OREANDA-NEWS. June 24, 2010. OJSC MMC Norilsk Nickel (herein after MMC Norilsk Nickel or the Company) looks with optimism at the potential of developing its production assets in Africa (Botswana and RSA). This was announced by Roman Panov, Acting Director of International Assets Department at MMC Norilsk Nickel, at the business forum "Russia - Africa: cooperation horizons", reported the press-centre of Norilsk Nickel.

Speaking about Nkomati project, Roman Panov underlined its importance as a major investment project being implemented in South Africa jointly with the South-African company African Rainbow Metals (ARM). MMC Norilsk Nickel invested more than USD200 million in this project.

The project envisages production expansion through open-pit mining of larger amounts of disseminated sulphide ore, which includes development of two zones of polymetallic mineralization containing over 900 kt of nickel. Along with nickel, a number of by-metals will be produced here including copper, cobalt, chrome and PMG.

The new concentrator with annual capacity of 4.5 million tons of copper-nickel ore is in the final stage of construction. First concentrate was produced in September 2009. Next step would be increasing the capacity of the existing concentrator from 1.2 to 3 million tons per annum.

In 2011 both concentrators should reach their projected monthly capacity of 625 thousand tons of ore.

Projected 2010 production at Nkomati:

8.1 thousand tons of Ni in concentrate and
3.9 thousand tons of Cu in concentrate.

Total production of nickel in concentrate at both Tati and Nkomati in Q1 2010 was in line with production plans and reached 4.4 thousand tons.

In his speech, Mr. Panov emphasized that in Botswana the Company implements a unique project (Tati Nickel), where nickel concentrate will be produced from low-grade ore (@ 0.1% Ni) using a new process flow sheet with an integrated pre-concentration unit.

Overall 10.7 million tons of ore were mined from Phoenix open pit in 2009.

6.9 million tons of ore were processed by the Dense Media Separation (DMS) plant commissioned in the end of 2008. By 2009 year-end the rate of capacity utilization reached 87%. Overall nickel recovery at the concentration plant reached 88.6%. The total of 363 thousand tons of concentrate with average nickel grade of 5.4% was produced at the plant in 2009.

Tati Nickel’s capital investments reached USD30 million in 2009. The Company is actively expanding the project’s resource base: target areas for exploration were identified and licenses for these areas were obtained.

Projected 2010 production at Tati Nickel:

18.5 thousand tons of Ni in concentrate

20.4 thousand tons of Cu in concentrate

3 tons of PMG

INFORMATION ABOUT THE COMPANY’S AFRICAN ASSETS

REPUBLIC OF BOTSWANA

Norilsk Nickel Group owns the following assets located in Botswana: Tati Nickel project (sulphide nickel ore extraction), Activox demonstration plant (processing of sulphide nickel concentrates), and minority interest in BCL smelter.

TATI NICKEL PROJECT
The Group owns 85% stake in Tati Nickel (the remaining 15% belong to the government of Botswana). The project includes Phoenix open pit, Selkirk underground mine, Dense Media Separation plant (DMS) and ore processing mill.

Proven ore reserves of Phoenix mine amount to 111.8Mt @ 0.22% Ni (245.6 kt of contained nickel), and probable ore resources reach 201.9 Mt @ 0.21% Ni (414 kt of contained nickel). For Selkirk mine, proven ore reserves were estimated at 130 Mt @ 0.19% Ni (247 kt of contained nickel), and probable resources at  234.1 Mt @ 0.19% Ni  (462 kt of contained nickel).

To extend the life of mines and expand the existing resource base, Dense Media Separation plant with annual capacity of 12 Mt of ore was constructed at Tati.  Nickel recovery in metal at the DMS plant is 80%.

Tati concentrates (340 ktpa @ 5.5% Ni) are toll treated at the BCL smelter.

BCL
The Company owns 6% of BCL shares; other 94% are owned by the government of Botswana. Operations include smelting plant with annual capacity of 950 kt of concentrates, three mines, and ore processing plant producing 470 kt of concentrates @ 2.9% Ni. BCL smelter feed consists of concentrates from its own mines, from Nkomati in South Africa and Tati Nickel.

SOUTH AFRICA
MMC Norilsk Nickel owns a 50% stake in Nkomati Nickel Mine (Nkomati), a JV with a South African company African Rainbow Minerals.

Nkomati Project
Nkomati project includes an underground mine and an open pit where copper-nickel ores are mined, and a concentrator with capacity of 1.2 million tons per annum. Chrome ore is also mined, crushed and screened at Nkomati.

Nkomati deposit is a sulphide mineralization containing nickel, copper, cobalt and PMG.

Nkomati proven ore reserves amount to 159 Mt containing over 500 kt of nickel, 200kt of copper, and 150 tons of PMG.

Two types of ore were identified at Nkomati: relatively rich ore with nickel content of 0.42% (73 Mt) and low-grade ore with nickel content 0.16% - 0.23% (86 Mt). Current annual output is about 200 kt of nickel concentrate.