Posted on 18 Mar 2025
Australian miner Pacific Nickel Mines has decided to temporarily cease operations for its Kolosori nickel project in Solomon Islands, Kallanish reports.
The move comes amid operational issues and the weak nickel price outlook in the short to medium term. It follows a review last July and an agreement with project financier Glencore. The companies agreed that the best short-term course of action would be to cease operations and review the project.
The major focus for Pacific Nickel, during this weak nickel price, was to improve mining operations and production efficiencies to ensure that the Kolosori site could achieve at least two shipments per month during the dry season to achieve 1.5 million tonnes/year of ore shipped.
However, the operation had been affected by a combination of factors in late June/early July, from low machine availability to bad weather, which also caused degradation of the haul road. These issues continued to impact the mining schedule at the Kolosori operation.
The ongoing effect of these issues on the operations is that the shipment scheduled for early July was then delayed until late July/early August. This meant that additional working capital was required for the project.
By the end of August 2024, the mining contractor had unavoidably been demobilised from site. During the last quarter of 2024, a local mining contractor was re-engaged to return to site to ensure compliance for the operation under its mining licence. One shipment of nickel ore was made late in the quarter to assist in the funding of those site activities, the company says in its interim financial report.
The Kolosori project was developed in 2023, shipping its first nickel ore in late December 2023. During the first half of 2024, the company was ramping up to full ore production of around 1.5m t/y.
Glencore provided a $22m loan facility for the development of the Kolosori. Pacific Nickel has worked in close collaboration with Glencore since the commencement of production.
Pacific Nickel has not yet started repayment of the Glencore loan as originally anticipated, and Glencore has reserved its rights concerning the project debt.
It is unclear when the project could resume operations.
Source:Kallanish
