Anglo American has announced the approval of the Barro Alto nickel project in Brazil, at an estimated capital cost of US$1.2bn. Barro Alto will produce an average of 36,000 tonnes of nickel per year in the form of ferronickel over a minimum 26-year mine life.


Construction of the Barro Alto facilities is scheduled to begin in 2007 with production commencing in 2010 and ramping up to full capacity during 2011.


Barro Alto is located in the State of Gois in Brazil, about 170km northwest of Brasilia, 240km north of Goinia and 150km from Anglo American’s existing Codemin nickel operation.


The Barro Alto nickel deposit was discovered in the late 1960s and Anglo American completed its purchase of the deposit for US$35mn in 2002. A feasibility study was initiated in 2004 and completed in September 2006.


The deposit contains resources of 116.2mn tonnes, at an average grade of 1.54% nickel, of which 62.4mn tonnes at an average grade of 1.66% nickel will be mined by conventional open pit methods and treated over a 26-year period.


Part of the Barro Alto deposit is being mined to feed Anglo American’s Codemin plant in Niquelndia, Gois. Ore from Barro Alto is trucked to Codemin for processing in the existing facilities. This has successfully extended the life of Codemin and permitted an increase in production from 6,000 to 10,000 tonnes per year, allowing Codemin to benefit further from the strong nickel price. Barro Alto ore will continue to be transported to Codemin throughout the life of the newly approved Barro Alto project. The experience gained in mining and treating Barro Alto ore at Codemin significantly reduces the technical risk of the project.


The construction of Barro Alto will include extending the existing open pit mine operation and constructing a new ferronickel smelter and refinery. A long-term power supply has been secured. The operation will use tried and tested technology used by Anglo American at Codemin and Loma de Niquel in Venezuela.


Tony Trahar, CEO of Anglo American says: “The Barro Alto project is an exciting greenfield project in a country where Anglo American has longstanding nickel project management and operating experience. The production from Barro Alto will contribute significantly to a potential doubling of the group’s nickel production to around 90,000 tonnes per annum by 2011.


“The outlook for the nickel market is positive with strong demand continuing and this project provides an excellent opportunity to grow Anglo American’s position in this attractive market.”