction in world nickel prices caused by the global economic crisis. The decision cut 1,800 jobs and was expected to have a major impact on the local economy.[8] Nickel prices, having reached a high of US$50,000 per tonne in May 2007, had fallen to under $11,000 per tonne by the time of the mines closure.[9] The closure had a devastating effect on the local communities of Ravensthorpe and Hopetoun and led to BHP Billiton being heavily criticised for its handling of the closure.[10]
On 9 December 2009, BHP sold the operation to Vancouver-based First Quantum Minerals for US$340 million. First Quantum was one of three bidders for the mine and actually produced the lowest offer. The Canadian company plans to have the mine back in production in mid-2011 by investing US$125 million in the operations. First Quantum won the bid despite offers from Minara Resources at US$360 million and Poseidon Nickel at US$400 million being higher than theirs.[2] BHP Billiton said that the lower price was accepted due to fewer conditions being imposed by the tenderer. The sale of the mine was subject to approval of the Australian Foreign Investment Review Board and the Western Australian government.[11] First Quantum announced the completion of the acquisition on 10 February 2010.[12]
First Quantum expects an annual production of 39,000 tonnes of nickel for the first five years of production and an average of 28,000 tonnes per year for the mine's projected lifetime of 32 years.[11]
Ravensthorpe, while in operation, was part of BHP's Nickel West operations, which included, apart from Ravensthorpe, the Mount Keith Nickel Mine, Leinster Nickel Mine, the Kambalda Nickel Concentrator, the Kalgoorlie Nickel Smelter and the Kwinana Nickel Refinery.[13] Production figures published by the company at the end of 2008 are for the whole Nickel West Operations and not broken down to individual mines. In the calendar year 2008, when Ravensthorpe was active, Nickel West produced 85,800 tonnes of nickel.[14]