There’ll be no change of name at European Nickel, although one has been mooted, but there can be no doubt either that, following recent moves into the Philippines, the company has gone truly global. Over a nice bit of fish in a pub around the corner from his Mayfair office, European Nickel chief Simon Purkiss, marks on a map for Minesite’s edification the locations of all the world’s known nickel laterite regions. There aren’t many of them – a few in Africa, one or two in the Caribbean and the north end of South America, one on the north west coast of North America, a big district in Central Asia, one in the north east of India, the central European deposits, and those in what in former times were known as the South Seas, including, at a stretch, New Caledonia. Between them all they host over 72 per cent of the world’s known nickel resources. The map on which Mr Purkiss marks these regions has the rather intriguing title: “Our Growing Presence”, and it serves in European Nickel’s latest presentation, to illustrate current areas of operations. So far the list consists of Turkey, Albania, and the Philippines, and, again at a stretch, the UK, where the company has its head office.
Minesite gets the impression that a move into Africa could be next on Mr Purkiss’s list, though nothing so concrete is forthcoming from the man himself. He is at pains though to argue that this global expansion isn’t just a result of the delays the company has faced on its flagship Caldag project in Turkey. A metallurgist by trade, Mr Purkiss has no doubts that the Caldag project works, and that European Nickel’s proprietary nickel laterite atmospheric leaching process will be shown to be commercially viable. No one really doubts this any more – all the trials have been done.
The hiccup has been the unwillingness of the Turkish authorities to give the company permission to cut down any trees. No one has ever satisfactorily explained why this is so, and indeed directors of other mining companies operating in Turkey tend to look mystified when it’s put to them that forestry permits represent a risk for them. But European Nickel found the issue such a serious stumbling block that reckoning up the delays to Caldag now requires one to count in years rather than months. This lack of progress was particularly frustrating last year, when nickel went through US$50,000, although in retrospect Mr Purkiss is the first to admit that that price was a “bubble” and “unsustainable”.
Still, US$50,000 nickel did have some interesting consequences. For a start it encouraged the expansion of a business model known as direct shipping ore. Under this model companies, among them European Nickel joint venture partners Toledo Mining and Rusina, dig up laterite ore, truck it to a port and ship it directly to China, with no processing involved whatsoever. Margins on that sort of business at US$50,000 were very nice. At the current nickel price of less than half that, things are very tight indeed. At some point the directors both Toledo Mining and Rusina knew that they were going to have to look at options for on-site processing. The fall in nickel prices has moved the consideration of those options rather quickly up the to-do list, and that’s where European Nickel comes in.
Even if Mr Purkiss had always planned to go global with European Nickel, encountering two companies struggling with ever-tighter margins on nickel laterite orebodies just as Caldag was becoming ever more bogged down, must have seemed opportune, to say the least. Here at last was some good news to present to shareholders: an equity in to two projects, Rusina’s Acoje property on Luzon island, and Toledo’s Berong property on Palawan island. Between them the two properties hold an awful lot of nickel. At Acoje, the JORC numbers show 840,000 tonnes contained, while at Berong, Toledo Minng’s own estimates reckon the deposit could go as high as 4.9 million tonnes.
The real trick now will be to see if European Nickel’s leaching methods work half way round the world, in an atmosphere that’s much more humid than the one at Caldag. But if they do, then the value added on these two projects should be substantial. Trials are just getting underway, but asked to rate the chances of a successful application of the process, Mr Purkiss says quite matter-of-factly, “I’m 90 per cent confident we can do it”. He’s confident too, that after endless delays the forestry permit for Caldag is about to come through, and that once it does Caldag can be producing within 14 months. Nothing’s ever simple, but it looks as though sooner or later European Nickel is going to become a significant nickel producer on a global scale. Watch this space.
