Sherritt votes with its chequebook — Makes bid for Aussie nickel producer

Sherritt International (S-T) now owns a stake in the Australian mining industry following its $51-million purchase of a 9% interest in producer Anaconda Nickel.

Citing a “positive outlook for the projects Anaconda has under way,” Sherritt acquired the holding on the open market. The company now holds 12.8 million shares of Anaconda. The Australian firm’s principal asset is the Murrin Murrin laterite nickel-cobalt operation near Laverton, Western Australia.

Murrin Murrin, commissioned on May 7, is slated to produce 45,000 tonnes of nickel and 3,000 tonnes of cobalt annually once it reaches full production. An expansion to increase production to 115,000 tonnes nickel and 8,500 tonnes cobalt has yet to be cleared by regulators. Anaconda anticipates that this phase of the project will be commissioned in 2000.

Sherritt’s involvement with the project arose from Anaconda’s use of the Sherritt acid-leach process for nickel laterite ores. According to Sherritt, the buy-in is a vote of confidence for Anaconda’s Murrin Murrin project, which consists of several deposits.

Overall, the project has a minable reserve of 206 million tonnes. That figure includes 132 million tonnes grading 0.98% nickel and 0.06% cobalt at Murrin Murrin proper and 74 million tonnes grading 0.99% nickel and 0.07% cobalt at Murrin Murrin East. Other resources on the property have not been classified as reserves. At the adjoining Abednego property, a further resource of 75 million tonnes grading 0.97% nickel and 0.06% cobalt has been outlined.

Anaconda’s major shareholder is Glencore International Management, with 19%. At Dec. 31, 1997, the last date for which figures are available, Anaconda had net assets of about $200 million.