China firm to own 51% of Zambia nickel mine

[] — China’s Jinchuan Group will take a stake of about 51% in Zambia’s sole nickel mine Munali, which is due to resume output in September after stopping in March due to low prices, Zambia’s mines minister said.

Maxwell Mwale told Reuters on Wednesday that China’s largest nickel producer would re-start operations by next month once legal issues are sorted out.

Jinchuan officials are in Zambia to inspect the mine.

Mwale had previously said Jinchuan would re-launch Munali in August, and it would own more than 70% of the mine.

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

“The other shareholder’s holding has been diluted. Jinchuan provided loans to Albidon and that has been converted into equity,” Mwale said.

“There are various other institutions in Australia, Europe, the United States of America and South Africa with shares in the mine.”

Munali, located around 60 km south of the capital Lusaka, had plans to produce 10,000 tonnes of nickel per year.

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