However today the book of nickel sells 7

Mick Davis is a prudent man. Many observers feared that the very discrete pattern of Xstrata hesitates to give his agreement to the continuation of the giant project for construction of a mining and smelting of nickel complex in Koniambo, in the North province of New Caledonia. Its estimates of costs always higher had imposed on the team of Ian Pearce, Xstrata Nickel and former head of Falconbridge operations manager, Canadian society absorbed end 2006 by Xstrata, which owned 49 of the project, to revise its copy in an attempt to reduce the invoice.

Only partially successful attempt, because the investments that Xstrata must consent ranged between 3.1 and 3.3 billion for a total cost of 3.85 billion. However, to the attractiveness of the project, in October 2007, Mick Davis gave the final green light. Other stakeholders endorsed part of the costs. Société Minière of the South Pacific (SMSP), presided over by the Caledonian André Dang and linked to the northern province, has promised to contribute at least $ 500 million in funding. "Xstrata is committed to fund the entire project whatever happens," said the "Echos" Dominique Dionne, Vice-President of Xstrata Nickel.

Flow rate of 60,000 tons per year

The SMSP owns 51 of KNS (Koniambo Nickel SAS), the joint venture that will operate the mine complex. For its part, the French State submits KNS Act Girardin, in the amount of $ 780 million, for a net funding of 223 million in the Koniambo project. Therefore, Xstrata has developed all its weight to make the Koniambo complex reality: beginning of the great work of construction in the fourth quarter of 2007, first production in the second quarter of 2011 and functioning at full capacity before the second quarter of 2013. "Koniambo is the best untapped resource of nickel in the world," certifies Xstrata. The life of the deposit is 25 years for initial throughput as ferronickel of 60,000 tons per year. But the reserves were likely to be extended well beyond the defined limits today, said Xstrata Nickel. And this because of the vast existing resource of saprolite and limonite. At this stage, Xstrata has committed approximately $ 1.5 billion in the project to carry out the work of earthmoving, construction of the camp, infrastructure and the port as well as dredging. "So far, the SMSP responded to all the calls of funds in the amount of commitments", says Dominique Dionne. At this stage, 600 workers, including about 65 of Aboriginal people, work on the site. They will climb up to 4,000 quickly. "Early 2009, major contracts come due", says Dominique Dionne. Nearly 600 engineers and geologists follow closely the implementation of the project in Kuala Lumpur, Malaysia.

Profitable project

The mining complex does not fear the fall of the price of nickel. With its cash average cost of the book of nickel at slightly more than 2 dollars, the project begins to generate profits at a market price of long term of 4.60 dollars a pound. However, today, the book of nickel sells 7.50 $ $. Moreover, Xstrata Nickel must decide soon whether he will proceed to the study of feasibility of the Kabanga project in Tanzania. Project he shared with the world leader of gold, Canadian Barrick Gold.