Poseidon CEO says the company could be at the centre of a perfect nickel storm
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Poseidon managing director and CEO Peter Harold reckons the company’s WA projects are at the centre of a perfect storm – poised to enter production in 2022 as nickel demand is forecast to soar.
“I think there is a supply shortage coming, I think we’re already seeing it now,” he said.
“There’s a strike on at Vale’s Sudbury operations in Canada and those can often go for a couple of months.
“And there’s issues in Indonesia with COVID and people not being able to get to work, and all of that puts pressure on production.
“At the same time, you’ve got strong demand for stainless steel and then there’s the whole electric vehicle ramp-up of demand.
“The numbers I’ve seen is nickel going from 2.5 million tonnes a year of annual demand in the world (for primary nickel) to over 9 million tonnes in 30 years.
“That’s a massive increase and I don’t know where all that nickel is going to come from.”
Harold said there would have to be sustained higher prices so that some of the lower grade projects (which have been around for years) could get financed and up and running.
“I see that potentially coming over the medium term – the next 2-5 years,” he said.
“I think there’s a really strong fundamental for short term, medium term and long-term pricing to be really good.”
Plus, the existing mines host existing infrastructure (including concentrators) and have exploration upside – with the Abi Rose discovery at Lake Johnson and the recent discovery of the Golden Swan mineralisation at Black Swan.
Harold said the company is in the middle now of a drill out program on Golden Swan that’s designed to get it to a maiden resource.
“That drilling will be finished at the end of July and then we can work out an average grade and come up with a resource.
“Then the mining engineers will hopefully come up with a mining resource, and we’ll determine the mine schedule – and give that information to potential ore purchasers – which is BHP because they’re the ones who can take the ore.
“We’re hoping to be in a position to make a decision on process mining and processing by the December this year, and if we go the direct shipping route that will take about six months to get it into production – so the middle of next year potentially.”
But the company has an ace up its sleeve, with the option to restart the small concentrator at Black Swan.
In fact, Poseidon could even make a nickel hub out of its projects – with Lake Johnston also having a processing plant.
“At Black Swan we’ve actually got three separate configurations, we’ve got the original old Silver Swan plant 150,000 tonnes, ideal for small volume high grade (Silver Swan and Golden Swan) we’ve got the 600,000-tonne plant which we could use for bringing down 500,000 tonnes of Windarra material.
“Or you’ve got the bigger plant at 2 million tonnes that would treat Windarra plus Black Swan open pit.
“So, you haven’t got one plant, you’ve got three effectively which can be reconfigured and they’re all in the one spot – effectively a hub if you like.
“And at Lake Johnson we’ve also got an ore body, a mine and a processing plant there so all we’ve got to do is dewater the mine and you can go straight back in and start mining.
“And people want nickel sulphide concentrate, so you’re going to produce the right product at the right time in a market that’s short feed – so it’s the perfect storm really.”