The combined project includes the development of a mine, treatment plant and associated infrastructure near Ravensthorpe, Western Australia and the expansion of the QNI Yabulu Refinery near Townsville in Queensland. The capital cost for the combined project is expected to be US$1.4 billion, with a capital intensity of approximately US$12.7/lb of annual nickel production.

The Ravensthorpe processing plant will employ an Enhanced Pressure Acid Leach (EPAL) hydrometallurgical process, which is a combination of pressure acid leach and atmospheric leach, producing a mixed nickel and cobalt hydroxide intermediate product (MHP). The MHP will contain up to 50,000 tonnes per annum (tpa) nickel and 1400tpa cobalt and will be packaged and shipped through the Port of Esperance to Townsville for final refining at the QNI Yabulu Refinery.

The project will increase nickel production capacity from the expanded Yabulu Refinery by more than 140% from 31,200tpa to an estimated 76,000tpa, with the life of the refinery being extended by approximately 25 years.

President Stainless Steel Materials Chris Pointon said: “The proven benefits of the combined processes, together with nearly 30 years of expertise developed at QNI, make the project technically and economically robust.”

“The project is designed to enable optimal utilisation of all ore types within the Ravensthorpe resource. The refinery element of the process is a brownfield expansion of the existing, proven Yabulu nickel and cobalt refinery, meaning risks traditionally associated with a new project are substantially reduced,” Mr Pointon said.

He said the project was the next major step in BHP Billiton’s global nickel growth strategy since the successful Cerro Matoso Line 2 expansion in Colombia, delivered three months ahead of schedule and under budget.

New production will boost BHP Billiton’s combined nickel production capacity from its Australian and Colombian operations from 85,000tpa to more than 130,000tpa by 2007. Cobalt production will increase from 2000tpa to 3400tpa. It will significantly lower unit production costs.

“We believe the key strengths of the combined project – low mining costs, high leach plant feed grade, and a world-class refining circuit – gives it the best risk/reward profile for a laterite project anywhere in the world,” Mr Pointon said.

“The Ravensthorpe project will further reinforce our position as one of the largest global suppliers of finished nickel and cobalt products.”

He said new production would help meet the continued structural shortfall in world nickel supply and strong demand beyond the current nickel cycle.