Nickel Oxide vs. Nickel Sulphide
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Re: Nickel Oxide Vs Nickel Sulphide
Nickel sulphides are where the majority of the world's nickel has come from until now. The technology is well-understood and tried and tested. The sulphide ore is crushed and flotation cells are used to form a nickel sulphide concentrate. The concentrate is then roasted in a smelter to produce nickel metal.
Various nickel oxide deposits are in production such as Murrin-Murrin (MRE) but even 5 years after the plant opened it is still not operating at nameplate capacity (having said that, they are still coining it due to the crazy nickel price). Hot pressurised sulphuric acid is used to leach out the nickel. This results in the processing plant having to be made of some pretty tough materials in order to avoid being dissolved as well! The operators of Bulong and Cawse both went broke trying to get their plants to operate properly. A new batch of nickel laterite projects are under construction such as Goro and Ravensthorpe. One would hope that the experiences of the first batch of operators will go some way to reducing the technical risk of the new crop. I notice that MLX (Metals X) recently signed an agreement with a large Chinese expert in oxide nickel production, with a view to developing their Wingellina lateritic nickel project which is the 10th largest lateritic nickel project in the world (about 1Mt of contained nickel).
Nickel sulphides are where the majority of the world's nickel has come from until now. The technology is well-understood and tried and tested. The sulphide ore is crushed and flotation cells are used to form a nickel sulphide concentrate. The concentrate is then roasted in a smelter to produce nickel metal.
Various nickel oxide deposits are in production such as Murrin-Murrin (MRE) but even 5 years after the plant opened it is still not operating at nameplate capacity (having said that, they are still coining it due to the crazy nickel price). Hot pressurised sulphuric acid is used to leach out the nickel. This results in the processing plant having to be made of some pretty tough materials in order to avoid being dissolved as well! The operators of Bulong and Cawse both went broke trying to get their plants to operate properly. A new batch of nickel laterite projects are under construction such as Goro and Ravensthorpe. One would hope that the experiences of the first batch of operators will go some way to reducing the technical risk of the new crop. I notice that MLX (Metals X) recently signed an agreement with a large Chinese expert in oxide nickel production, with a view to developing their Wingellina lateritic nickel project which is the 10th largest lateritic nickel project in the world (about 1Mt of contained nickel).
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Re: Nickel Oxide Vs Nickel Sulphide
exgeo
Although the lateric nickel producers are able to produce - via hpal - and the technology is understood, the challenges remain for new (and old) players.
I suspect the Murrin Murrin operators are now old hands, and with strong cash flows can keep tackling the disintegration problems with new knowledge and more innovative solutions.
New players could take a long while to get to full production given that Murrin Murrin is just at 65% after 5 years. Should the likes of Goro etc have similar ramp-up problems, we will see nickel prices at $50k next year.
exgeo
Although the lateric nickel producers are able to produce - via hpal - and the technology is understood, the challenges remain for new (and old) players.
I suspect the Murrin Murrin operators are now old hands, and with strong cash flows can keep tackling the disintegration problems with new knowledge and more innovative solutions.
New players could take a long while to get to full production given that Murrin Murrin is just at 65% after 5 years. Should the likes of Goro etc have similar ramp-up problems, we will see nickel prices at $50k next year.
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Re: Nickel Oxide Vs Nickel Sulphide
Any HPAL Plant, Murin Murin included...... will always retain expensive preventative maintenance schedules in relation to urethane linings of substrates........bell housings/spears/ bunded retainers etc. Its unavoidable. MRE may now be in a position through past experiences to cash cow and address plant failures......thier SP will get hammered though!.
The problem for MRE's production will be the inherent risks associated with unplanned shutdowns and plant failure. It is inherrent with HPAL that wear of linings & exposure to metallics, will promote excessive substrate etching and the inherrent by product of cavitation to slurry hydraulics.
MRE 's forward production (aside from glencores cut) is not the best on the market ATM considering thier MC and risks associated with thier HPAL. Upside SP speculation to MRE from inferred to actual reserves or even realistic exploration targets is non existent!.
The best case scenario for an MRE shareholder is nameplate capacity in a tight nickle market (EPS & Dividend to match), pretty much the status quo...........current entry risk for a new punter?
Any HPAL Plant, Murin Murin included...... will always retain expensive preventative maintenance schedules in relation to urethane linings of substrates........bell housings/spears/ bunded retainers etc. Its unavoidable. MRE may now be in a position through past experiences to cash cow and address plant failures......thier SP will get hammered though!.
The problem for MRE's production will be the inherent risks associated with unplanned shutdowns and plant failure. It is inherrent with HPAL that wear of linings & exposure to metallics, will promote excessive substrate etching and the inherrent by product of cavitation to slurry hydraulics.
MRE 's forward production (aside from glencores cut) is not the best on the market ATM considering thier MC and risks associated with thier HPAL. Upside SP speculation to MRE from inferred to actual reserves or even realistic exploration targets is non existent!.
The best case scenario for an MRE shareholder is nameplate capacity in a tight nickle market (EPS & Dividend to match), pretty much the status quo...........current entry risk for a new punter?
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Re: Nickel Oxide Vs Nickel Sulphide
Halba,
A distinct possibility, it would seem more likely Glencore would let mid term nickle spot direction play out a little longer.
Glencore still have only probably just broken even on thier initial investment in Murin Murin . IMO the nickle market is the next commodity to likely see consolidation.
More than likely CRVD will gobble MBN, probably just waiting to see if thier JV targets further define reserves, and production at Santa draws closer.
Halba,
A distinct possibility, it would seem more likely Glencore would let mid term nickle spot direction play out a little longer.
Glencore still have only probably just broken even on thier initial investment in Murin Murin . IMO the nickle market is the next commodity to likely see consolidation.
More than likely CRVD will gobble MBN, probably just waiting to see if thier JV targets further define reserves, and production at Santa draws closer.
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Re: Nickel Oxide Vs Nickel Sulphide
freebies
HPAL is "fixed cost".
So throughput is key, and better performance means bigger profits as unit costs are decreased.
MRE has experience on its side, and maintenance programs are now in place which mitigate unforeseen plant problems.
While output remains high, and nickel margins extremely robust for MRE (which produces the metal and not concentrates) the company's profits will see its share price hold up relatively well.
Don't forget MRE's heap leach project which might end up churning out a few thousand tonnes of nickel each year for a pittance of expenditure, and on scats that were otherwise not destined for production.
The thing about cash cows like MRE is that they work both ends of the market: As potential takeover targets, and as potential acquisitors.
As somewhat of an aside, market players who follow the charts are less aware of the fact that many of the base metals producers have been reducing debt rapidly (even totally in some cases) while at the same time spending big on capital items. In principle this will give them a buffer over more conventional stocks that tend to run on evenly-spread costs and tightly managed budgets.
My point is that while analysts have always had a tendency to discount this sector's future prices, the companies are now better than ever placed to offer shareholders stronger future returns (as their bottom lines are less encumbered with debt).
freebies
HPAL is "fixed cost".
So throughput is key, and better performance means bigger profits as unit costs are decreased.
MRE has experience on its side, and maintenance programs are now in place which mitigate unforeseen plant problems.
While output remains high, and nickel margins extremely robust for MRE (which produces the metal and not concentrates) the company's profits will see its share price hold up relatively well.
Don't forget MRE's heap leach project which might end up churning out a few thousand tonnes of nickel each year for a pittance of expenditure, and on scats that were otherwise not destined for production.
The thing about cash cows like MRE is that they work both ends of the market: As potential takeover targets, and as potential acquisitors.
As somewhat of an aside, market players who follow the charts are less aware of the fact that many of the base metals producers have been reducing debt rapidly (even totally in some cases) while at the same time spending big on capital items. In principle this will give them a buffer over more conventional stocks that tend to run on evenly-spread costs and tightly managed budgets.
My point is that while analysts have always had a tendency to discount this sector's future prices, the companies are now better than ever placed to offer shareholders stronger future returns (as their bottom lines are less encumbered with debt).
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Re: Nickel Oxide Vs Nickel Sulphide
Red,
Totally agree on the bottom line with the current Oz producers of Nickle, MRE included and like you have speculated for some time on this exact scenario we are enjoying
.
I am of the opinion forward production wise and cashed up wise, MRE is not the best one to accumalate further.......just my
.
Disagree with you on MRE plant issues though..........
Red,
Totally agree on the bottom line with the current Oz producers of Nickle, MRE included and like you have speculated for some time on this exact scenario we are enjoying
.I am of the opinion forward production wise and cashed up wise, MRE is not the best one to accumalate further.......just my
.Disagree with you on MRE plant issues though..........
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Re: Nickel Oxide Vs Nickel Sulphide
Isn't there already a thread for MRE? I thought this was a more general thread about nickel deposit types?
Isn't there already a thread for MRE? I thought this was a more general thread about nickel deposit types?
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Re: Nickel Oxide Vs Nickel Sulphide
freebies
I don't pretend MRE is the best nickel play.
Nor do I think hpal is easy to manage for MRE.
However, my belief is that MRE has enough operational experience to nip in the bud the worst of its known problems, PLUS the cash to throw at any potential problems.
The concentrates producers are being "screwed" by their buyers on tc/rc costs and losing the "margin" game to companies like MRE.
So until I see the tc/rc equations stacking up better for concentrates producers, my investment in MRE stays.
freebies
I don't pretend MRE is the best nickel play.
Nor do I think hpal is easy to manage for MRE.
However, my belief is that MRE has enough operational experience to nip in the bud the worst of its known problems, PLUS the cash to throw at any potential problems.
The concentrates producers are being "screwed" by their buyers on tc/rc costs and losing the "margin" game to companies like MRE.
So until I see the tc/rc equations stacking up better for concentrates producers, my investment in MRE stays.
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Re: Nickel Oxide Vs Nickel Sulphide
But at some point it's useful to make the link to the miners/producers - and it was you who opened the door to MRE, was it not?
The implications of lateric production are moot, as costs are now running into the multi-billions for Goro and BHP's Ravensthorpe projects, to name a few.
Clearly the investment costs will curb newcomer's enthusiasm unless there is some certainty that nickel prices will hold higher for longer in order to make a quid.
You are right.
But at some point it's useful to make the link to the miners/producers - and it was you who opened the door to MRE, was it not?
The implications of lateric production are moot, as costs are now running into the multi-billions for Goro and BHP's Ravensthorpe projects, to name a few.
Clearly the investment costs will curb newcomer's enthusiasm unless there is some certainty that nickel prices will hold higher for longer in order to make a quid.
