Singapore 26/04/2016 - Japan’s Mitsubishi Corp and Pacific Metals Co (Pamco) will sell their stakes in Strand Minerals – which holds a 90 percent stake in PT Weda Bay Nickel in Indonesia – to Eramet, the companies announced.
After acquisition of Mitsubishi’s 30-percent and Pamco’s 3.4-percent interests in Strand, Eramet will become a 100-percent shareholder of Strand.
Eramet’s net debt will increase by nearly 100 million euros ($113 million) as a result of the transaction, the French nickel and manganese producer said last Friday.
On Monday, Mitsubishi said it has been carrying out a feasibility study on the project since joining it in February 2009 and has decided to sell its shares to Eramet because the “criteria for project development have not been met”.
Located Halmahera island in the North Maluku province of Indonesia, Weda Bay Nickel is one of the largest nickel deposits in the world with measured, indicated and inferred resources at more than 9.3 million tonnes of nickel. The remaining ten-percent stake in Weda Bay is held by Indonesia’s PT Aneka Tambang (Antam).
The project is currently suspended due to the slump in global metal prices. The project was envisioned to be implemented in two phases, the first phase to produce 35,000 tonnes of nickel per year, followed by a second phase expansion of another 30,000 tonnes per year in capacity when the first phase plant is operating optimally.
At full capacity after the second phase ramp-up, the plant was expected to treat approximately 4.5 million tonnes of dry ore each year, producing over 65,000 tonnes of nickel and 4,000 tonnes of cobalt annually.
In October last year, Eramet took to suspending major projects after falling nickel and manganese prices fell to historical low levels.
It had posted an overall net loss of 714 million euros last year, after accounting for 668 million euros of asset impairment and tax receivables.
Eramet’s nickel production, which includes ferronickel and nickel matte, fell three percent to 53,369 tonnes in 2015.