A planned expansion of the Ramu nickel-cobalt mine in Papua New Guinea’s Madang Province is “still definitely on the cards,” according to Craig Lennon, Head of Asia-Pacific for the mine’s joint-venture partner, Nickel 28.
Ore from the Ramu mine is pumped via a 135 km slurry pipeline to the Basamuk refinery, 55 km south-east of Madang town. Credit: MCC
The manager of the Ramu nickel-cobalt mine in PNG’s Madang Province, Ramu NiCo Management, is considering an extension to its special mining lease (SML), which could cost up to US$1 billion (K3.9 billion) and double annual production.
Additionally, its parent company, Metallurgical Corporation of China (MCC), is conducting a study with Kumul Minerals Holdings on collaboration in downstream processing, which it expects to complete by the end of 2024.
Nickel 28 holds an 8.56 per cent interest in the Ramu Nickel Joint Venture (JV), alongside majority owner MCC (85 per cent) and PNG’s Mineral Resources Development Company (MRDC, 6.44 per cent).
The JV partners are about to commence an update to the 2018 technical study to determine whether to expand within the current SML area or incorporate surrounding exploration rights into the mining area.
“Expansion can mean different things,” Craig Lennon, Head of Asia-Pacific for Nickel 28, tells Business Advantage PNG. “It could be that we expand production within the current footprint, or that we expand outside of that.
“If you go outside of that footprint, then that means you have to go through certain regulatory and permitting processes,” he says, noting that it could impact current agreements with third parties while also bringing in new parties.
“PNG has a history of permitting projects, which is great. But not too many projects have tried to do an expansion outside of their footprint.”
Above Nameplate Capacity
Ramu commenced production in 2012 and has been running above its nameplate capacity of 32,600 tonnes of nickel for at least the last seven years, according to Lennon.
In 2023, it produced 33,604 tonnes of nickel and 3,072 tonnes of cobalt contained in mixed hydroxide precipitate. To put this in perspective, Ramu produces just under 1 per cent of the world’s nickel and around 1.3 per cent of its cobalt.
Nickel prices globally are typically volatile, presenting a particular challenge.
“Our production is something we can control – and it is very consistent,” Lennon says. Ensuring tight control of costs is also imperative – the mine is currently undergoing an efficiency program to ensure production levels are maintained.
“The engine’s [over] 10 years old. We’re going to go through some maintenance this year. There are a few ‘debottlenecks’ to address, which we hope will get our production to 35,000 tonnes [of nickel] on an annual basis going forward,” he says.
Long Mine Life
Ramu currently has a measured and indicated resource of 150 million tonnes at average grades of 0.85 per cent nickel and 0.1 per cent cobalt in an area covering just 15 per cent of its total exploration licence.
This will be enough for “decades” of additional mine life, with “plenty” in the surrounding licence areas as well, says Lennon.
Exploration activity has been “huge” this year compared to the previous year, with thousands of metres drilled.
“We’re going to increase that slightly in the next year,” he adds.