Ambatovy

Overview

Located in Madagascar, Ambatovy is a world-class, large tonnage nickel project that is positioned to be among the world's biggest lateritic nickel mines. Sherritt, the project operator, has a 40% ownership position, Sumitomo and Korea Resources each have a 27.5% stake, and the project's engineering contractor, SNC-Lavalin, has a 5% interest.

Ambatovy is a long-life lateritic nickel project with annual design capacity of 60,000 tonnes of nickel and 5,600 tonnes of cobalt. The mine life is currently projected to be 27 years. Ore characteristics, which are similar to those found at Moa, Cuba, combined with a similar hydrometallurgy operating process, position Sherritt to be a leader in the extraction of nickel and cobalt from lateritic ores using hydrometallurgy.

The Ambatovy mine site is located 80 kilometers east of Antananarivo (the capital of Madagascar) near the city of Moramanga. It is within a few kilometers of the main road and rail system connecting Antananarivo and the main port city of Toamasina on the east coast. The Project will consist of an open-pit mining operation and an ore preparation plant at the mine site. The slurried laterite ore will then be delivered via pipeline to a process plant and refinery located directly south of the Port of Toamasina.

Location

The Ambatovy mine site is located 80 kilometers east of Antananarivo, the capital of Madagascar, and lies within a few kilometers of the main road and rail system connecting Antananarivo and the main port city of Toamasina on the east coast. 

The property is inland from the east coast of Madagascar, and just a few kilometers off Route Nationale 2, the main road that runs between Madagascar's capital city of Antananarivo and the country's principal port of Toamasina. By road, the mine is about 150 km from the capital city, Antananarivo, and about 275 km from Toamasina.

Geology and Mineralization

The project is based on mining two ore bodies that are about three kilometers apart. The Ambatovy and Analamay deposits are both laterite nickel deposits formed by the leaching of the ultramafic portion of a large intrusive complex.

The deposit was identified in 1960, and has been the subject of several studies and drilling campaigns over the years. It covers an area of about 1300 hectares, with a thickness from 20 to 100 meters - average thickness is approximately 40 meters. 

More than ninety percent of the deposit is classified as ferralite, some of which is underlain by saprolite. A material type termed low magnesium saprolite (LMS) lies below the ferralite and between the ferralite and saprolite, where the latter is present. Only the ferralite and LMS have been considered in the mine plan. 

The distribution of the saprolite is erratic; consequently it has been classified as inferred, and is not included in the measured and indicated resource, although its exploitation may prove to be economic. 

Mining & Operation

There are two mining areas: Ambatovy and Analamay. Separate pits will be developed for each area. Mining will start in Ambatovy West, and then proceed to Ambatovy Southeast, followed by Analamay. 

Because of the soft nature of the ore, no blasting is planned, and it will be necessary to sheet the travel sections of the benches with suitable material. Pit slopes have been designed at a conservative 27 degrees. The mine plan is based on the use of hydraulic excavators and initially, 40 ton haulage trucks which are replaced by 100 ton trucks starting in year 3. Truck requirements start at 21 units in year 1 and increase to 25 units in years 8 through 11. 

Some 6.27 million tonnes of ore are scheduled for delivery to the ore preparation plant annually. On average this amounts to 17 500 t/d of ore. The total mine capacity starts at about 25 000 t/d, which allows for a 0.5: 1 strip ratio. The mining rate increases over time, and by year 6, the mining rate is about 50 000 t/d, or about a 2:1 strip ratio. The average strip ratio over the 20.5 year mine life is about 1.3: 1. 

Mine life is estimated to be 20.5 years, plus 6.5 years of stockpile recovery, giving a total production plan of 27 years.T 

Processing

At the mine site, run of mine ore will be delivered by trucks to the ore preparation plant. The ore will then be conveyed to a scrubber, similar to a high-speed autogenous mill, where water will be added to the ore to make slurry. 

A pipeline will be used to transport the ore as slurry from the mine site to the proposed plant site near the port of Toamasina. The 600 mm outside diameter pipeline will be approximately 220 km long. It is unlined steel pipe and has a capacity of 826 t/h of ore at 34 percent solids in aqueous slurry. A single pump station will be located at the mine, and most of the energy to operate the line will come from the natural gradient between the mine site and the plant site which has an elevation differential of approximately 1000 m. 

Pressure acid leaching of laterite ore will take place in five parallel process trains, each consisting of a feed tank, slurry heaters, pumps, an autoclave, and flash vessels. The ore slurry received from the thickener will be heated with steam in a series of direct heaters and pumped, continuously, into the autoclaves where it will react with sulphuric acid at 260 degree Celsius. Nickel, cobalt, copper, zinc, manganese, magnesium and a portion of the aluminum will be dissolved.

The pressure acid leach discharge slurry will be pumped to the slurry neutralization circuit, where a portion of the free acid will be neutralized with limestone in a series of three tanks. Partially neutralized slurry will be pumped to the countercurrent decantation (CCD) wash circuit. In the CCD wash circuit, the metals that have been leached into solution in the autoclaves are separated from residual solids in a series of six thickeners. 

The mixed sulphide produced from the Ambatovy ore is well suited to further refining into pure nickel and cobalt metals by conventional processing. 

Total recoverable metal over the production plan is estimated at 1.34 million t of nickel and 122,000 t of cobalt. Average annual production for the first 10 years - following the first 2 years of the 3 year ramp up period - is estimated at 59,080 t of nickel and 5,315 tonnes of cobalt. 

High pressure steam will be produced at the process plant by coal-fired boilers supplemented by steam produced in waste heat boilers in the sulphuric acid plants. There will be three coal-fired boilers and two sulphuric acid plant trains. The peak and average electrical power requirements for the process plant site of 81 MW and 65 MW, respectively, will be provided by three steam turbine generators. 

Water recovered from dewatering of the ore slurry delivered by pipeline from the mine will be the principal water source at the process plant. This will be augmented with water from the Ivondro River, which is south of the process plant site. 

The tailings management facility will be developed in three distinct phases: years 1 to 14, years 15 to 20, and the final years of operation to year 27. The tailings area will be progressively reclaimed through the life of the project. 

The tailings water management plan in such a high rainfall region involves containing supernatant and runoff so that it can be pumped back to the plant site, where a portion will be re-used in the process. The excess water will be decanted and pumped for discharge to the ocean in accordance with discharge parameters to be agreed for the project. The effluent, which is discharged to the ocean, will consist of neutralized process solutions that have been diluted by the high rainfall in the area. 

To minimize seepage from the water basin during normal operations, the dam will be constructed with a grout curtain and an HDPE liner will be installed on the inside face of the dam.

Environment & Community

The key aspects being addressed in the Environmental Assessment are social issues - particularly resettlement - the preservation and conservation of biodiversity, and final closure and reclamation of areas that will be impacted by the project. 


The neighboring Torotorofotsy Wetlands are the largest and most intact natural marsh in eastern Madagascar and are now a Ramsar site - wetlands of international importance. The mine site is in a near-primary forest matrix at the western edge of the Ankeniheny-Zahamena forest conservation planning area. 

There is a total of 127 flora species of concern at the mine site. Of this total, 53 species are currently listed in one of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) appendices, five are on the International Union for the Conservation of Nature (IUCN) list, and there are 68 others currently only known to occur in the Ambatovy/Analamay area. 

The most significant bird species was observed outside of the immediate mine area in the Torotorofotsy Wetlands. For mammals, nine lemur species were found in the mine area. All lemurs are endemic to Madagascar and seven of the nine lemur species observed are listed by IUCN. Endemic insects have also been discovered in the area. Fifteen fish species were collected from the mine area, of which three were endemic, eight introduced and four native - natural to Madagascar but also found elsewhere. 

During surveys of the mine site, three sacred waterfalls, three ceremonial centres, two symbolic tombs, and several ancient villages were found. Of these cultural resources, however, only one sacred waterfall is located within the actual mine footprint. 

With regard to the need for resettlement, work to date has identified that the largest area of impact will be the tailings area where initial surveys have identified that it will be necessary to resettle approximately 160 family units. 

Over the 30 year lifetime of the project, average direct employment of Malagasy labor is estimated at between 1,400 and 2,000 jobs annually. Money spent in Madagascar is estimated to be over US$100 million annually. In addition, an estimated annual average of US$25 million will be paid to the Malagasy government - duties, tax and royalties. 

Legislation in Madagascar requires a portion of royalties paid in relation to mining projects be directed to communes within which mineral resources lie. In addition, a portion goes to the provincial and national governments. 

Given the priority accorded to improving water management for farmers in the communes around the mine site, it is expected that the project will assist communes in this regard, as part of additional social investment.

The Ambatovy Local Business Initiative provides support to local entrepeneurs and works toward identification of local companies able to respond to the company's and market's needs.