Anaconda narrows focus for Murrin Murrin

Suffering a A$457.5-million loss in the final six months of 2001 and looking to restructure its US$420-million debt with mainly U.S. bondholders, Australian-based laterite nickel miner Anaconda Nickel has agreed to sell Anaconda Industries to fellow Aussie Lynas Corp.

Anaconda Industries is the holding company for Anaconda’s interests in the Mt Weld Tantalum and rare earths deposits in Western Australia.

The price tag to Lynas is A$5 million. The company will also assume contingent debt obligations of $3.75 million and future royalty payments to Australia’s Ashton Mining.

The sale is part of Anaconda’s plan, which began late last year, to focus solely on its nickel operations at Murrin Murrin

Anaconda has struggled since 1999 to get its giant Murrin Murrin laterite nickel plant in Australia operating at capacity. The plant employs Sherritt International‘s technology for extracting nickel from low-grade lateritic ore. The project is well behind the originally estimated startup date of early 2000. Recently, a lightning strike hit power transformers at Murrin Murrin, knocking out the plant and forcing Anaconda to move forward a scheduled 5-day maintenance shutdown.

In October, Murrin Murrin’s principal contractor, Fluor Australia, filed suit in the Supreme Court of Australia against Sherritt and Dynatec (DY-T), which now owns Sherritt’s metallurgical design business. Anaconda Nickel has made claims against Fluor for alleged deficiencies at Murrin Murrin, which are now in arbitration. Fluor’s claim is against Sherritt and Dynatec as designers of the hydrometallurgical system used at Murrin Murrin.