Munali Nickel Mine
CNM has partnered with Jinchuan to restart mining operations at the Munali nickel mine, located 75 km south of Lusaka in Zambia. A lease and royalty agreement has been signed giving CNM full operational control of the Munali mine and the adjacent exploration area for a 10 year period with the option to extend by another 10 years at CNM’s discretion.
In excess of $180m has already been spent by the previous owners in developing the mine, installing a concentrator and bringing the mine into production. However, for a number of reasons, such as the use of the wrong geological model and hence the wrong mining method being employed, this lead to uneconomic operations when the nickel price fell, and the placing of the mine on care and maintenance at the end of 2011.
CNM Turn Around & Re-start Plans:
Working with the mine’s management team, CNM has spent the past two years conducting extensive evaluation and study work at Munali to put together a sustainable restart plan. A new geological model has been developed, a new JORC resource has been defined and a new mining method has been planned to extract the nickel from the ore body more efficiently and economically. The feasibility study for the mine restart was completed in March 2015. In-country, the mine will be operated through CNM’s wholly owned operating company, Mabiza Resources Ltd.
In May 2018, CNM succesfully concluded a transaction with a Chinese listed company to re-start the Munali Mine. The funding is phased and the first tranche of $10m has been transferred. CNM are now slowly progressing the mine back into production. Our new Chinese financiers have acquired a 32% equity stake in CNM, will take 3 Board seats along with 3 seats held by ourselves and 3 seats with our very supportive shareholder of the past four years, CE Mining. The plan is to bring ourselves back into production early in 2019 to coincide with the positive nickel price forecasts.
Embedded Social Commitment:
As part of the Agreement signed with Jinchuan, CNM completed the original commitments outlined in the 2006 Relocation Action Plan (RAP) prepared by Albidon Zambia, which included physical relocation of some households, construction of a new school and medical clinic.
Munali Optimisation: Long Term Sustainability
CNM has developed a value add plan for long-term nickel sulphate or nickel metal production. Optimisation studies are already underway with the potential to include an SX/EW circuit to produce a nickel sulphate and metal, significantly reducing operating costs.
The new geological model, new resource estimate and new mining method have been designed to ensure that this time around, Munali’s operations will be sustainable. Additionally, CNM believe that this could be the cornerstone for a number of similar projects in the region.