10 Nov 2009 09:54

Jinchuan Group snubbed by BHP in nickle deal

Shanghai. November 10. INTERFAX - Jinchuan Group Ltd., Asia's largest nickel producer, said in a statement on Nov. 9 that it has not been invited by BHP Billiton to participate in the next stage of the Ravensthorpe nickel assets sale, and will focus efforts on its partnership with Metals X Ltd. on the Wingellina nickel project, according to a statement filed by Metals X with the Australian Securities Exchange.

"Jinchuan Group considers that Metals X Ltd.'s Wingellina nickel limonite project represents a much better opportunity to grow its global business with a superior uncomplicated orebody with simple metallurgy. Although remote, Jinchuan Group believes the world-class size and quality of the Wingellina project" will mitigate the inconvenient location, Jinchuan Group said in the statement.

Jinchuan Group is the second largest shareholder in Metals X with a 14.8 percent stake. It has a cooperation agreement to assist with Metals X's project studies, development and potential supplies of concentrate.

The first phase feasibility study on the Wingellina project, completed in mid 2008, showed the potential to build a nickel and cobalt operation capable of annually producing 40,000 tons of nickel metal content and 3,500 tons of cobalt metal content, with an initial mine lifespan of 40 years.

According to the statement, Metals X is continuing to consult with its major shareholders, Jinchuan Group and APAC Resources Ltd., and is seeking funding opportunities for the development of the Wingellina project.

The Ravensthorpe project started production in 2007 and fell victim to plunging nickel prices in late 2008, during the global financial crisis. It suspended production in January 2009.

There is speculation that Minara Resources Ltd. and China Metallurgical Group Corp. (MCC) are among the companies interested in the Ravensthorpe project acquisition. -GD