OM Group grabs Cawse

Cleveland, Ohio-based OM Group (OMG-N) has acquired the mineral rights and chemical processing capabilities of the Cawse nickel-cobalt laterite operation in Western Australia.

Details of the transaction were not released.

Output from Cawse will be used to supply 8,000 tonnes of feedstock annually to OMG’s nickel refinery and 800 tonnes annually to its cobalt refinery.The Cawse nickel project, 50 km northwest of Kalgoorlie, generally has been seen as the relative success story among the three Australian laterite producers. The project hosts resources of 248 million tonnes grading 0.7% nickel and 0.04% cobalt, started production in late 1998 but didn’t show positive cash flow until August 1999 and didn’t reach design capacity until May of last year.

The project was put on the block in March after Australia’s Centaur Mining (CTRL-Q) appointed administrators after it became clear it did not have enough money to service $225 million in high-yield U.S. bondholder debt.

During the last three months of 2000, Cawse turned out 1,401 tonnes nickel and 186 tonnes cobalt. In all of 2000, Cawse produced 6,639 tonnes nickel and 998 tonnes cobalt, running at about three-quarters of forecast production levels even as it put 450,000 tonnes of ore — 90% of capacity — through the autoclaves. Nickel recoveries have been in the 85-90% range, and cobalt recoveries, slightly more than 90%.

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