Falconbridge eyes increases in nickel, copper reserves

The lowest cash-cost nickel and ferronickel producer in the Western world, Falconbridge (TSE), is gearing up to add significantly to its inventory of nickel and other metals.

President Frank Pickard told the annual meeting in Toronto that the Raglan project in northern Quebec “could increase our total nickel from Falconbridge ores by 56%” and that the huge Collahuasi project in northern Chile, where the company is increasing its interest to 50%, “would boost Falconbridge’s total mined copper production at 1994 levels by more than 135%.” Raglan is expected to operate with a cash cost well below US$2 per lb., Pickard said, and produce some 130,000 tonnes of nickel-copper concentrate grading 16% nickel and 4% copper per year. The company plans to spend $486 million between now and 1998 on development. The concentrate, milled on site, will be transported by ship and rail to Sudbury, Ont., for smelting, with the matte then going to Norway for refining.

A production decision for Collahuasi is expected in the near future. Almost 2 billion tonnes of material grading 0.9% copper, to a depth of 600 metres, has been outlined. Annual output of 300,000 tonnes of copper in concentrate, plus 50,000 tonnes of copper in cathode, is envisaged. Falconbridge and project partner Minorco are buying out the third Collahuasi partner, Shell.

Falconbridge is also planning to bring the Lockerby mine in Sudbury back into production by 1998; the mine was closed in June, 1994, because of high production costs and low nickel prices. It is estimated the project has 10 years of mine life.

Production at Lockerby will resume in December. Output for 1996 is expected to total 3,000 tonnes nickel and 2,000 tonnes copper, with full annual production of 8,000 tonnes nickel and 3,500 tonnes copper reached by 1998.

“With the strong worldwide demand we’re experiencing for nickel, which we expect will continue into the next century, and the excess capacity we have at our metallurgical facilities, it makes economic sense to bring the Lockerby mine back into production,” Pickard said.

At the company’s Sudbury operations, the Craig ore-handling system is on schedule for completion in August. Pickard said the system will boost annual nickel capacity from local ores to above the 42,000-tonne level.

At its ferronickel operation in the Dominican Republic, the company plans to test a laterite upgrading process which, it is hoped, will lower mining cutoff grades to below 1.4% nickel.

Falconbridge has budgeted exploration expenditures of $37.6 million, up from $30.5 million last year.

While Falconbridge is known as a nickel producer, 56% of the company’s revenues in 1994 came from other metals, mainly copper, zinc and cobalt.

The company recorded first-quarter net earnings of $96.5 million, compared with a consolidated loss of $7.6 million for the same 3-month period in 1994.

The annual meeting was the first for the company since 1989, when it was taken private by Noranda (TSE) and Trelleborg AB of Sweden. Falconbridge became a publicly listed company again in 1994. Currently, Noranda has a 46.4% interest and Trelleborg, 28.3%.