Norilsk Nickel to develop its assets in Botswana and South Africa

OJSC MMC Norilsk Nickel (herein after MMC Norilsk Nickel or the Company) looks with optimism at the potential of developing its production assets in Africa (Botswana and RSA). This was announced today by Roman Panov, Acting Director of International Assets Department at MMC Norilsk Nickel, at the business forum «Russia - Africa: cooperation horizons».

Speaking about Nkomati project, Roman Panov underlined its importance as a major investment project being implemented in South Africa jointly with the South-African company African Rainbow Metals (ARM). MMC Norilsk Nickel invested more than $200 million in this project.

The project envisages production expansion through open-pit mining of larger amounts of disseminated sulphide ore, which includes development of two zones of polymetallic mineralization containing over 900 kt of nickel. Along with nickel, a number of by-metals will be produced here including copper, cobalt, chrome and PMG.

The new concentrator with annual capacity of 4.5 million tons of copper-nickel ore is in the final stage of construction. First concentrate was produced in September 2009. Next step would be increasing the capacity of the existing concentrator from 1.2 to 3 million tons per annum.

In 2011 both concentrators should reach their projected monthly capacity of 625 thousand tons of ore.

Projected 2010 production at Nkomati:

8.1 thousand tons of Ni in concentrate and
3.9 thousand tons of Cu in concentrate.

Total production of nickel in concentrate at both Tati and Nkomati in Q1 2010 was in line with production plans and reached 4.4 thousand tons.

In his speech, Mr. Panov emphasized that in Botswana the Company implements a unique project (Tati Nickel), where nickel concentrate will be produced from low-grade ore (@ 0.1% Ni) using a new process flow sheet with an integrated pre-concentration unit.

Overall 10.7 million tons of ore were mined from Phoenix open pit in 2009.

6.9 million tons of ore were processed by the Dense Media Separation (DMS) plant commissioned in the end of 2008. By 2009 year-end the rate of capacity utilization reached 87%. Overall nickel recovery at the concentration plant reached 88.6%. The total of 363 thousand tons of concentrate with average nickel grade of 5.4% was produced at the plant in 2009.

Tati Nickel’s capital investments reached $30 million in 2009. The Company is actively expanding the project’s resource base: target areas for exploration were identified and licenses for these areas were obtained.

Projected 2010 production at Tati Nickel:
18.5 thousand tons of Ni in concentrate
20.4 thousand tons of Cu in concentrate
3 tons of PMG