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The US$2.1bn Ramu nickel project near Madang, on the north coast of PNG, is one of the largest and most ambitious mining and processing projects to have been successfully brought into production in PNG during the past decade. Construction was largely completed by 2012 and the plant has since been progressively brought into production.
The production figures until the end of 2015 are shown in the table below, demonstrating the consistent improvement in operating performance.
|Ore Processed (dry kilotonnes)||647||1,253||2,273||2,784||3,400|
|MHP Produced (dry tonnes)||13,777||29,736||57,360||65,286||78,000|
|Contained Nickel (tonnes)||5,283||11,369||20,987||25,582||31,150|
|Contained Cobalt (tonnes)||469||1,013||2,134||2,505||3,300|
|% Nameplate Capacity||17%||36%||67%||82%||100%|
|MHP Shipped (dry tonnes)||576||39,472||57,216||53,291||78,000|
|Contained Nickel (tonnes)||217||15,123||21,100||20,747||31,150|
|Contained Nickel (tonnes)||19||1,338||2,164||2,004||3,300|
Location: The Kurumbukari nickel and cobalt laterite mine is connected by a 135km pipeline from the Kurumbukari plateau, to the Basamuk
process plant which is 75km east of the provincial capital of Madang, along the Rai Coast of the Vitiaz Basin.
History: First discovered in 1962, Highlands Gold Limited in 1992 assumed the management of the current joint venture. An intensive period of geological exploration and engineering led to a prefeasibility study and in 1996 the establishment of the Ramu Nickel Joint Venture to prepare a bankable feasibility study. In 2000 the project was granted its Special Mining License and in 2005 Metallurgical Corporation of China Limited (MCC) joined the joint venture and was responsible for financing and construction of the project.
Ownership: The Ramu mine and Basamuk process plant is a joint venture between Highlands (8.56%), the PNG Government and Landowners (6.44%) and MCC Ramu Nico Ltd (85%). MCC holds a 61% interest in MCC Ramu Nico Ltd, with the remaining 39% held by a number of other Chinese entities.
Highlands' interest in the project which will increase to 11.3% at no cost after internal project debt has been repaid from operating cash flow. Highlands also has an option to acquire an additional 9.25% at fair market value which could increase its interest to 20.55%.
Operatorship: MCC is the project’s operator.
Free Carry: The Ramu project debt funding is non-recourse to Highlands with Highlands’ equity interest free carried. As part of the joint venture agreement in place for Ramu, Highlands was entitled to choose the date when it wished to access operating cash surpluses being generated by the project, effectively isolating it from losses during the commissioning phase.
With Ramu having achieved an operating cash surplus in 2014, Highlands made a decision in early 2015 to begin participating, enabling it to begin receiving its pro-rata share of operating surpluses, with the first cashflows to be distributed in June. Of those funds, 80% initially will be applied to repay Highland's share of Ramu capital costs of $1.010 billion (Highlands' share approximately US$86 million). The remaining 20% will be available to Highlands for its own purposes. Based on a forecast nickel price of approximately $20,000/tonne, it is anticipated that Highlands will have repaid its share of the capped project capital by 2025, at which point its share in the project will increase to 11.3% at no cost.
Mining and Beneficiation Plant: The Kurumbukari nickel deposit is a low strip ratio, free digging open pit mine. Face shovels and backhoe configured excavators mine the average 12 metre thick ore-body and load into trucks for delivery to the beneficiation plant. The plant removes the chromite and creates a correctly sized and consistent slurry feed for overland pipeline transport to the Basamuk process plant.
Slurry Pipeline: A 135km slurry pipeline runs from the Kurumbukari mine/beneficiation plant to the Basamuk refinery, with a drop in elevation of about 680m. The majority of the pipeline has been buried and has road access for ease of checking and maintenance.
Basamuk Process Plant: The Basamuk process plant incorporates three High Pressure Acid Leach (HPAL) trains (autoclaves) and is designed to produce 78,000 tonnes (dry) of mixed hydroxide product containing 31,150 tonnes of nickel and 3,300 tonnes of cobalt per annum. The plant has a two train acid making facility as well as a limestone processing plant for making the key reagents used in the making of the mixed hydroxide product.
Exports and Sales: Since production started in 2012 mixed nickel cobalt hydroxide intermediate product has been exported to China where contracts are in place to receive the product. Up until the end of 2014 a total of 36,440 t of nickel and 3,521 t of cobalt in an intermediate form has been sold.
Environment and Deep Sea Tailings: Based on advice from international experts received during the study and permitting stages it was decided to dispose of the tailings from the operation into the 1500 metre deep sea canyons as this represented the most appropriate and safe method of disposal. Reasons for this decision include the fact that the area has among the highest rainfalls in the region and land based tailing storage could be disturbed in a highly active volcanic and high-rainfall region while impinging on agriculture and landholder customary land.
For more information on Ramu review the website - www.ramunico.com
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