Vietnam and their Emerging Nickel-Sulphide District

Mining & Minerals - Evaluations / Other Metals

Date posted: 09/07/15

Frik Els reports that nickel investors have been on a wild ride in 2014. During all this tumult in the nickel industry, a small Canadian firm called Asian Mineral Resources was quietly establishing the first Vietnamese nickel mining complex on the doorstep of the number one consumer of the steel-making ingredient. The AMR Ban Phuc nickel mine and plant, one of the few new sources of nickel sulphide in the world, went into commercial production in June, 2013, but the project has a much longer history. The company had produced a feasibility study in 2006 and received a mining license. Song Da hosts a number of projects and a producing mine extending into neighbouring China over 200km away. But a combination of a hike in concentrate export tariffs by Vietnamese authorities from 5% to 20%, a global slump in the price and a typhoon that hit the mine site located 160 km west of the capital Hanoi, hindered the project. By 2009 AMR had revived Ban Phuc and in 2012 a cash injection by resources investment firm Pala to take a majority stake saw the creation of a nickel-copper-cobalt operation with a 400,000 tpa capacity. Ban Phuc currently produces 6,400 tonne nickel, 3,200 tonne copper and 200 tonne cobalt as a byproduct which is set to expand to 9,900 tonnes of nickel equivalent in 2015. The main benefit of sulphide ores like those at Ban Phuc which was built for just $34 million, is low-cost separation and concentration through a simple flotation system. A cost effective plant and the fact that the Ban Phuc workforce is 92% local translates into some of the lowest all-in costs in the industry at $6.68 a pound, and provides local employment. CEO Evan Spencer, who took the helm at AMR at the start of the year, says the company development plan has a strong focus on exploration - AMR not only wants to extend Ban Phuc deposit, which lies in the Song Da rift zone, but also regional targets within 16 targets already identified in its 50 sq. km exploration licence.