MINING CHRONICLE, September 1997
Final count-down for nickel-cobalt project
By Brian Jenkins
The Murrin Murrin Joint Venture aims to be in production of nickel and cobalt in the September quarter of 1998 and is forging ahead with exploration and development of further extensive ore resources in the Goldfields and Pilbara.
On 12 August, the project's owner, Anaconda Nickel Limited, announced finalisation of its agreements with partner Glencore International AG and completion of arrangements for project finance.
Glencore's Australian subsidiary Glenmurrin Pty Ltd has taken up a 40% interest in Murrin Murrin for US$60m plus a farm-in of US$160m for establishment and development of infrastructure and plant.
Anaconda has also raised $A96.4m from local and overseas placement of new ordinary shares, and obtained a $A110m loan facility with NatWest, bringing its cash and financial resources to over $A200m.
The joint venture's chairman, Mr Andrew Forrest, said "The facility provides a timely arrangement of finance with no capital repayments for 10 years, allowing a significant cash build-up in the early years of the project."
The project is managed by Anaconda subsidiary, Murrin Murrin Operations Pty Ltd (MMO) which has established a strong project team complemented by the contracted technical expertise of project engineers Fluor Daniel and process engineers Sherritt International.
Mr Forrest said that on-site infrastructure including the camp, concrete batching plant and other services had been completed and construction of the processing plant was well under way.
WORLD'S FIFTH LARGEST PRODUCER
In 1993, Anaconda was incorporated as a specialist developer of laterite nickel projects in Australia. Anaconda Nickel is now poised to become a major force in the international nickel market with its first project, Murrin Murrin, which is almost a quarter complete.
Murrin Murrin is the site of the world's fifth largest nickel mine with more than 120 million tonnes of ore to be mined over a 30-year period. It will also be the world's third-biggest cobalt mine, contributing to very favourable overall operating cost outcomes.
Murrin Murrin will annually produce 45,000 tonnes of nickel and 3000 tonnes of cobalt for which ready markets have been found in advance.
Additional reserves of ore in the Goldfields and Pilbara are estimated to range beyond a further 100 million tonnes. Exploration is in full swing at tenements at nearby Marshall Pool, Eucalyptus and Warrawanda. Results to date indicate potential of 50 million tonnes of ore at each location.
Anaconda secured abundant deposits of laterites near Leonora in 1994 and almost immediately commissioned a successful feasibility study. This not only proved the resource but also identified an abundance of neutralizing calcrete and low-salinity water from nearby borefields--an essential element in the Sherritt Inc process which was finally chosen for the plant.
Significant advantages existed in established road and rail infrastructure and the availability of natural gas from the nearby Goldfields Gas Pipeline. Imported sulphur for the process will be landed at Esperance.
The ore is easily accessible using conventional open-cut mining techniques, and has acceptable levels of magnesium--which enables highly efficient processing.
Anaconda will be among the world's lowest-cost nickel producers. Potential for early expansion of the project may lead to further efficiencies in production.
COMMUNITY CO-OPERATION CLEARED HURDLES
The company broke new ground in native title negotiations in Australia by executing agreements with 23 native title claimant groups.
Anaconda's innovative approach resulted in the formation of a Murrin Murrin Foundation, drawing together different Aboriginal communities from the area.
The Murrin Murrin Joint Venture supports the Foundation financially and has given a commitment to employ and train young Aborigines for entry into the company's workforce, and for other employment.
The company also developed its environmental policies in close consultation with the Aboriginal communities.
An environmental study was successfully undertaken and a complete clearance granted by the WA Environmental Protection Authority. Anaconda was nominated for an excellence award.
OUTSTANDING ENGINEERING SUPPORT
The company has selected the international marketing company Glencore International AG as a joint venture partner and has contracted outstanding metallurgical project and development expertise.
Recognized as one of the world's leading engineering procurement and construction companies, Fluor Daniel was appointed to the project in 1996 and has been awarded the full engineering and construction contract.
There are three hundred engineering designers at Fluor Daniel's headquarters in Melbourne. Using new innovative software, plant designs in a 3-dimensional environment are updated daily.
EXTRACTION AND REFINING PROCESSES
The process sequence, adopted under licence from Sherritt Inc, is commercially proven, having been in operation at Moa Bay in Cuba since 1959 and at Fort Saskatchewan in Canada since 1955.
Ore mined at the open pit is trucked and dumped for crushing. It is then conveyed to a pressure acid leaching circuit where the ore is mixed with hot sulphuric acid at 255° C in autoclaves measuring 37 metres long by 4.3 metres in diameter. This stage extracts nickel and cobalt from the clay ore.
Slurry from the autoclaves passes to the first of seven counter-current wash thickeners where soluble nickel and cobalt values are recovered. Then, excess acid is neutralized using locally available calcrete.
The now clean nickel and cobalt solution is reacted with hydrogen sulphide gas to selectively precipitate nickel and cobalt as sulphides.
The mixed nickel/cobalt sulphide is a marketable intermediate product which can be sold to a number of refineries around the world for processing. For economic and strategic reasons, Anaconda has chosen to build a refinery on site at Murrin Murrin.
In the refinery, mixed sulphides are dissolved under pressure to form a solution of nickel and cobalt sulphates. In the solvent extraction section, nickel and cobalt are separated. The result is two streams, one of nickel sulphate solution, the other cobalt sulphate solution.
Cobalt hydrogen reduction follows. The cobalt sulphate solution is mixed with ammonia and reduced in autoclaves. The resultant cobalt powder is washed, filtered and dried. The nickel solution is autoclaved in hydrogen to make the final product, either valuable nickel powder or briquettes.
Then, residual solutions are evaporated, leaving fertilizer-grade ammonium sulphate, which is a saleable product.
The joint venture has appointed Sherritt International to provide the process technology recognized as the best available for this type of ore. A similar circuit has been used by Western Mining Corporation at Kwinana since 1969.
GIANT AUTOCLAVES TAKE SHAPE
At the Australian Submarine Co's engineering arm (ASC-E), fabrication of four giant autoclaves for Murrin Murrin is well under way. These vessels, weighing 600 tonnes, will be the largest titanium-lined autoclaves in the world. Total contract cost is more than $A40m.
The titanium, which is bonded to the heavy steel plate using explosives, arrives at the Adelaide site where it is rolled and welded into cylindrical "cans" which are welded together to form the finished length of the autoclave.
In another workshop, huge caps are welded and prepared for fitting to the autoclaves. The titanium skin will withstand a solution of nickel and cobalt ore and sulphuric acid heated under pressure to a temperature of 250° Celsius.
The titanium skin is sonically tested to prove the integrity of the bond. Steel welds are also sonically tested.
At another ASC site, fabrication of titanium baffles for the interior of the autoclaves is well advanced. The titanium plate is cut to the required shapes under water. The edges are then cleaned in these vanes. Finally in an enclosed and controlled environment, a team of specialist welders joins the titanium components.
VIRTUAL PLANT MODELLING
Design of Murrin Murrin is proceeding at top speed in Fluor Daniel's Melbourne headquarters. Recognized as one of the world's leading engineering, procurement and construction companies, Fluor Daniel was appointed to the project in 1996.
Teams of designers using innovative software called PDS (Pipe Design System) design the plant in a 3-dimensional environment. As design advances and changes are made each day, the data is transferred to a master program called the Design Review Model.
All the work comes together here and this 3-dimensional model can be viewed and reviewed from any angle and height. By the use of such advanced methods, the tasks of engineering and procurement were 50 per cent complete before the first concrete was poured for construction.
TIMING AND COST FACTORS CRUCIAL IN WORLD MARKET
The fortunes of Murrin Murrin nickel production are largely bound up in a world market for the chief end-product, stainless steel.
There is reasonable expectation that world demand for stainless steel will continue expansion recorded in recent decades, and that the Asian market will generate considerable additional production.
Murrin Murrin is racing competitors and is well placed to secure a corner of this business on terms which guarantee viability of its Stage 2 expansion.
In the view of Anaconda Nickel NL, annual demand for nickel should grow from a level of 700,000 tonnes in 1996 to around one million tonnes in the year 2000.
Market price for the metal is currently about US$6610 per tonne (US$3 per lb), having fluctuated from a high of over US$10 per lb in 1989.
Forecast demand is expected to push the price to a high of US$6 per lb before 2000, when strong world supply factors could cause a downturn, e.g., planned large-scale production from the Canadian Voisey's Bay project.
Murrin Murrin's projected output is close to 100 million lb (44,210 tonnes) p.a. at an operating cost of only US$$0.61 per lb after credits for cobalt and other by-products. (Source: Fluor Daniel control estimate, January 1997)
Anaconda's success in gaining strong institutional support and investment follows meticulous planning and selection of associates and bodes well for continued achievement of objectives.
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