Monsters of Rock: OZ Minerals' giant new nickel mine will be 'Net Zero' by 2040

Copper and gold miner OZ Minerals (ASX:OZL) has moved a step closer to developing the $1.1 billion West Musgrave nickel and copper sulphide project after receiving the endorsement of WA’s environmental watchdog.

The battery metals project is one of a handful of large nickel sulphide developments which could come online in the western world over the next decade to fill what will be a massive shortfall in supply for the blossoming battery and EV market.

It has been known about since the late 1990s when Western Mining first discovered the Nebo-Babel orebodies, but has laid dormant on account of its extremely remote location on the WA-SA border.

EPA approval, which is subject to a public appeal period and a final determination from WA’s Environment Minister Reece Whitby, will bring the large but low grade discovery one step closer to fruition.

One aspect that helped get OZ across the line was its promise to hit “net zero” by 2040.

Around 80% of the project’s power supplies will be provided by renewables over the project’s initial 26 year life with a 70-80MW wind farm, 40-50MW solar PV array and 20-30MW/25-35MWh battery storage system to be complemented by a 45-55MW installation of diesel gensets.

OZ has committed that West Musgrave’s Scope 1 emissions will drop from 196,500t CO2 equivalent a year from the start of construction in 2023 to a maximum of 156,000tpa from 2028, 75,000tpa from 2033 and zero from 2038.

The EPA says by reducing its Scope 1 emissions on a five yearly basis life of mine emissions will reduce 136% from 9.48Mt of CO2 equivalent to 4.06Mt with proposed mitigation measures.

As recently as last week OZ boss Andrew Cole flagged the challenges facing a final investment decision and DFS on the mine, which is due later this year.

He told analysts and media not to expect a resolution until the WA border reopened, saying key personnel needed to complete the work remain overseas or interstate.

A PFS released last December on West Musgrave, acquired in OZ’s takeover of Cassini Resources, showed it would produce 32,000t of copper metal and 26,000t of nickel metal in concentrates over a 26 year life.

OZ share price today:

Late rally pulls miners into green

A late rally pulled the ASX Materials sector to a 0.28% gain, with South32 (ASX:S32) leading the way at the big end of town after a big jump in aluminium prices overnight.

The ASX 200 lifted 0.59% to end the day in positive territory after spending much of the day underwater.

High spodumene and lithium chemical prices are also spurring interest in mid-cap lithium stocks.

AVZ Minerals (ASX:AVZ), which owns the monstrous Manono project in the Democratic Republic of the Congo, was up 6.21% while Liontown Resources (ASX:LTR) closed 6.18% higher at $1.46.

Core Lithium (ASX:CXO), which will open its Finniss lithium mine in the Northern Territory towards the end of 2022, was 4.67% higher while US-focused Ioneer (ASX:INR) rose 4.69% to 67c.