Partners
Paris’ High Court of Justice has ruled that the partners have met all of the conditions set out under the Bercy Accord, which was signed in 1998 and governs the transfer of Koniambo’s ownership from the state to Falco and SMSP. The accord included two key conditions: completion of a feasibility study and the placement of orders for at least US$100 million worth of equipment and services before Jan. 1, 2006.
The partners completed a feasibility study in June 2005, while the government recently confirmed satisfaction of the second provision, paving the way for the transfer.
The government’s decree also follows Falconbridge’s recent decision to solely fund the US$2.2-billion project near Kone in the territory’s Northern province. That hefty investment will be repaid out of cash flow from the operation prior to distributions to shareholders.
The transfer of Koniambo to the partners also withstood a late appeal by French rival
Under the accord, state-owned Eramet was required to relinquish Koniambo in exchange for a smaller deposit at Poum plus around US$1 billion. The deal was also designed to placate New Caledonia’s pro-independence Northern province. The agreement provided for the return of Konaimbo to Eramet if the conditions were not met by the end of 2005.
“We are pleased to have resolved this legal challenge and to have satisfied both conditions of the Bercy Accord. Today’s announcement allows Falconbridge and SMSP’s joint-venture company to receive ownership of Koniambo,” said Falconbridge president Aaron Regent in a statement. “We can now look forward to advancing this world-class resource to the next phase of development.”
Plans at Koniambo call for a 60,000-tonne-per-year nickel-in-ferronickel mining and smelting complex, with operating costs projected at US$1.65 per lb. The estimated price tag includes a US$600-million, 390-MW power station, metallurgical plant and costs for mine development and infrastructure, including a port and roads. It excludes US$500 million for working capital and various financing, interest and contingency costs.
The project centres on measured and indicated resources totalling 142.1 million tonnes running 2.13% nickel, based on a cutoff grade of 1.5% nickel. At a 2% cutoff, the resource amounts to 75.6 million tonnes at 2.47% nickel.
If all goes as planned, the giant project could start up as early as 2009.
New Caledonia is also home to
In April, Japanese metal producers
Goro, near the southeast tip of the 500-km-long island, is expected to yield 60,000 tonnes nickel and 4,300-5,000 tonnes cobalt annually, beginning in September 2007.
Inco retains a 69% stake in Goro, with the three provinces of New Caledonia owning the remainder.
Inco recently extended its $12.5-billion friendly takeover offer for Falconbridge by more than a month to Jan. 27 to give it more time to line up all of the required regulatory approvals. Both companies are continuing to work with competition authorities in Europe and Canada, and with the U.S. Department of Justice in connection with the merger, says Inco.
The extension could also provide time for Swiss-based miner
Xstrata originally acquired a 19.9% stake in Falconbridge from
Following transfer of the ownership, Koniambo will be held 49% by Falconbridge and 51% by SMSP. The duo plan detailed engineering work in 2006. Pending permitting and financing, construction could begin in 2007, with startup to follow in 2009.
Be the first to comment on "Falco ponies up from Koniambo"