Nickel West’s Kambalda concentrator back in action with Mincor

BHP Nickel West’s idled Kambalda concentrator has sprung back to life after processing the first parcel of ore from Mincor’s restarted nickel operations in the area.

The news marks the first processing operations at the refurbished BHP facility since it was placed on care and maintenance in 2018 after IGO closed its Long nickel mine.

For Mincor, the restart achieves its target of delivering first nickel concentrate this quarter and first cashflow from next month under an offtake agreement with Nickel West.

It also marks its return to the ranks of Australia’s nickel producers after a six-year hiatus.

Nickel West asset president Jessica Farrell noted BHP had a long association with Mincor dating back to 2004 when the company first began delivering ore to the Kambalda concentrator.

She said the restart of the concentrator would provide an additional 40 jobs in the region, including new to industry and trainee opportunities.

Mincor’s managing director David Southam said the successful re-commissioning of the concentrator — which was completed on time and to an exceptional standard — was a significant milestone for both companies and a significant boost for the region.

The company’s ore deliveries to the end of May will be converted into an imputed nickel-in-concentrate, using a grade-recovery curve, thereby meeting its commitment to shareholders of delivering first production in the June quarter.

Mincor shuttered its Kambalda operations in 2016 after a sustained downturn in prices for the commodity which was then used predominantly in steel making.

Since then, the metal’s fortunes have turned on the back of its growing use in the batteries of electric vehicles.

As well as the restart of its historic northern operations near Kambalda, Mincor has also opened a new greenfields underground mining operation at Cassini near Widgiemooltha.

RBC Capital Markets analyst Paul Wiggers de Vries described the restart of the Kambalda concentrator as a key de-risking milestone for Mincor.

The bank maintained its outperform rating on the stock with a price target of $2.75.

Mincor is expected to provide full-year 2023 production guidance from its restarted operations in September.

Its shares closed down 6¢ at $2.17 on Monday while BHP shares fell 59¢ to $46.21 in a sharply weaker market.