Star nickel producer in northern Quebec

The Raglan nickel mine in northern Quebec has been very, very good to Falconbridge Ltd., the company that built the mine and retains 100% interest. Since start-up in 1998, Raglan has made up for a shortfall in concentrate from the company’s Sudbury-area mines, needed to feed its hungry nickel smelter near Sudbury.

The nickel side of the business has been very, very good to the Falconbridge. Of Falconbridge’s four main metal products–copper, nickel, aluminum and zinc–nickel has the highest profit margin. For the second quarter of 2005, nickel generated US$200 million of income on operating assets from revenue of US$613 million. That squeaked in just behind Falconbridge’s top earner copper, which generated US$202 of income from revenue of US$1.058 billion.

The nickel business unit consists of two parts: the Integrated Nickel Operations (INO) that mines, concentrates and smelts nickel from sulphide mines in North America and produces refined nickel product in Norway, and Falcondo that produces ferronickel from nickel laterite in the Dominican Republic. The INO operates four nickel mines, a concentrator and a smelter in the Sudbury area of northern Ontario. The smelter accepts nickel concentrate from the company’s Sudbury mines and all the concentrate from its two other nickel mines–Raglan in northern Quebec and Montcalm near Timmins, Ont.–as well as custom feed. Montcalm just achieved commercial production the beginning of this year. The company’s Nickel Rim South nickel mine near Sudbury is being developed for startup in late 2009. (See CMJ February 2005 for details.)

On July 29 Noranda Inc. and Falconbridge amalgamated to form the largest Canadian mining company, which retains the name “Falconbridge Limited”. Soon after, Swiss giant Xstrata plc purchased a 19.9% interest in Falconbridge from Brascan Corp. (announced August 15), to become the company’s largest single shareholder.

Raglan gets star treatment

The Raglan mine processes about 1 million tonnes of ore each year grading almost 3% Ni and 0.8% Cu. In 2004 it produced a record 26,552 tonnes of nickel and 6,867 tonnes of copper in concentrate, which was significantly more nickel than the 22,602 tonnes of nickel produced by the Sudbury mines. (Sudbury mines also produced 24,694 tonnes of copper last year.)

Ongoing exploration around Raglan has essentially replaced mined ore every year. In fact, the high-grade nickel-copper sulphide deposits scattered along the 55-km length of the Raglan property hold a substantial portion of the company’s nickel reserves. Raglan’s proven and probable nickel reserves as of the end of 2004 were 15.65 million tonnes grading 2.82% Ni and 0.78% Cu. This represents more than three times the nickel reserves in the company’s Sudbury-area mines. In addition, Raglan has measured and indicated resources of 3.77 million tonnes grading 2.22% Ni and 0.74% Cu plus inferred resources of 5.20 million tonnes at 2.9% Ni and 0.8% Cu.

Knowing the importance of looking after its best assets, in the fourth quarter of 2004 the Falconbridge board approved Phase One of a two-phase Raglan optimization program aimed at improving the mill.

Already underway, the first phase will convert the mill from autogenous to semi-autogenous grinding (SAG), enabling it to process harder ore, reduce grinding variability and maintain throughput at 1.0 million tonnes/year. This conversion is expected to require a two-week shutdown of the mill in October 2005. By the end of July, about 50% of construction for Phase One was complete. Capital spending in 2005 is expected to be $29 million of the $33-million total for this phase.

The second phase will involve changes to debottleneck the grinding circuits in the back half of the plant, increasing the mining and milling rate to 1.3 million tonnes/year (150 tonnes/hour). The result of the two-phase program will increase Raglan’s annual nickel production by 20% starting in 2007. No price tag has been placed on the second phase yet.

These are the bare bones of the story, but we dug a little deeper in a late July interview with Steve Ciccone, the Oakville, Ont.-based operations manager of AMEC Energy and Mining, which is managing the Phase One project. The following is his description of the work AMEC is doing right now at Raglan.

Our involvement on this project at Raglan dates back to the fall of 2003 when we were awarded the pre-feasibility study. The basis for the Phase One work is to increase mill throughput, allowing Raglan to maintain their current nickel production and improve the recovery. We’re going from 115 to 130 tonnes/hour of throughput. The main component of that is converting their autogenous grinding mill to a semi-autogenous grinding mill, plus associated modifications. We started detailed design the fall of 2004, and we started construction in March of this year. This project is due to be complete the end of October.

“We’re converting the existing mill by replacing the liners to work in a SAG operation, and replacing the feed chute, the screen and a small crusher. Norcast is supplying the liners, Metso the new double-deck screen and Sandvik the pebble crusher. From Russell Minerals in Australia we’re buying a new liner-handling machine to install and replace the liners in the SAG mill, which will have to be switched out every three months from wear. Russell is also supplying a feed chute handler–which resembles a customized forklift–for moving our SAG mill feed chute in and out, when we change the liners. A liner-handler building is being erected right now.

“In addition to the modifications in the grinding circuit, we are installing a deaeration system or ‘frothbuster’ in the dewatering circuit to deal with the excessive froth build-up in the concentrate thickener tank. This innovative process was developed by Outokumpu and is the first installation outside of Australia.

“AMEC is also managing about a half dozen other, infrastructure-related projects at Raglan’s mill that we picked up as we went, totaling about $15 million. In all cases we’re doing the procurement contracts, project services and construction management. In some cases we’re awarding design to entities other than AMEC.

“On top of that we are responsible for the rehabilitation of their dock at Deception Bay, about 100 km from the mill site. It’s a wharf that Falconbridge acquired from the Asbestos Corp. The dock is formed by three sheet pile cells–cylindrical cells of sheet piling–that have been driven and then backfilled. There’s not much infrastructure on them: a 285-tonne mobile Manitow crane on one, used to offload and onload, and a fuel line on another. But the sheet piling has experienced some corrosion, and the wharf requires repairs and upgrades.

“The present approach is to rehabilitate the sheet pile cells, driving sheet piling around the perimeter and backfilling in the annular space. But we’re re-evaluating this and considering other options, so the capital value is unclear. Some interim work is being done this summer, which will be incorporated into the more permanent rehabilitation done next summer. We’re managing that work, and the main designer is Westmar from Vancouver.

“Raglan’s location in the Far North brings all sorts of challenges. I don’t think people understand how challenging it is, as opposed to a project in a location such as Sudbury or Timmins. You’re constrained in so many ways.

“You’re constrained from a shipping point of view, obviously. There’s about half a dozen shipping opportunities in a year, so that drives your schedule unless you want to fly in goods at a huge premium. Our dock rehabilitation work cannot disrupt these shipments; that was one of our major constraints. They [Falconbridge] still have to move concentrate out and to move food, fuel and oth
er things in. We have to arrange our construction schedule so that the contractors can stop what they’re doing and move onto another aspect during ship-loading.

“In executing projects in an environment like that, you rely on the existing operations to supply you with items like mobile equipment, power, fuel, etc. Just housing people is a challenge. That puts demands on the operating plant, so you’ve got to manage your situation and your priorities. That’s just the logistics side.

“And then of course there’s the weather. We had snowfall at the end of June, but it warmed up in July and August, and we made good progress with the long days. You get a very short ‘good weather’ construction window–from the end of April to the first part of October–and you have to close up buildings before the cold weather starts.

About AMEC

AMEC is an international project management and services company that designs, delivers and supports infrastructure from local technical services to international landmark projects, leading the field in project management and services. The company employs 44,000 people in 40 countries, generating annual revenues of about Cdn$11 billion. In Canada, AMEC has 4,000 employees working from 78 offices located in nine provinces and one territory. Its shares are traded on the London Stock Exchange.

AMEC has more than 50 years experience of work in the mining industry. From project evaluation and development to mine closures, AMEC offers a wide range of multi-disciplinary services. In the last ten years, AMEC has provided services on more than 1,000 mining and metallurgical projects in nearly 70 countries.