Map of Sconi mining project
Map of Sconi mining project

$1.3b nickel project set to create 800 jobs

THE former nickel mining town of Greenvale is set for revival on the back of a $1.3 billion project to produce nickel and cobalt for the battery market and scandium for the automotive market.

Listed company Australian Mines Ltd announced a bankable feasibility study into the Sconi project yesterday showing it was "commercially attractive" and forecasting a start to construction by mid next year.

The project would create 500 construction jobs and about 300 operational jobs when its mines and processing plant are working in 2021.

"The Sconi (bankable feasibility study) demonstrates robust project and financial metrics with capital costs in line with Australian Mines' prediction for the processing plant," Australian Mines managing director Ben Bell said.

"Production volumes and specifications are within the range sought by our offtake agreement with (Korean energy group) SK Innovation."

The study says the project has a total capital cost estimate of US$974 million ($1.3 billion), including US$730 million for a processing plant to be built about 10km north of Greenvale and a mine construction cost of US$31 million at three sites including the old Greenvale mine.

Annual revenues are estimated at US$512 million over 18 years with a project payback period of about five years.

Australian Mines is negotiating with financiers in Australia, the United States and the United Kingdom with the aim of obtaining finance by March and starting construction in May or June.

The study contemplates the construction of accommodation at Greenvale and a mostly drive-in drive-out workforce.

Sconi's total ore reserve estimate is 33.89 million tonnes at 0.67 per cent nickel, 0.1 per cent cobalt and 42 parts per million scandium, feeding a two million tonnes per annum a high pressure acid leach and solvent extraction plant.

The project would deliver up to 12,000 tonnes of cobalt sulphate and 60,000 tonnes of nickel sulphate with scandium oxide will be sold as a by-product.

Greenvale Roadhouse owner Judy Edmonds said the town's 140 residents had seen the project develop over about nine years and hoped it was a goer.

"I think it would be wonderful for Greenvale," Ms Edmonds said.

"I'd like to see the town boom again."