Argyle Diamond Mine, Kimberley, Australia

The Argyle mine, located in the Kimberley region in the far north east of Western Australia, is the world's largest single producer of diamonds. The mine lies some 550km south west of Darwin by air. The region is remote, rugged and hot, with temperatures of over 40°C during the wet season from October to March.

When production began in 1985, most of the workforce was Perth-based and operating on a two-week 'fly-in, fly-out' basis – requiring the construction of a complete camp infrastructure to support the operation. In recent years, however, a programme of localisation has been underway to base workers in East Kimberley.Article Continues

Argyle is operated by the Argyle Diamond Mines Joint Venture, wholly owned by Rio Tinto since 2002. The initial mining lease expired in 2004 and has been renewed; the current open-pit operation is scheduled to conclude in 2008, with underground developments underway to extend the life of the mine to 2018.

GEOLOGY AND RESERVES

The discovery of the Argyle orebody marked the first time that a commercial diamond occurrence had been identified that is not hosted in kimberlite. The AK1 pipe at Argyle instead consists of olivine lamproite, from which diamonds had been eroded to form placer (alluvial) deposits nearby.

The deposit was discovered in 1979 by the Ashton joint venture, following some 12 years of exploration by various companies in the area. The discovery of alluvial diamonds led directly to their source, the AK1 pipe.

At the end of 2005, total measured, indicated and inferred resources in the AK1 pipe were 83Mt at a grade of 2.7ct/t, with a further 28Mt at a grade of 0.2ct/t in residual alluvial material. Proven and probable reserves totalled 111.7Mt grading 2.2ct/t, and containing 247.1Mct.

MINE DEVELOPMENT

Development of Argyle was a two-stage process. Alluvial diamond mining took place between 1983 and 1985, when the AK1 pipe came into production. Since then, this has been the principal source of ore, supported by lesser amounts of alluvial material.

Argyle operates as a conventional open-pit mine, with both lamproite and waste rock being drilled and blasted before being loaded out in a shovel-and-truck operation. The mine operates Bucyrus, P&H and Tamrock Driltech rotary drill rigs, O&K RH 200 hydraulic excavators and a fleet of Caterpillar 789B and Unit Rig MT4400 haul trucks, supported by Caterpillar wheel loaders, bulldozers and other ancillary equipment. The mine operation is monitored and vehicle movements are controlled using Modular Mining Systems' dispatch system, which uses a global positioning system (GPS) for accurate location of drills and other plant. Contract mining is used for the alluvial ores.

Much of the waste rock is highly abrasive quartzite, and Argyle has been a long-term user of the Skega dump body system in its haul truck fleet. This uses a suspended, reinforced rubber liner in place of conventional steel plating in the hauler body.

ORE PROCESSING

Argyle's processing plant uses a crushing, screening, heavy-medium separation (HMS) and X-ray sorter diamond recovery flowsheet. 3mm ore forms the feed for the heavy-medium separation circuit while -1mm material is rejected to the plant tailings.

Two-stage heavy medium cyclones with a specific gravity of 3.0 form the heart of the separation process, with material denser than the cut point forming the diamond-bearing concentrate. X-ray sorting separates the diamonds from residual waste in the HMS concentrate, the recovered stones being acid washed before sorting for shipment.

PRODUCTION

Since coming into operation, Argyle has produced over 670Mct of diamonds, with an average stripping ratio in the open pit of around 7t of waste being moved for each tonne of ore mined. Peak production was in 1994, at 42.8Mct. The pit is now so deep that the lack of manoeuvrability in the bottom has come to hinder mining operations.

In 2005, the mine processed 9.0Mt of lamproite ore to recover a total of 30.5Mct, its output having virtually regained the level achieved in 2003. 2004 production was markedly lower, with lower-grade and stockpiled ores being processed. In 2006, the operation treated 8.4Mt of ore to recover 29.1Mct. Argyle's production consists of 5% gem and 70% near-gem stones, with the remaining 25% being industrial diamonds. The mine also produces between 90% and 95% of the world's pink diamonds.

THE FUTURE

With the AK1 open pit scheduled to cease production in 2008, since by this time a point will have been reached where the lamproite 'pipe' narrows and continues at greater depth, making continued access to the ore by open methods uneconomic. Back in 2001, the company began looking at the option of developing an underground mine – launching a pre-feasibility study to investigate all of the possible alternatives and transition strategies.

The results of this led, in early 2003, to the approval of funding for a full feasibility study for a block cave underground mine and the construction of an exploratory decline. Both were completed during 2005 and in December of that year the decision was made to go ahead with the underground mine.

Work on the A$1.6bn development began on schedule and production from the new mine should begin in mid-2009; a low-grade open pit expansion is also planned which will help extend productive mine life until 2018.

Production capacity is predicted to average around 20Mct/y, compared with the current long-term average of 34Mct/y – and the high costs of the redevelopment have led some in the industry to speculate that the mine might ultimately be put up for sale.

In addition to the shift to underground working, the company is also in the process of localising most of its workforce in East Kimberley, aiming to have 80% based there by 2010 – and half of them Aboriginal. This forms part of major corporate step-change, described as 'reassessing Argyle's relationship to the area in which it mines'.

Samancor Chrome Mines, South Africa

With low electricity prices, South Africa has been able to expand chromite and ferrochrome production more or less continuously since the AOD process was developed in the 1960s to use ferrochrome smelted from lower-grade ores. Samancor was created in 1975 and its Chrome Division grew, mainly by acquisition, to become the world's largest integrated ferrochrome producer and South Africa's leading exporter of chemical-grade chromite and foundry sand.

Until June 2005, Samancor was owned by BHP Billiton and Anglo American plc, at which time the two companies sold the bulk of Samancor Chrome’s wholly-owned interests to the Kermas Group. Xstrata and the Black Economic Empowerment company, Merafe, took over Samancor's stake in Wonderkop and certain chromite resources. In 2006, Kermas South Africa sold a 28% equity interest in Samancor Chrome to a Black Economic Empowerment consortium, Batho Barena.

Innovations introduced by Samancor have included direct chromite reduction and DC smelting. Samancor Chrome has subsequently streamlined its mine management while upgrading its smelters and improving non-metallurgical concentrates production. To stabilise ferrochrome capacity utilisation, Samancor Chrome formed export production joint ventures with Far Eastern customers and a joint venture with local competitor Xstrata to build two new furnaces at the latter's Wonderkop smelter.

Samancor Chrome now provides employment for 5,500 people at two mines, three production plants and the corporate head office in Johannesburg.

GEOLOGY AND RESERVES

Samancor’s operations are centred on reserves held in the Bushveld layered intrusive complex, which contains approximately 70% of the world’s economic chrome ore reserves in the Lower Group (LG) 6 and Middle Group (MG) 1 seams. LG6 has a Cr2O3 content of 43-47% and a Cr:Fe ratio of 1.6:1, while MG1 averages 42% Cr2O3 and a Cr:Fe ratio of 1.5:1. LG6 is typically 1.1m thick and MG1 1.4m, both dipping gently.

At end-June 2002, Samancor's proven reserves totalled 16.6Mt grading 42.4% Cr2O3 with probable reserves of 23.4Mt. Total resources are estimated to be sufficient for 200 years mining at current rates.

MINING

Samancor has two mining centres: Eastern Chrome Mines (ECM) in the Steelport area of Mpumalanga Province and Western Chrome Mines (WCM) near Rustenberg and Brits in Northwest Province. Both units now comprise three underground mining areas, each with a hoisting shaft, while WCM also includes an open-cut mine. Overall capacity is approximately 5.8Mt/y of run-of-mine ore.

Underground, Samancor relies mainly on room-and-pillar mining, typically with low-angle adits connecting to a horizontal access level. Thin seams limit the scope for mechanisation and blasting relies on drilling with hand-held pneumatic jackleg units. The ore is mined either up-dip or down-dip in rooms approximately 20m wide, with the roof supported by ore pillars. Scrapers haul chromite to ore passes that load trains on the haulage level. The trains load a conveyor in the hoisting adit. The dimensions in the Waterkloof/Millsell mining block have allowed WCM to replace scrapers with load-haul-dump machines.

The open cut mine uses 8t-capacity loading shovels and 40t-capacity trucks.

ORE PROCESSING

Samancor’s concentrators – three for ECM and three plus a fluidised bed dryer for WCM – are individually configured to treat specific feed and yield a particular product range.

Bushveld chromite is conveniently milled to recover a fine concentrate by gravity and elutriation techniques. However, ferrochrome furnaces need a porous charge so lumpy ore and chips must also be recovered by dense medium separation to mix with the fines. The fines may be agglomerated at the smelters, either by briquetting or using the Outokumpu pelletisation and preheating system, to reduce the amount of lumpy ore and chip required. Further gravity separation and elutriation steps yield the specific grain sizes and reduced levels of impurities, such as silica, required for the chemical and foundry sand markets.

Samancor currently operates a flexible smelting system with capacity in excess of 1Mt/y of ferrochrome at three sites.

PRODUCTION

In 2000, Samancor Chrome produced 3.7Mt of chromite and 1.06Mt of ferrochrome. Output fell in the depressed market of the following two years but recovered to 1.02Mt of ferrochrome in 2003. Total saleable production in the year to June 2004 was 1.026Mt, and that in the year to June 2005, 954,000t. Approximately 0.5Mt/y of chromite is exported, mainly as chemical-grade or foundry sand.

Grasberg Open Pit, Indonesia

Located some 60 miles north of Timika, at Tembagapura in Irian Jaya – the most easterly of Indonesia's provinces – on the western half of the island of New Guinea, the Grasberg mine has the world's single largest known gold reserve and the second largest copper reserves.

Copper is the primary commodity, with a proven and provable reserve of 2.8 billion tonnes of 1.09%. The reserves also contains 0.98g/t gold and 3.87g/t silver.

Ownership belongs to Freeport McMoran Copper & Gold (67.3%), Rio Tinto (13%), Government of Indonesia (9.3%) and PT Indocopper Investama Corporation (9.3%). Around 18,000 people work at the mine, which is operated by PT Freeport Indonesia, a subsidiary of Freeport McMoran Copper & Gold.

To support the mine and its workforce PT Freeport has built an airport, a port at Amamapare, 119km of access road, a tramway, hospital, housing, schools and other facilities.

GRASBERG GEOLOGY

The mine stands at the collision of the Indo-Australian and the Pacific tectonic plates. Two distinct phases of intrusion have led to the production of nested coaxial porphyry ore bodies and sulphide rich skarn at the margins, while sedimentary strata includes Eocene clastic carbonate limestone with siltstones and sandstones near the base.

The Dalam Diatreme (DD) forms the first intrusive stage, being highly fragmental and characterised by clasts and a matrix of dioritic composition.

Mineralisation is largely disseminated and chalcopyrite dominant, having average grades of 1.2% copper and 0.5 g/t gold.

The second intrusive stage, the Main Grasberg Stock (MG), is composed of non-fragmental, porphyritic monzodiorites, forming a quartz-magnetite dilational stockwork with veinlet controlled copper-gold mineralisation. This is a high-grade resource, with averages of 1.5% copper and 2 g/t gold.

There is also a third intrusive stage, associated with the South Kali Dykes, which was the final intrusion and the most weakly mineralised.

MINING

The workings comprise an open pit mine, an underground mine and four concentrators. The open pit mine – which forms a mile-wide crater at the surface – is a high-volume low-cost operation, producing more than 67 million tonnes of ore and providing over 75% of the mill feed in 2006.

Designed to be fully mechanised, using 6.2m3 Caterpillar R1700 load-haul-dump vehicles (LHDs) at the extraction level with a truck haulage level to the gyratory crusher, the Deep Ore Zone (DOZ) block cave mine is one of the largest underground operations in the world.

After 2004, when the DOZ mine averaged 43,600 tonnes/day a second underground crusher and additional ventilation were installed to increase daily capacity to 50,000 tonnes.

Ore from both operations is transported by conveyor to centralized mine facilities, feeding a combined daily average total of some 225,000t of ore to the mill and 135,000t to the stockpiles.
Production equipment includes 30m3–42m3 buckets, a 170-strong fleet of 70t–330t haul trucks, together with 65 dozers and graders, with radar, GPS and robotics used in the mine’s state-of-the-art slope-monitoring system.

PROCESSING

Ore undergoes primary crushing at the mine, before being delivered by ore passes to the mill complex for further crushing, grinding and flotation. Grasberg’s milling and concentrating complex is the largest in the world, with four crushers and two giant semi-autogenous grinding (SAG) units processing a daily average of 240,000t of ore.

A flotation reagent is used to separate concentrate from the ore. Slurry containing 60-40 copper concentrate is drawn along three pipelines to the seaport of Amamapare, over 70 miles away, where it is dewatered. Once filtered and dried, the concentrate – containing copper, gold and silver – is shipped to smelters around the world.

The facilities at the port also include the PT Puncak Jaya coal-fired power station, which supplies the Grasberg operations.

THE FUTURE

With the open pit heading to be exhausted in 2015, arrangements are well underway for the planned transition to fully underground production. The geology includes nine ore bodies – the Deep Ore Zone, which is located immediately below the now depleted Intermediate Ore Zone, the underground Grasberg, Kucing Liar, Mill Level Zone, Deep Mill Level Zone, Ertsberg Stockwork Zone and Big Gossan.

Since 2004, a Common Infrastructure project has been in progress to create access to these large and undeveloped underground ore bodies through tunnels some 400m deeper than the currently existing system. This will both enable the known ore to be exploited and allow the potential of associated prospective areas to be explored in the future.

Open stoping at Big Gossan is scheduled to begin production in 2008, followed by the Ertsberg Stockwork Zone block cave mining in 2009.

Grasberg and Mill Level Zone block caving is expected to start in 2016, with exploitation of Kucing Liar and the Deep Mill Level Zone commencing in 2024 and 2027 respectively.

Batu Hijau Copper-Gold Mine, Indonesia

Batu Hijau copper-gold mine is located on the Indonesian island of Sumbawa in the province of West Nusa Tenggara, 1,530km east of Jakarta. The Contract of Work for the project is held by PT Newmont Nusa Tenggara (PTNNT), a company owned by Newmont Indonesia Ltd (USA, 45%); Nusa Tenggara Mining Corporation (Japan, 35%) and PT Pukuafu Indah (Indonesia, 20%). Newmont is the project operator and has a 52.875% equity stake.

Construction of the mine and its associated infrastructure was completed in 1999, after PTNNT had spent ten years exploring the resource, with commercial production beginning in 2000. The operation continues to be one of Newmont’s lowest cost assets. In 2005, copper sales fell 16.2% to 259,780t (2004= 310,000t) at an applicable cost of $0.53/lb and an average realised price before TRCs of $1.45/lb. However, consolidated gold sales rose to 720,500oz at applicable costs of $152/oz, as compared with 715,000oz in 2004.Article Continues

Power for the project is supplied by a 120MW coal-fired plant supported by nine diesel generators.

GEOLOGY AND RESOURCES

Batu Hijau is a major gold-rich porphyry copper deposit typical of the islands of southeast Asia. These gold-rich porphyries are overwhelmingly hosted by composite stocks of diorite to quartz-diorite and, to a much lesser degree, more felsic compositions such as tonalite and monzogranite. The deposits tend to be characterised by a strong correlation between the distribution of copper sulphides (chalcopyrite and bornite) and gold as the native metal in addition to having a notably higher magnetite content. Gold typically occurs as minute (<10-15>)

As of the end of 2005, Batu Hijau had an ore reserve containing 2.77Mt copper with 0.69g/t gold. At current production rates, mining should continue until 2025.

MINING AND MILLING

Batu Hijau is an open-pit mine. Ore is transported to the primary crushers using P&H 4100 electric mining shovels and a fleet of 220t-capacity Caterpillar 793C mechanical-drive haul trucks. The mine typically handles around 600,000t/d of ore and waste, the ore grading an average 0.49% copper and 0.39g/t gold.

Following primary crushing, the ore is transported to the concentrator by an overland conveyor, 1.8m wide and 6.8km long. The concentrator circuit consists of two-train SAG and ball mills, followed by primary and scavenger flotation cells, vertical regrind mills and cleaning flotation cells to produce a copper-gold concentrate grading 32% copper and 19.9g/t gold. Counter-current decantation thickeners are used to dewater the concentrate to a slurry, which is pipelined 17.6km from the plant to the port at Benete. Here it is dewatered further, then stocked in an 80,000t-capacity storage area prior to shipment by sea.

PRODUCTION

During 2005, Batu Hijau produced and shipped 1.1Mt of copper concentrate containing 325,500t of copper and 719,000oz of gold.

TAILINGS DEPOSITION

The tailings from the operation flow by gravity from the process plant to the ocean where they are deposited 3km from the coast at a depth of about 108m. From there, the tailings, which are non-toxic and non-hazardous, migrate towards the Java Trench and are ultimately deposited at depths in excess of 4,000m.

ENVIRONMENT

There are considerable environmental challenges at Bata Hijau, including steep terrain and widely dispersed facilities stretching over 40km. The site has a tropical monsoonal climate with high rainfall, and an extended arid season with almost no rainfall. Other environmental considerations include significant seismic activity, with the associated risk of tsunamis, and acid rock drainage, not to mention the existence on site of an endangered species, the yellow-crested cockatoo.

Considerable environmental controls are in place, and Newmont reported the operation improved its ‘five-star’ environment rating to four stars in 2005.

BHP Ravensthorpe, Australia

The Ravensthorpe integrated mine and primary processing facility is located 35km east of Ravensthorpe, in a band of remnant vegetation in an agricultural region next to the Fitzgerald River National Park about 570km southeast of Perth, Western Australia, and 155km west of Esperance.

The project involves open-pit mining from three nickel deposits, and a hydrometallurgical process plant to produce up to 50,000 tons (t) of contained nickel and 1,400t of contained cobalt per annum in a mixed hydroxide intermediate product (MHP) for further processing at BHP Billiton’s Yabulu Nickel Refinery in Queensland.

Ravensthorpe is a laterite nickel project which, because of the ores’ low grade expensive and intensive processing requirements, has caused BHP some cost and schedule headaches. The project was originally approved in March 2004 with a budget of US$1,340m. But by November 2006, capital costs had risen to US$2.2bn. The company did not officially open the operation until 23 May 2008, although commissioning took place in December 2007 with first production of MHP achieved in October 2007; it was originally scheduled to start production in mid-2007.

GEOLOGY

The Ravensthorpe region is underlain by basement rocks of the Albany-Fraser Orogen and the Yilgarn Craton, which constitute the bulk of the Western Australian land mass. These rocks consist of granite, gneiss and minor enclaves of sedimentary and volcanic rocks. At Bandalup Hill, lateritic nickel deposits up to 80m thick are developed over ultramafic rocks.

Mineralisation occurs in limonite (high iron, low magnesium and calcium, upper levels) and saprolite (low iron, high magnesium, deeper levels) ores in the three deposits – Halley’s, Hale-Bopp and Shoemaker-Levy

RESERVES

The three ore bodies have a proven reserve of 125.3Mt at 0.73% nickel and 0.032% cobalt, and a probable reserve 137.9Mt at 0.57% nickel and 0.026% cobalt, giving a total of 263.3Mt at 0.65% Ni and 0.029% Co. The reserves ensure a project life of 25 years.

Mining of up to 13Mt a year started at the Halley’s deposit in December 2006 and is expected to continue for the first 11 years of operation.

Thereafter, the Shoemaker-Levy then Hale-Bopp deposits will be mined. The ore from the Shoemaker-Levy deposit will be transported to the process plant via an overland conveyor.

PROCESSING

The Ravensthorpe ore body is distinctive in that it has a high silica content, which enables the limonite ore to be upgraded to almost twice the mined grade through a beneficiation plant – a simple scrubbing and screening process to remove the barren, hard silica. The saprolite ore also upgrades but to a lesser extent.

Processing is a combination of pressure acid leach (PAL) and atmospheric leach (AL), called enhanced pressure acid leach (EPAL). The limonite is treated by PAL, while the saprolite is treated by AL using the PAL discharge and additional acid. The company says the process enables better use of all ore types within the Ravensthorpe resource, and the recovery of an additional 15,000t a year of nickel.

The process downstream of the leaching circuit uses a Cawse flowsheet with partial neutralisation, followed by separation of the barren tailings from the nickel-bearing solution, further impurity removal and precipitation of the MHP. This is then transported to the Yabulu refinery via the port of Esperance, about 120km to the east, where it is processed into nickel metal before being sold to world markets.

Ravensthorpe is self-contained and includes a sulphuric acid plant, which produces high-pressure superheated steam for leaching and other processing areas. Available steam is also used in three steam turbines to generate the site’s electrical power.

The project uses seawater piped from the Southern Ocean and pumped to the site via a 46km pipeline system. The seawater is desalinated on site to produce fresh water for steam production while the waste brine stream is used in the beneficiation circuit.

Construction of the project was managed jointly by Hatch Associates and GRD Minproc.

Talvivaara Bioheapleach, Finland

Talvivaara’s bioheapleach project – the world’s first for nickel – is centred on two polymetallic deposits, Kuusilampi and Kolmisoppi, about 30km southwest Sotkamo, eastern Finland. They form one of the largest known sulphide nickel resources in Europe and, as well as nickel, the open-pit mine is also expected to produce copper, zinc and cobalt as by-products of the process. First metal was produced on schedule at the beginning of October 2008.

The mining licenses for this area were originally granted to Finland-based stainless steel company Outokumpu in 1986, and the exploration rights were subsequently transferred to Talvivaara in February 2004. In May 2007, Outokumpu exercised its option to acquire a 20% interest in Talvivaara.

The £355m project has been financed through a share offering in 2007 that raised about £230m; the rest has been raised through a term loan.

Geology

The Talvivaara orebodies sit within the Kainuu Schist Zone, a north-south trending schist belt that extends from Rautavaara in the south via Sotkamo, Ristijärvi, Paltamo and Puolanka through to Pudasjärvi in the north. The zone consists of a series of metasediments of greenschist to upper amphibolite facies belonging to the Karelia supergroup, which rest unconformably on the Archaean basement gneiss complex.

The host rocks of the Talvivaara deposit consist of variably re-crystallised carbon and sulphide-rich black metasediments (black schists) bounded by medium-grained mica schist and Jatulian quartzites. These black schist formations range in thickness from tens of metres to 100m, except in the immediate project area where the unit has been tectonically thickened.

The main mineral assemblage in the black schists is quartz, biotite, graphite and sulphides with accessory minerals of rutile, chlorite, oligoclase, microcline, apatite, garnet, tourmaline and epidote.

Resources

The project has total measured, indicated and inferred resources of 414Mt (0.15% Ni cut-off) containing 0.26% Ni, 0.02% Co, 0.14% Cu and 0.54% Zn. Total proved and probable reserves are about 257Mt, at about the same grades.

Production

The resources are sufficient to keep the mine in production for at least 24 years, with an expected annual nickel output of about 33,000t and the potential to provide nearly 2.5% of the world’s current nickel production by 2010. The Kuusilampi pit will be mined first with the Kolmisoppi pit coming on line in 2019.

As well as nickel, the mine is also expected to produce about 60,000t/year of zinc, 10,000t/year of copper and 1,200t/year of cobalt.

Processing

The process flow at Talvivaara consists of three main steps – crushing, bioheapleaching and metals recovery.

Crushing will be carried out in three stages, followed by agglomeration with sulphuric acid to consolidate the fines with coarser ore particles.

Bioheapleaching

Bioleaching is a process whereby metals are leached from ore as a result of bacterial action. In nature, bioleaching is triggered spontaneously by micro-organisms in the presence of air and water. Commercially applied bioleaching technologies use the same phenomenon, but accelerate this natural process. The bacteria used in the Talvivaara process grow naturally in the ore, and the company reports recovery rates of up to 98% of metal from ore to solution.

The heap leaching will be operated in two stages, a primary heap pad residence time of 1.5 years and a secondary pad residence time of 3.5 years.

Process plant

The process plant design includes two parallel circuits each rated at 600m3/h of pregnant leach solution (PLS). Each circuit consists of copper recovery, zinc recovery, neutralisation and aluminium removal, nickel and cobalt recovery, iron removal and then final precipitation.

The copper and zinc recovery units precipitate the metals from their sulphides in the PLS using hydrogen sulphide. The precipitates are then recovered in thickeners and filtered to produce saleable products.

The recovery of nickel and cobalt first requires the pH of the solution to be raised to 3.7-4.0, which precipitates most of the aluminium from the solution and also produces a large quantity of gypsum. This precipitate is separated in thickeners and the underflow filtered and stored in the waste rock area.

The nickel and cobalt are then recovered by precipitation using hydrogen sulphide, while maintaining the pH at 3.6-3.8. The two metals precipitate at the same time, so there is one mixed product. The precipitate is recovered in thickeners and then filtered to produce a saleable product.

The residual solution is then neutralised and the residual metals removed from the solution. The bulk of the iron remaining in solution is removed by aerating the solution to oxidise the iron which precipitates as goethite or as a hydroxide. The slurry is thickened and the thickener underflow is sent to the gypsum pond for storage. The bulk of the remaining solution is sent to the PLS pond.

For final precipitation the pH is raised to pH 9-10 using burned lime slurry. The residual metals are precipitated as hydroxides, and gypsum is also formed. The slurry is thickened and the thickener underflow disposed of in the gypsum ponds. The solution is sent to the PLS pond.

Talvivaara has a 10-year offtake deal to sell all its output of nickel and cobalt at market prices to the Norilsk Harjavalta refinery.

Logistics

The existing main access to the project area is a regional highway. The site is well connected to the highway network via the local roads in all directions and is close to the main railway network.
“For final precipitation the pH is raised to pH 9-10 using burned lime slurry.”

The main power source for the project is electricity, with a demand of about 45MW, supplied from the Finnish grid via a new overland powerline from the Fingrid substation at Vuolijoki, about 43km west of the project area.

The main water supply is from Lake Kolmissoppi but in low flow times it will not be able to support the permitted 4,000m3/h demand, so 20% of the supply would be taken from Lake Nuasjärvi. The project also has emergency storage ponds, which will be run at 50% of capacity to accommodate storm water. During the first couple of years of operation there will be no secondary leaching; this will later take various water streams from the primary leach pond, the pit and waste dump drainage.

Drinking water will be supplied from a handful of boreholes.

China's Mines Stay Shut

China has failed to meet demand to reopen thousands small coal mines, which has worsened the country’s current power shortage. Also, local officials still fear Beijing's wrath if they suffer more high-profile disasters.

Weeks after the central government urged miners to reopen the mines, effectively reversing a years-old policy of shutting them in order to improve safety in the world's deadliest coal industry, local officials are proving reluctant. And Beijing's freeze on coal prices has lowered the incentive for miners.

The failure to boost domestic coal supplies spells trouble for coal-fired electricity generators who produce four fifths of China's power, and could add to this summer's emerging power crisis, which has already forced aluminium smelters to cut output by up to a tenth and could stoke demand for oil.

"Local government officials are more concerned about personal interest. They are afraid of the punishment a mine accident could bring to them," said Li Chaolin, a coal analyst at an industry body based in Beijing.

They are right to be concerned. Six government officials in the Luliang region of Shanxi were sacked after a blast at a small mine, approved to re-open just a month earlier, killed 34 in June, the state-run Xinhua news agency reported.

China has been pushing forward a safety campaign for three years, shutting down the kind of small, inefficient and often dangerous mines that provided 38% of its coal last year.

Around 90% of China's coal mines are classified as small, but they are eight times more deadly per ton of coal produced than the larger mines.

From 1995 to early 2008, the number of coal mines in China had fallen around 80% to about 16,000. Over the same period the death toll is down 40% to 3,786 in 2007, according to the State Administration of Coal Mine Safety.

Beijing's goal is to reduce the number of small mines to under 10,000 by 2010, and to eliminate them by 2015.

But in late May, when coal stocks in the country's key power plants had fallen to critical levels and summer power shortages loomed, China's premier Wen Jiabao called for an increase in coal output, while the country's cabinet asked local governments to speed up approvals for restarting small coal mines.

Some have returned to production in Shanxi, China's top coal producing province, but many are still closed or performing maintenance, traders and analysts said.

And in late June, the Shanxi provincial government ordered local governments to shut down illegal coal mines, highlighting the conflicting signals that have kept officials cautious.

"How can local officials re-open small mines? They want to keep their jobs," said a trader based in Shanxi, who declined to be named.

PRICE CAP INEFFECTIVE

Last month, Beijing froze the price miners are paid for thermal coal until the end of the year as it seeks to cap power prices, knocking shares of listed coal firms such as China Coal Energy Co and China Shenhua Energy Co lower.

But this has had the perverse effect of discouraging mine production and making coal exports more attractive, while not doing anything to cut losses at power generators as the order does not cover prices further down the distribution chain.

In two years China's power generators have received just a 4.7% increase in the state-set prices they can charge; not enough to offset the soaring price of coal, which until June's freeze had been freed to float with the market.

Asian benchmark thermal coal prices have trebled in just a year to record highs, while domestic supplies remain tight, so local prices should keep rising.

"Miners understand if they don't dig out all the coal now, they can sell later for a better price. Natural resources will only get more precious," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

IMPACT ALREADY FELT

The impact of the coal shortage is already being felt. There have been record power shortfalls in Shanxi Province, where the government had to ration power supplies, hurting energy-intensive plants such as aluminium smelters.

China's top 20 aluminium smelters, including Aluminium Corp of China Ltd (Chalco), will cut production by up to 10% to reduce power consumption.

Other industrial provinces, such as Shandong in the north and Guangdong in the south, have forecast deep power deficits.

Henan, another big aluminium producing province and one of the nation's most popular, has started to restrict power to industrial users in eight regions and cities, while Shanxi province on Thursday said it had begun to ration power supplies as power plants ran short of coal.

Some of the power shortfall can be met by diesel generators, and in fact during the last major power crisis in 2004 China's diesel demand surged by 15%, helping oil prices' first ascent above $50 a barrel.

The ultimate solution, though, would be to allow markets to set power tariffs, but Beijing would be reluctant to make such a move when inflation is already near a 12-year high.

"If the power tariff is opened up, all problems will be solved but its possible impact on the economy is still in question," said Lin of Xiamen University.
($1=6.860 Yuan).