Samsung eyes investment in $2.2bn Metals X nickel mine
by: David Fickling and David Winning From: Dow Jones Newswires November 25, 2011 4:34PM
SOUTH Korean conglomerate Samsung Group is in talks to invest in a $2.23 billion project to mine nickel in the heart of the Australian outback, the mine's owner confirmed today.
"We have held discussions with many international entities including the Samsung C&T Corp," the company said in response to an earlier Dow Jones Newswires article.
"All discussions are at a preliminary stage and we have not received any formal proposals," Metals X said.
Metals X estimates the Wingellina project could produce 40,000 tonnes of nickel and 3000t of cobalt in concentrate every year for more than 40 years.
However, the project's remote location, near where Western Australia, South Australia and the Northern Territory meet, means a mine is expensive to develop - nickel would likely need to be moved by truck to the Adelaide-Darwin railway and on to the coast for export.
A source familiar with the situation earlier said that the talks could involve Samsung Group taking equity in the Wingellina project owned by Metals X, with its trading and construction unit, Samsung C&T, securing the contract to design and build the mine.
"The Wingellina nickel project is one of multiple overseas construction projects that the company has had a look at," a Samsung C&T official said.
Australia has a third of the world's reserves of nickel - a commodity used in everything from cutlery to coins to clock pendulums. Miners are seeking to bring on new production to tap rising demand in China, which accounts for nearly 30 per cent of global refined nickel imports and uses the metal primarily to make stainless steel.
Chinese nickel producer Jinchuan Group, which holds a 13 per cent stake in Perth-based Metals X, last month signalled it won't convert its interest into a direct 20 per cent interest in the broader project area covering Wingellina, after failing to gain approvals from Chinese government regulators. That decision helped free Metals X to advance talks with Samsung and other potential partners in Japan.
Metals X is also Australia's largest tin producer by output, with mines in Tasmania state, and the ninth biggest in the world. John Durie
MLX Price at posting:
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