OREANDA-NEWS. On September 26, 2007 African Rainbow Minerals Limited (ARM) and Norilsk Nickel, 50:50 JV owners of the Nkomati Nickel Mine in the Mpumalanga Province in South Africa, announced the approval of a R3,2 billion ($445 million) Phase 2 Large Scale Mining Expansion to increase average annual nickel production to 20,500 tonnes from 5,500 tonnes and extend the life of mine by 18 years to 2027, reported the press-centre of Norilsk Nickel.

Peter Breese, Chief Executive of Norilsk Nickel International commented: "Approval of the Phase 2 Expansion cements Nkomati's long term future as it unlocks around 1 million tonnes of contained nickel resource and quadruples annual nickel production to 20,500 tonnes. Norilsk Nickel is planning to invest R6 billion (+/-$830 million) in Africa over the next three years to double nickel production and implement the innovative Activox® technology.

The expansion also delivers a powerful boost to the regional Mpumalanga economy through this large direct investment and the creation of new employment opportunities. The recent successful delivery of the Interim Plan on time, within budget and with zero lost time injuries by Nkomati project team bodes well for this project."

ARM Chief Executive Officer, Andr? Wilkens said: "The Phase 2 Large Scale Mining Expansion takes ARM to the next level of becoming a larger producer of nickel, in line with our 2 x 2010 strategy, and at an operational cost which is globally competitive."

The Phase 2 Large Scale Mining Expansion
The Phase 2 Large Scale Mining Expansion will exploit two zones of the large layered polymetallic disseminated sulphide resource, which contains 904,335 tonnes of nickel. The first is the Main Mineralised Zone (MMZ) which is currently being mined by the Interim Phase through underground and open pit mining. This is overlayed by the Peridotite Chromititic Mineralised Zone (PCMZ) which will be mined by open pit mining. In addition to nickel, by-products of PGMs, chromite, copper and cobalt will also be recovered.

Mining will continue from the underground mine, at the rate of 47,000 tonnes per month (tpm), and the development of two new open-pits, Pits 2 and 3, which will produce 578,000tpm of ore at a steady state of production. The average mill grade for the total project will be in the order of 0,4% nickel, over the life of mine.

The current 100,000tpm concentrator will be upgraded to 250,000tpm to process the PCMZ ore and a new 375,000tpm concentrator for the MMZ will be constructed to give an overall concentrator capacity of 625,000tpm. The mine's related infrastructure will also be upgraded, including construction of two new tailing facilities and an upgrade of the power supply to 80MVA.

Construction will commence in early 2008 and is scheduled to take 24 months from announcement date. Production will be sequenced, targeting initial production ramp up from the MMZ concentrator during the third quarter of 2009, with full production by first quarter 2010, and then initial PCMZ production ramp up targeted during the third quarter of 2010, with full production by 2011.

Average annual nickel production in concentrate is forecast to be 20,500 tonnes over the 18 year life of mine. By-product production is expected to be 9,000 tpa copper and 110,000 ounces per annum PGMs, predominantly palladium.

The expansion secures 254 jobs and creates an additional 330 new jobs and during construction will employ some 2 000 contractors.

Full report see here: http://www.nornik.ru/en/press/news/2218/