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Poseidon to restart mine, target battery materials

31 Jan 2018 13:55 GMT
Poseidon to restart mine, target battery materials

London, 31 January (Argus) — Australian mining company Poseidon Nickel plans to restart its Silver Swan nickel mine in Australia and will target wider expansion into battery metals.

Poseidon is restarting the mine because of renewed interest in key battery materials, such as nickel, lithium and cobalt. The company holds a diversified basket of battery metals, and electric vehicle (EV) battery manufacturers, traders and investors are looking to secure physical positions and invest directly in companies that hold strategic commodities.

Silver Swan has a mine life of two years and will produce 147,000t of nickel ore at a head grade of 5.8pc, resulting in 8,800t of nickel metal, Poseidon estimates.

The company has received all regulatory approvals for the restart of the mine and is in off-take discussions with refining and trading firms.

Poseidon is conducting a feasibility study to restart its Black Swan sulphide concentrator and open pit nickel sulphide ore mine. This would extend Black Swan's mine life by three years.

Black Swan has a reserve of over 20,000t of contained nickel metal. Poseidon will consider delivering high grade nickel ore to third parties.

The company is also considering restarting diamond core drilling at its Abi Rose nickel mine in Australia because of the strong outlook for EV battery demand. A final decision will be made in the second quarter. Poseidon's Windarra nickel project, which has a total nickel reserve of around 150,000t and a 10-year mine life remains under care and maintenance.

Cobalt and lithium production

Poseidon approved a lithium exploration programme in December and is conducting a study into downstream nickel and cobalt processing.

The company will explore the Medusa Lithium Project at Lake Johnston in Australia. Exploration work has confirmed a number of high priority lithium targets where Poseidon plans to complete initial drilling. The Lake Johnston process plant can be used to produce high grade lithium concentrate.

The company has progressed on a collaborative study for downstream processing facilities for nickel and cobalt sulphide concentrates and battery grade chemicals.

It plans to review non-binding agreements that were signed when nickel prices were low now that market conditions have improved.

Poseidon estimates that nickel usage in electric vehicles will total around 500,000 t/yr by 2025, based on analyst's forecasts.

Three-month nickel on the London-based metal exchange LME traded at $13,550/t on 31 January, up from $13,005/t on 24 January.