The steelmaker, POSCO, is apparently going to spend US$4 billion or so on a brine project in Argentina it has long been interested in and use relatively new technology in the process. Both Rio Tinto and BHP have thus far passed up opportunities in their backyard in the lithium space, leaving the likes of Pilbara Minerals free to wander about between the majors' railways and port infrastructure and become a growth company that's already worth A$10 billion or so. Over that same period Rio was torched big time in the Balkans with its problematic Jadar lithium venture and is now looking at Rincon in Argentina, while having other multibillion dollar sovereign risk issues on its hands at the Oyu Tolgoi copper gig in Mongolia. For its part, BHP appears to have had a bit of luck after trying for years to get rid of its Western Australian nickel business before getting the memo about the commodity being a "future-facing" metal. Now so entranced by nickel, BHP has headed off to Tanzania and the Kabanga project, a "world-class" sulphide deposit in the hands of metallurgist and former ASX entrepreneur Keith Liddell's Kabanga Nickel - a private company majority owned by Liddell and a couple of others. Thus far BHP hasn't dived in too deep to Kabanga, investing US$50-90 million. But it is noteworthy on a couple of levels. Firstly, while the vibe for Tanzania is of a hugely improving investment jurisdiction since the previous president died last year, it has got to be at the riskier end of countries in which to do business given recent history. And secondly, the project will feature some sort of hydrometallurgical processing technology. Now, as they used to say, ‘oils aint oils' but the hydrometallurgical aspect could bring one's mind back to Australia, and in particular the Ravensthorpe laterite project developed by BHP. Raventhorpe, Beenup mineral sands and the HBI project at Port Hedland were a shocking trio of project debacles spewed out by BHP 20 or so years ago. Quite how one major company could so comprehensively stuff up three times in quick succession is still pretty incredible, but clearly the BHP development structures and management teams back then weren't having their best days. Still, it is also fair to envisage any investment banker-type suggesting BHP take a look at something like the Wingellina limonite nickel-cobalt project out in the Western Australian boondocks would be frog-marched out of the major's Melbourne headquarters by security. Such are the scars. And yet… Wingellina features future facing metals, its located in safe-as-houses Australia and according to its proponents - recently ASX-listed NICO featuring execs from the project's former owner Metals X - it is a potential 40-cum-100-year project that could produce about 2% of the current world nickel market. Or in copper terms, the market supply equivalent of Rio's ‘world-class' Oyu Tolgoi underground operation in the South Gobi producing 500,000tpa of copper. It is big, it's permitted and it's simple open cut mining. Given its location, it also offers opportunities for cool stuff like solar power generation and hence ‘green' nickel-cobalt output. A bitumen highway is set to be built next door. The downside is a major capex hurdle that could be somewhere in the order of A$3 billion. But is that really a roadblock for a major mining company like BHP given a multi, multi, multi-decade-project? At a nickel price of US$20,000/t, the project pays back that capital in a small fraction of its currently outlined 40-year life. Then there's the processing question given the history of HPAL/laterite nickel projects in Australia. But hang on. There's surely now enough HPAL plants working to put that one to bed, including in Cuba where they've been doing it since humans had the technological ability to send astronauts to the moon. Are major established mining companies really saying they are not technologically capable enough to efficiently recover nickel from a homogeneous limonite deposit like Wingellina? Really??!! Is this rocket science? So, if the established miners of the world aren't interested, who else could potentially be interested in Wingellina and its ‘future facing' metals? Well, funnily enough, maybe a company called … POSCO. It already knows the project well, having been involved in Wingellina testwork back in the depressed nickel market of 2014 when ‘future facing' metals were yet to appear as thought bubbles. Another Korean firm involved with Wingellina during that depressed era was construction and engineering company Samsung C&T. Continuing with the Korean angle, it is also interesting that cashed-up nickel sulphide junior Blackstone recently invested in NICO, with that company's managing director Scott Williamson having plenty to do with the South Korean scene over the past 2-3 years given backing from firms in that country for Blackstone's ambitious plans in Vietnam. Meanwhile, NICO's MD Rod Corps spent the best part of a million bucks las
NC1 Price at posting:
98.5¢ Sentiment: Buy Disclosure: Held
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