The joint venture will develop the A$3.1Bn rated Kalgoorlie Nickel Project (KNP) in Western Australia.

Ardea Resources has entered into a binding Cooperation Agreement with Sumitomo Metal Mining (SMM) and Mitsubishi Corporation to advance the nickel and cobalt project, also known as the Goongarrie Hub located approximately 80km from Kalgoorlie. The JV, named Kalgoorlie Nickel Pty Ltd, will see the companies share the cost of A$98.5M (US$64.7M) to fund a DFS during Q2 2024 prior to taking a final investment decision (FID). SMM and Mitsubishi would claim a 40% and 10% stake respectively in partnership with Ardea should the project come into production.

KNP hosts resources totalling 854Mt at 0.71% Ni and 0.045% Co for 6.1Mt Ni and 386kt Co and is expected to produce 30ktpy Ni and 2kt Co over a 40-plus-year mine life. The project will utilise high-pressure acid leach (HPAL) technology and will leverage SMM’s expertise in hydrometallurgical processing of laterite ores. SMM already operates the Coral Bay and Taganito HPAL plants in the Philippines, which produce mixed sulphide precipitate (MSP) as feedstock for its nickel sulphate operations in Japan.

Reacting to the deal, Australia’s Minister for Resources, Madeleine King, highlighted that it demonstrated that Australian nickel projects could succeed economically. The news is a timely boost for Australia’s embattled nickel sector, which has seen closures and suspensions this year caused by weak prices brought about by a wave of Indonesian nickel units entering the market. However, highlighting the fragility of the industry, on the same day as Ardea’s deal was revealed, First Quantum Minerals (FQM) announced that it had closed the Ravensthorpe mine with the loss of 330 jobs.

The Ardea deal is also significant in that it represents two major Japanese companies seeking to secure nickel and cobalt supply from non-Indonesian and Inflation Reduction Act (IRA) compliant sources. SMM has been proactive in this regard, acquiring a 9.9% stake in Canada’s FPX Nickel at the beginning of the year. With Australia accounting for 4% of global mined nickel supply in 2023, compared to Indonesia’s 55% share, the race to secure non-Indonesian/Chinese nickel is continuing to heat up.