September 21, 2017

Norilsk to keep its Botswana subsidiary operational

Norilsk

The Steering Committee of Russian mining major MMC Norilsk Nickel (Norilsk) recently approved the action plan of its Botswana subsidiary, Tati Nickel Mining Company (Tati Nickel). Norilsk owns 85percent of Tati Nickel, the other 15percent belonging to the government of Botswana. The action plan is intended to improve the Southern African operation’s performance at the current nickel price levels. Tati Nickel also produces copper, palladium and platinum as by-products.

Under the action plan, the Botswana mine will maintain its current production levels of nickel in concentrate until 2016, although the nickel grades are low (now averaging less than 0.25percent). It will also cut costs across all operations, including contractor-executed operations, by 10percen. And it will ameliorate sales and logistics conditions.

Tati Nickel management has already started the implementation of the action plan and has achieved some success. Preliminary negotiations with contractors were held with a positive response received. The Botswana Company is engaged in talks to improve the conditions regarding the transport of ore and concentrate to the smelter.

The company is negotiating better payment conditions for processed and delivered products with the processor and the buyers. Expenditures and operating costs are under continuous control.

It is also seeking from government tax incentives, permission to recruit foreign skilled workers and other measures to support its operations. As Norilsk noted, the government of Botswana is also very interested in the work of Tati Nickel. Should the action plan fail, Tati Nickel will have to be reduced to care and maintenance.

To assist Tati Nickel in implementing its action plan, Norilsk last month sent the African operation a seven-strong team from another of its subsidiaries, Gipronickel, on a secondment that lasted just over three weeks.

Gipronickel, which was established in 1934, specialises in nonferrous metal especially, nickel research and development (R&D), design and engineering, mining and concentrating and metallurgy project management, testing methodology and reference specimen certification. It provides Norilsk with its R&D backbone.

Tati Nickel comprises two mines, Selkirk and Phoenix. Selkirk started operations in 1988 and Phoenix in 1995 (Norilsk bought the company in 2007). The two mines are about 15 km apart, and both are roughly 40 km east of Francistown, in the north east of the country.

Selkirk was originally an underground mine, which was put into care and maintenance in late 2002, briefly reactivated in early 2006 before being returned to care and maintenance. There is a plan to redevelop it as an openpit operation. The cost efficiency of the Selkirk deposit development is under appraisal.

Tati Nickel is part of Norilsk Nickel Africa, which also encompasses the Russian group’s 6% share in another Botswana mining company, BCL (which is 94percent-owned by the Botswana government) and its 50percent holding in Nkomati Nickel, a joint venture with African Rainbow Minerals, in South Africa.

 

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