African Rainbow Minerals (ARM) has taken an important step towards re-opening the group’s mothballed Nkomati Nickel mine in Mpumalanga through reaching an off-take agreement with Boliden Commercial AB.
According to an ARM statement the transaction “supports the potential recommencement of mining at Nkomati and strengthens the Nkomati restart business case by securing an off-take route for future nickel concentrate production.”
The deal – described as a “conditional nickel concentrate sale agreement” – provides for Nkomati’s nickel concentrate output to be shipped to Boliden’s Harjavalta smelter in Finland which is the only large-scale nickel smelter in Europe.
Nkomati was placed in mothballs in 2021 after making heavy losses forcing ARM to take impairments against the asset. Since then ARM has been evaluating restarting operations at the mine – in particular going underground – as nickel prices have recovered.
Nkomati was originally a 50/50 JV with Russian mining group Norilsk Nickel but ARM bought 100% control of the mine in 2023.
Detailed commercial terms of the off-take agreement have not been disclosed by ARM which has stated only that it provides for the sale of nickel concentrate over a multi-year period.
The agreement is subject to a number of conditions precedent including the completion of a responsible sourcing due diligence by Boliden.
According to ARM this deal “provides Nkomati with a access to a European market increasingly focussed on responsibly-sourced nickel units, supporting ARM’s positioning in the clean energy value chain.”
