Send this article to a friend
Print this page

» Impala mulls $2.25bn nickel venture

» JSE:IMPALA PLATINUM HOLDINGS LIMITED:
9615c 0%

Implats may quit $2bn nickel project
Allan Seccombe
Posted: Mon, 28 Nov 2005

[miningmx.com] -- IMPALA Platinum might pull out of the Ambatovy Nickel project in Madagascar it agreed to set up with TSX-listed Dynatec Corporation just six months ago, the Canadian miner said on Monday.

“Following a meeting of the Board of Directors of Impala Platinum (Implats), Implats has advised that it has determined that the benefits to Implats which it had initially anticipated from the project do not now appear to be achievable,” Dynatec said in a statement posted on its website.

“Dynatec, Sumitomo Corporation and Implats will be meeting on Wednesday to discuss Implats' intention to exit the project,” it said.

“At present, neither Dynatec nor Sumitomo have received a formal notice of withdrawal from Implats as required under the recently completed Ambatovy shareholders agreement,” the statement added.
Meeting on Wednesday to discuss Implats' intention to exit the project
On May 26 this year, Impala and Dynatec issued a statement saying they would join forces to tackle the 60,000 tonnes per annum (tpa) nickel and 5,600 tpa cobalt project, which, according to a feasibility study Dynatec released in February, would cost $2.25bn.

The project would have a 27-year life of mine.

A refinery would be built in Springs, near Johannesburg, tapping into Implats’ experiences in dealing with the metal through its platinum and palladium refining business.

"The capital cost bill, which together with the rising cost of production, appears from the Dynatec announcement, to have caused Implats to have significant second thoughts about going ahead with the project," Hugo Nelson, a fund manager with Coronation, told the Classic FM business radio show.

He said Implats might have taken a more sober view of the nickel price and put it at $4 a pound or less.

"It's going to be a difficult one to make work on that basis," Nelson said.

Dynatec said it would talk to other parties that had expressed interest in the project if Implats pulled out of the project.

“Sumitomo has advised Dynatec that its positive view of the Ambatovy project has not changed,” Dynatec said.