Norilsk Secures Control of LionOre
Bidding for LionOre began in late March, when Xstrata and LionOre announced a friendly agreement whereby Xstrata would acquire LionOre for C$18.50/share. Norlisk came into the picture on May 3 with a bid of C$21.50/share. Xstrata countered with a bid of C$25/share on May 16 but dropped out of the bidding when Norilsk announced its C$27.50/share offer on May 23. Xstrata came out of the fray with C$305 million as a result of a break fee from an earlier support agreement with LionOre.
Norilsk is Russia’s largest mining company and the world’s largest producer of nickel and palladium. In recent years it has been diversifying internationally via acquisitions. Prior to acquiring LionOre, its international operations included Norilsk Nickel Harjavalta, which operates a nickel refinery in Finland; Norilsk Nickel Cawse, which operates a mine and high-pressure acidleaching plant in Australia; and a 20% shareholding in MPI Nickel, which operates the Black/Silver Swan mines and owns the Honeymoon Well project in Australia. The remaining 80% of MPI Nickel was held by a subsidiary of LionOre. Norilsk also is the majority shareholder in Stillwater Mining in the United States.
In 2006, Norilsk produced 257,000 metric tons (mt) of nickel. Mines operated by LionOre produced 34,100 mt in 2006, of which 30,600 mt were attributable to LionOre.
LionOre is a Canadian company, headquartered in Toronto, with nickel operations in Australia, Botswana and South Africa. Its Lake Johnston and Black Swan operations in Australia produced a combined total of 16,900 mt of nickel in 2006. Its Tati operations in Botswana produced 13,700 mt. In South Africa, it has 50% ownership in the Nkomati nickel mine, which produced 2,400 mt of nickel attributable to LionOre.
At Tati Nickel, LionOre is pursuing $620 million in growth projects, including the world’s first Activox refinery. These projects are targeted to lift Tati production to 22,000 mt/y of nickel cathode beginning in 2010.
The Activox process is essentially a combination of ultra-fine grinding and pressure oxidation in an autoclave under mild operating conditions. In LionOre’s flowsheet, the process precedes the conventional process technologies of solid-liquid separation, iron removal, solvent extraction, and electrowinning.
LionOre aquired the Activox technology in 1998 with an 80% stake in Western Minerals Technology, the developer of the process. An Activox demonstration plant has been operating continuously at Tati Nickel since mid-2004, producing high-grade nickel and copper cathodes and generating process and design information for the commercial-scale plant now under construction.