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LionOre to win tax breaks for Tati Posted: Thu, 13 Jul 2006 [miningmx.com] -- LIONORE Mining International had won “significant” tax breaks from the Botswana government that would offset a chunky increase in the capital cost of its Tati Nickel expansion, executive director Peter Breese said. “The capital cost is going up and I’d describe it as significant,” said Breese who manages LionOre’s African operations. However, unsigned agreements with Botswana’s mines ministry resulted in a significant “fiscal breaks”, he said. The cost of the Tati expansion had been estimated at $350m. LionOre’s board is scheduled to meet on August 3 where it could approve the expansion of Tati. If approved, Tati will increase nickel output to 25,000 tons/year by 2009 from the 13,750 tons of nickel produced in the 2006 financial year. LionOre has said it could nearly triple total group nickel output to between 80,000 tons to 90,000 tons/year by 2011 by using Activox, patented technology that enables the company to treat lower grade ore bodies. Internal company estimates suggest a nickel supply deficit of 400,000 tons could develop by 2015. Installing technology to produce platinum group metals (mostly palladium), and the $70m development of a dense media separation (DMS) plant, also increased the cost of the Tati expansion from initial estimates of about $225m. The DMS project lifts the recovery grade that Tati mines in Botswana. Activox is a form of hydrometallurgy that may slice up to three quarters off the capital cost of conventional pyrometallic smelters, estimated at about $1bn, according to LionOre’s research. As a result of its economic benefits, LionOre had identified the commercialisation of Activox as a major strategic thrust. Albidon, a nickel producer also working in Botswana, said it could treat its nickel concentrate through Activox but Breese said discussions had foundered. “Albidon wanted an offtake agreement, but we preferred a pool and share in which LionOre would take an economic interest in Albidon’s mine, Munali. I think discussions will end there,” he said. LionOre’s Activox was also named by Ridge Mining, a platinum producer listed in London, as a potential alternative to traditional smelting and refining. Discussions had not taken place between the two companies, Breese said. Last week, LionOre said it would proceed with chrome production at the Nkomati Nickel mine in South Africa. The chrome resource overlaid nickel that the company is attempting to access. But in a new development, LionOre said it expected to unveil plans to mine copper, cobalt, platinum group metals and nickel from the same venture. “This should be announced in a few weeks. It will increase the resource base of Nkomati Nickel,” said Breese. LionOre shares Nkomati Nickel with African Rainbow Minerals, a Johannesburg-listed empowerment company.
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