18 Oct 2007

Swiss mining giant approves nickel project in New Caledonia

12:03 pm on 18 October 2007

The swiss mining giant Xstrata has approved a nickel mining project in New Caledonia with a local partner worth 3.8 billion US dollars.

Xstrata will fund around 80 percent of the investment and will receive in return the same percentage of cash-flows generated by the Koniamabo mine over the next 25 years.

In a statement, the company says the project will be funded through Xstrata's internal cash revenues and ongoing strong cash flows from the group's operations.

Xstrata will hold a 49 percent stake in the project via its Xstrata Nickel subsidiary, with the remaining 51 percent held by the South Pacific mining group SMSP, which is controlled by an independence movement in northern New Caledonia.

The Koniambo project is initially expected to produce 60,000 tonnes of nickel a year, with the first ore processed in the first half of 2011.