29 Mar 2007

Xstrata mining moves cautiously on developing nickel plant in New Caledonia

7:52 am on 29 March 2007

The Swiss mining giant Xstrata says it will move cautiously in developing a nickel producing operation in Koniambo, New Caledonia, site of one of the world's last remaining large-scale nickel deposits.

Its Project manager Kevin Brown says the venture, which has yet to be formally backed by Xstrata shareholders, demanded prudence because several financial questions had yet to be considered.

But he says during a recent international nickel conference in the country, he was holding to 2010 as the planned production start-up date.

The company earlier this year said the operation could cost near 3 billion US dollars.

Xstrata acquired the Koniambo site in northern New Caledonia, a French Pacific territory, when it absorbed Canadian group Falconbridge in August 2006.

Mr Brown says Xstrata was determined to control rising costs associated with the project and to adhere to 2012-2013 as a target period for full capacity production.

The project is considered to be intensely political, notably as a means of preserving stability in the territory by making economic gains available to the Kanak population.