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Zambia to restart nickel mine

Reuters | Fri, 12 Jun 2009 16:50
[miningmx.com] -- Zambia plans to re-open the Munali nickel mine within the next month after the operation was suspended in March due to low nickel prices, the mines minister of the southern African country said on Friday.

Maxwell Mwale told Reuters the mine, Zambia's sole nickel operation, would be re-started by China's Jinchuan Group Ltd, the country's largest producer of nickel.

"Within the next one month they should be on course ... as I was leaving (Zambia) they had already agreed on the scheme of arrangements," Mwale told Reuters in an interview on the sidelines of the World Economic Forum for Africa in Cape Town.

At the time of its closure, the underground mine was owned by Africa-focused miner Albidon Ltd, through its subsidiary, Albidon Zambia Ltd.

Mwale said Jinchuan, a minority shareholder in Albidon would take over the operation after increasing its stake in the struggling Australian miner.

Prior to the shutdown of the mine, Jinchuan had a life-of-mine off-take agreement with Albidon.

"I think they had a 20 percent shareholding and now they want to increase it, I think to about 80 percent," Mwale said.

At full capacity the mine, which came onstream last May, was expected to produce about 10,500 tonnes per year of nickel.

By the time the mine was suspended, nickel prices on the London Metal Exchange dropped about more than 80 percent to below $10,000 a tonne from a record high of $51,800 a tonne in May 2007 as demand from stainless steel producers had slumped due to the global downturn. Prices have since ticked up.




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