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IC 8988
Bureau of Mines Information Circular/1984
Nickel Availability— Domestic
A Minerals Availability Program
Appraisal
By D. A. Buckingham and Jim F. Lemons, Jr.
<^^k
UNITED STATES DEPARTMENT OF THE INTERIOR
Information Circular 8988
Nickel Availability— Domestic
A Minerals Availability Program Appraisal
By D. A. Buckingham and Jim F. Lemons, Jr.
-
UNITED STATES DEPARTMENT OF THE INTERIOR
William P. Clark, Secretary
BUREAU OF MINES
Robert C. Horton, Director
As the Nation's principal conservation agency, the Department of the
Interior has responsibility for most of our nationally owned public lands
and natural resources. This includes fostering the wisest use of our land
and water resources, protecting our fish and wildlife, preserving the
environmental and cultural values of our national parks and historical
places, and providing for the enjoyment of life through outdoor recreation.
The Department assesses our energy and mineral resources and works to
assure that their development is in the best interests of all our people. The
Department also has a major responsibility for American Indian reserva-
tion communities and for people who live in island territories under U.S.
administration.
Library of Congress Cataloging In Publication Data
Buckingham, 0. A. (David A.)
Nickel availability — domestic
(Information circular; 8988)
Bibliography: p. 26
Supt. of Docs, no.: I 28.27:
1 . Nickel industry— United States. 2. Nickel mines and mining— United States.
I. Lemons, Jim F. II. Title. III. Series: Information circular (United States. Bureau of
Mines); 8988
TN295.U4
[HD9539.N52U5]
622s
[333.8'53]
84-600039
PREFACE
To asses3 the availability of nonfuel minerals, the Bureau of Mines Minerals
Availability Program identifies, collects, compiles, and evaluates information on
producing, developing, and explored mines and deposits and on mineral processing
plants worldwide. Objectives are to classify domestic and foreign resources, to
identify by cost evaluation resources that are reserves, and to prepare analyses of
mineral availabilities.
This report is one of a continuing series of minerals availability reports that
analyze the availability of 34 minerals from domestic and foreign sources. Ques-
tions about the program should be addressed to Chief, Division of Minerals Avail-
ability, Bureau of Mines, 2401 E Street, NW., Washington, DC 20241.
CONTENTS
Page
Preface Hi
Abstract 1
Introduction 2
Minerals Availability Program evaluation
procedures 3
Deposit selection and verification 3
Economic evaluation 4
Nickel product form and cost-price analysis . . 5
Identification and quantification of domestic
nickel resources 6
Nickel sulfides 8
Missouri lead-zinc and cobalt-nickel sulfides . . 10
Nickel laterites 11
Seabed nodules 12
Engineering evaluation 12
Recovery of nickel from sulfides 12
Pyrometallurgical postmill processing 13
Hydrometallurgical postmill processing 13
Bureau of Mines chalcopyrite upgrade
process 13
Recovery of nickel from laterites 14
Pyrometallurgy 14
Hydrometallurgy 14
Page
Capital and operating costs for proposed
domestic nickel operations 15
Operating costs 15
Mine operating costs 15
Postmine process operating costs 15
Transportation costs 16
Capital costs 16
Potential domestic nickel availability 17
Primary and coproduct nickel deposits 17
Potential annual nickel availability 18
Byproduct nickel deposits 18
Factors that affect nickel availability 19
Effect of byproduct and coproduct revenues . . 19
Effects of energy and labor costs 21
Energy cost variations 21
Labor cost variations 22
Effects of variable nickel recoveries 22
Effects of transportation 23
Conclusions 25
References 26
Appendix 27
ILLUSTRATIONS
1. Distribution of nickel consumption by use as of June 1983 2
2. Minerals Availability System (MAS) program workflow 4
3. Classification of mineral resources 6
4. Comparison of total estimated domestic nickel resources with those included in this study 7
5. Distribution of demonstrated domestic nickel resources by ore type 8
6. Location of domestic nickel deposits 9
7. Location of proposed operations in Minnesota's Duluth Gabbro Complex and proximity to the Boundary
Waters Canoe Area 9
8. Location of Brady Glacier and Yakobi Island, AK, nickel sulfide deposits 10
9. Location of Crawford Pond, ME, nickel pyrrhotite sulfide deposit 1C
10. Location of Buick, Fletcher, and Magmont Mines in Missouri's lead-zinc Viburnum Trend 1C
11. Location of Madison Mine in Missouri's lead-zinc Viburnum Trend 11
12. Location of nickel laterite deposits in California and Oregon 11
13. Location of Cle Elum nickel laterite deposit 11
14. Total potentially available nickel from domestic deposits at identified and demonstrated resource levels 17
15. Annual production from domestic deposits at the demonstrated resource level, related to total cost of
production and year of production 18
16. Annual production from domestic deposits at the identified resource level, related to total cost of
production and year of production 19
17. Distribution of byproduct and coproduct revenues generated by each commodity produced from sul-
fide and laterite deposits 20
18. Comparison of total nickel availability with variations in commodity market prices 20
19. Distribution of direct operating costs by deposit type for domestic nickel deposits 21
TABLES
1. Properties reviewed in this study
2. Commodity prices used in this study
3. Nickel product forms
4. Domestic resource data of the 23 properties selected for availability analysis
CONTENTS — Continued
TABLES — Continued
Page
5. Identified nickel resources 7
6. Estimated domestic nickel resources by deposit type i 8
7. Estimated weighted average operating cost data for nonproducing domestic nickel operations .... 15
8. Estimated capital cost data for nonproducing domestic nickel operations 16
9. Total potential available nickel from domestic resources at selected total-cost-of -production ranges . . 17
10. Estimated annual availability of recoverable nickel for various years at an average total production
cost of $7.60 per pound nickel 18
11. Domestic nickel deposits containing at least 10,000 t of recoverable nickel 19
12. Comparison of total available nickel within various total-cost-of-production ranges at various levels of
byproduct and coproduct revenues , 20
13. Energy-related variations in potential available nickel from domestic nickel deposits 22
14. Labor-related variations in potential available nickel from domestic nickel deposits 22
15. Typical recoveries of nickel and coproducts from domestic resources, by metallurgical process and ore
type 23
16. Metallurgical recoveries used in this analysis 23
17. Effects of metallurgical recoveries on the potential availability of nickel over various total-cost-of-
production ranges 24
18. Distances, rates, destinations, and modes used in the transportation analysis 24
19. Transportation-related cost variations compared with the base analysis 24
20. Comparison of estimated total potential available nickel at various total-cost-of-production ranges
for transportation options 24
A-l. Ownership and type of mineral holdings of domestic nickel properties 27
UNIT OF MEASURE ABBREVIATIONS USED IN THIS REPORT
°C degree Celsius sq km square kilometer
ha hectare sq m square meter
km kilometer t metric ton
lb pound t/km metric ton per kilometer
m meter tr oz troy ounce
pet percent wt pet weight percent
psig pound per square inch, gauge yr year
NICKEL AVAILABILITY -DOMESTIC
A Minerals Availability Program Appraisal
By D. A. Buckingham 1 and Jim F. Lemons, Jr. 2
ABSTRACT
The Bureau of Mines evaluated potential availability of domestic nickel from
23 deposits. Evaluations included an estimation of in situ and recoverable re-
sources, applicable mining and processing technologies, and capital and operating
costs. Discounted cash flow analysis with a 15-pct rate of return was used to deter-
mine the average total cost of production of each operation. Identified in situ re-
sources contain 9.0 million metric tons (t) of nickel ; 5.5 million t is recoverable
as nickel metal or ferronickel. Demonstrated in situ resources contain 8.2 million t
of nickel ; 4.8 million t is recoverable as nickel metal or ferronickel. No nickel is
available at a total cost of production equal to the January 1983 market price of
$3.24 per pound. Analyses indicate that potential annual production can only meet
current consumption levels at a total cost of production of $7.60 per pound of nick-
el. Nickel's availability is contingent on (1) successful adaptability of nickel pro-
cessing methods to domestic resources, (2) location of a smelting facility, and (3)
marketability of byproducts and copro ducts. Analyses were performed on the
effects of byproduct and coproduct revenues, energy, labor, and transportation
costs, and metallurgical recoveries on nickel's availability.
1 Geologist.
3 Supervisory physical scientist.
Minerals Availability Field Office, Bureau of Mines, Denver, CO.
INTRODUCTION
Nickel is one of four strategic materials included
in the Defense Materials System (1, p. 621 ). 3 A strate-
gic material is a commodity whose lack of availability
during an emergency situation (embargo, cartel ac-
tion, or wartime) would seriously affect the economic,
industrial, and defensive posture of this country. The
purpose of the Minerals Availability Program's do-
mestic nickel availability analysis is to evaluate
potential domestic production of nickel, which could
decrease U.S. dependence on foreign sources. In 1982
the United States relied on imports for about 76 pet
of its nickel demand. Approximately 78 pet of these
nickel imports for 1982 came from four countries:
Canada, 41 pet; Australia, 16 pet; Botswana, 11 pet;
and Norway, 10 pet. Total estimated imports for 1982
were approximately 119,000 t of nickel (2, p. 1).
The Federal Emergency Management Agency
(FEMA) in 1982 established a stockpile goal for
nickel of 181,437 t. The existing Government stockpile
supply (November 1982), however, is only 29,220 t of
nickel, (3, p. 3), with 1982 yearend industrial stock-
piles estimated at 74,389 t (-4, p. 106) .
Nickel is a vital commodity to the United States
because of its extensive use as an alloy with other
metals. Eighty-five percent of all domestic nickel is
used in metal alloys. The steel industry accounts for
60 pet of all domestic nickel consumption (5, p. 1-2).
Nickel adds strength and corrosion resistance to metal
materials over a wide range of temperatures and pres-
sures. In addition to being used in standard steel
alloys, nickel is used in superalloys, various nickel and
copper alloys, magnetic alloys, and electroplating.
Nickel salts and nickel oxides are used as catalysts,
in batteries, fuel cells, and insecticides. Domestic uses
of nickel as of June 1983 are shown in figure 1 (6\
p. 2) . Consumption for 1982 was estimated at 157,850
t U, p. 106). The Bureau of Mines forecasts a 2.1-
pct annual growth rate through 1990 (8-4). This in-
crease is expected to be principally in the chemical
and petroleum-processing industries (7, p. 19-15).
Despite high consumption levels of nickel, the
United States has not developed a large domestic nickel
production industry. This lack of production capability
is due in part to secure foreign sources of nickel. The
only integrated mine-to-metal nickel producer in the
United States was Hanna Mining Co.'s Nickel Moun-
tain Mine near Riddle, OR, which was closed on April
19, 1982 (8), and subsequently reopened in late 1983.
Negotiations were held in 1983 to attempt to reduce
electricity costs to Nickel Mountain, and thereby en-
able resumption of production. This operation pro-
duced an estimated 11,000 t of nickel as ferronickel in
1981 and about 2,800 t in 1982 U, p. 106). The 1981
production amounted to about 6 pet of that year's
domestic consumption. AMAX Inc.'s Port Nickel Re-
finery at Port Nickel, LA, is the only domestic primary
nickel refinery. Port Nickel refines nickel matte from
Australia and Botswana. This refinery has a production
All other nickel products
4.0 pet
* Italicized numbers In parentheses refer to Items In the list of
references preceding the appendix.
Figure 1. — Distribution of nickel consumption by use as of
June 1983.
capacity of about 38,100 t of nickel metal per year.
Although some of the production is exported, most is
for domestic consumption (6, p. 1). About 1,000 t of
nickel is recovered annually as a byproduct from
domestic copper refineries (3, p. 7).
Initially, 36 nickel deposits in the continental
United States and Alaska were reviewed for possible
detailed analysis (table 1). (The appendix lists owner-
ship and control data for these properties.) Selection
of these nickel properties was based upon discussion
with Bureau of Mines commodity specialists and field
center personnel, industry, and academia. Properties
were included if sufficient information existed to de-
termine demonstrated and/or inferred resource ton-
nages and grades, and to propose mine and mill tech-
nologies. This study analyzes potential significant do-
mestic nickel resources to determine the average total
cost of nickel production and sensitivity of this cost to
changes in economic and engineering design pa-
rameters.
Sensitivity studies were conducted on the major
parameters that affect nickel availability, including
energy and labor costs. The cost of energy has become
a critical factor in all mining and processing opera-
tions, and high labor costs have caused ongoing min-
eral operations to be stopped and proposed ventures
to be delayed or abandoned. The impact of byproduct
and coproduct recovery on nickel availability was also
analyzed. Many of the domestic nickel deposits contain
cobalt, copper, gold, lead, silver, and zinc. These by-
product commodities, when recovered and marketed,
can produce important revenues that affect the eco-
Table 1. — Properties reviewed in this study
State and property name
Status 1
Ore type
Proposed mining
method
Primary
commodity
Proposed processing
method
Alaska:
Brady Glacier Explored
.do.,
.do.,
.do.,
.do..
.do.
.do.
do.
.do.
.do.
.do.
.do.
.do.
.do.
.do.
.do.
Funter Bay .
Mirror Harbor
Snipe Bay
Yakobi Island
California:
Elk Camp area
Gasquet Laterite
Little Rattlesnake Mountain.
Pine Flat Mountain
Red Mountain area
Maine: Crawford Pond
Minnesota:
Birch Lake area
Dunka River
Ely Spruce area
MINNAMAX
Partridge River
Missouri:
Annapolis Mine Past producer.
Bonne Terre Mine do
Brushy Creek Producer
Buick Mine do
Fletcher Division do
Indian Creek do
Madison Mine Past producer.
Magmont Mine Producer
Milhken Mine do
Mine La Motte Group Past producer.
West Fork Explored
Montana: Stillwater do
Oregon:
Eight Dollar Mountain do
Nickel Mountain Mine 2 Producer
Red Flat Explored
Rough and Ready do
Woodcock Mountain do
Washington:
Blewett Pass do
Cle Elum Iron-Nickel do
Mt. Vernon Nickel do
Sulfide .
..do...
..do...
..do...
. .do . . .
Laterite.
. .do . . .
..do...
..do...
..do...
Sulfide .
..do...
..do...
..do...
. .do . . .
. .do . . .
. .do . . .
..do...
..do...
..do...
..do...
..do...
..do...
..do...
..do...
..do...
..do...
..do...
Laterite.
. .do . . .
. .do . . .
. .do . . .
..do...
..do...
..do...
..do...
Underground
Surface
do
do
do
Nickel-copper
...do
....do
....do
....do
..do.
..do.
..do.
..do.
..do.
..do.
Nickel-cobalt .
..do
..do
..do
. .do
. .do
Surface-underground .
'.'.'.'.do'.'. '.'.'.'.'.'. '.'.'.'.'.'.
....do
....do
Nickel-copper
....do
....do
....do
....do
Underground
..do
..do
..do
..do
..do
..do
..do
..do
..do
..do
Surface
.do.
.do.
.do.
.do.
.do.
.do.
.do.
.do.
Lead-zinc
.do
.do
.do
.do
.do
Cobalt-nickel .
Lead-zinc
... .do
....do
....do
Nickel-copper
Nickel-cobalt .
... .do
....do
....do
....do
....do
... .do
... .do
Flotation.
Do.
Do.
Do.
Do.
Roast-reduction leach.
Do.
Do.
Do.
Do.
Flotation.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Roast-reduction leach.
Ferronickel-reduction.
Roast-reduction leach.
Do.
Do.
Do.
Do.
Do.
1 Status as of January 1981 .
2 Property closed as of April 1982, reopened in 1983.
nomic viability of the operation and thus the avail-
ability of nickel. In addition, a sensitivity analysis was
conducted on the effects of transportation costs of con-
centrates to selected postmill processing sites. Domes-
tic nickel availability is contingent upon the avail-
ability of smelting capacity. Additional smelting
capacity may be realized by construction of a domestic
facility or shipment of concentrates to foreign smel-
ters. In either event, transportation costs become a
critical factor.
The principal technological constraint is lack of
established commercially adaptable metallurgical meth-
ods for recovering nickel from domestic resources. At
present, most published recovery estimates for nickel
resources are based on a few bench-scale tests and
pilot plant operations. Reduction in the expected re-
covery of nickel that might occur in commercial
operations could significantly affect domestic nickel
availability. Current state-of-the-art metallurgical
technologies applicable to domestic nickel deposits are
complex. The sensitivity of the average total cost of
nickel production to these technologies was assessed.
MINERALS AVAILABILITY PROGRAM EVALUATION PROCEDURES
The procedure followed in evaluating the avail-
ability of domestic nickel from deposit identification
to development of economic availability is illustrated
in figure 2. The methods and procedures utilized in
deposit selection, verification, and economic evaluation
are detailed in the following sections.
DEPOSIT SELECTION AND VERIFICATION
From an initial review of 36 deposits, a final
selection was made of 23 properties to be included in
the availability analysis. All data on the 23 deposits
were verified, and all evaluation procedures were
standardized in order to ensure a comparable, consist-
ent analysis. Discussions with industry personnel indi-
cated that current economic viability can only be
achieved with properties capable of producing 10,000
t of nickel per year for a minimum mine life of 10 yr.
To ensure that all economic and most significant sub-
economic properties were included in this study, a
selection criterion of at least 10,000 t of in situ nickel
metal per deposit was established.
After selected properties were identified for analy-
Identification
and selection
Data
collection
l
Data
base
i
Data
utilization
Identification
and
j Mineral
. Indu st ries 1
j Location 1
System 1
1 (MILS) |
1 data j
MAS
computer
data
base
se 1 e ctlon
of deposits
• w
Tonnage
and grade
det e rmination
w
<
Enginee ring
and cost
eva 1 u ation
w
+
' i
Deposit
report
preparation
MAS
permanent (
deposit
files
'
i
r
Taxes,
royalties,
cost indexes,
prices, etc.
Data
verification and
va lidation
Variable and
parameter
adjustments
Economic
evaluation
Sensitivity
analysis
Dotal
Availabilityi
curves
Analytical
reports
J
w
Data
Availability
curves
Analytical
reports
Figure 2. — Minerals Availability System (MAS) program workflow.
sis, engineering and cost evaluations were performed.
Hanna Mining Co.'s Nickel Mountain Mine was con-
sidered a producer for this study. The actual designed
mining and milling production capacities and other
available production specifics (postmill processing)
for Nickel Mountain were utilized. Other properties
considered as producers included four Missouri lead-
zinc mines, where nickel and cobalt are presumed to be
recovered as byproducts. This recovery would be ac-
complished by utilization of a cobalt-nickel concentrate
circuit being investigated at the Bureau's Rolla (MO)
Research Center (9). Nonproducing properties were
evaluated using appropriate mining, concentrating,
smelting and/or refining methods, production rates,
and other parameters based upon current technology
and industry practice.
Tonnages and grades from actual measurements,
samples, and production data were used when avail-
able. Projections based on geologic evidence were
used when necessary. Information was obtained from
numerous sources, including the Bureau, the U.S.
Geological Survey, State publications, professional
journals, industry publications, annual reports, com-
pany 10K reports, and private communications.
Capital expenditures were calculated for explora-
tion, acquisition, mine development, construction of
the mine and mill, and purchase of mine and mill
equipment. These expenditures included engineering,
construction of buildings, costs of mobile and station-
ary equipment, facilities and utilities, and working
capital; environmental costs were included when
known. Facilities and utilities (infrastructure) is a
broad category that includes costs of access and haul-
age, power supply, and personnel accommodations.
Working capital, a revolving cash fund, pays for such
operating expenses as labor, supplies, taxes, and
insurance.
Total operating cost of each property was deter-
mined as a combination of direct and indirect costs.
Direct costs include operating and maintenance labor,
materials, payroll overhead, and utilities. Indirect
costs include administration, facilities, maintenance
and supplies, research, and technical and clerical labor.
Other costs in the analysis are fixed charges that
include taxes, insurance, depreciation, deferred ex-
penses, interest payments (if applicable), and a 15-pct
rate of return on invested capital.
If available, actual mining capital and operating
costs were used. However, when actual cost data were
lacking, costs were either estimated by standardized
costing techniques or derived from the Bureau's Capi-
tal and Operating Cost Manual, using the cost estimat-
ing system (CES) (10). Estimates based on this
system have shown an accuracy to within 25 pet of
actual costs.
In addition, postmill capital and operating costs,
or custom charges for nickel concentrate smelting and
refining, or ferronickel production were estimated.
Transportation costs were determined for mine to
mill, and mill to postmill processing facilities.
ECONOMIC EVALUATION
Once all engineering parameters and costs were
determined, data were entered into the Bureau's sup-
ply analysis model (SAM) (11). An economic evalua-
tion of each operation was performed using discounted
cash flow rate of return (DCFROR) techniques. This
evaluation determined a long-run average total cost
of production of the primary commodity (nickel) for
the life of each operation. The average total cost of
production, sometimes called incentive price, is equiva-
lent to a constant-dollar long-run price at which the
primary commodity must be sold so that the present
value of revenues over the operation's life equals the
present value of all costs of production, including a
prespecified rate of return on investment. The DCF-
ROR is most commonly defined as the rate of return
that makes the present worth of cash flow from an
investment equal to the present worth of all after-
tax investments (12). For this study, 15 pet was con-
sidered the necessary rate of return to cover the op-
portunity cost of capital plus risk.
All capital investments incurred 15 yr before the
initial year of the analysis (January 1983 U.S. dollars)
were treated as sunk costs. Capital investments in-
curred less than 15 yr before January 1983 had their
remaining undepreciated balances carried forward to
January 1983, with all subsequent investments re-
ported in constant January 1983 dollars. This method
generally results in determining a lower total cost of
production for currently producing operations, since
the total cost basis of producing operations is generally
less than that for nonproducers. Neither prices nor
costs were escalated because it was assumed that any
increase in price would be offset by an increase in cost.
A separate tax records file, maintained for each
State, contains relevant fiscal parameters under which
a mining firm would operate. This file includes cor-
porate income taxes, property taxes, and any royalties,
severance taxes, or other taxes that pertain to mining
and/or nickel production. These tax parameters were
applied to each mineral deposit under evaluation, with
the implication that each deposit represents a separate
corporate entity. The SAM system also contains an
additional file of economic indexes allowing for con-
tinuous updating of all cost estimates to the base date
of this study (January 1983).
Detailed cash flow analyses were generated for each
preproduction and production year of an operation,
beginning with the first. Upon completion of the indi-
vidual property analyses, all properties included in the
study were simultaneously analyzed and the data
aggregated onto nickel availability curves. The avail-
ability of the primary commodity (nickel) from each
operation is presented graphically in this study as a
function of the average total cost of production asso-
ciated with that operation. Availability curves are
aggregations of the total amounts of primary com-
modity potentially available from each evaluted de-
posit, ordered from deposits having the lowest average
total cost of production to those having the highest.
Total potential availability of the primary commodity
can be estimated by comparing an expected constant-
dollar long-run market price with the average total
cost of production (incentive price) shown on these
availability curves. Two types of availability curves
can be generated : total availability curves and annual
Table 2.— Commodity prices 1 used in this study
Commodity
January
1983
January
1982
Average
1980
Chromium per lb .
Chromite 2 per lb.
Cobalt per lb.
Copper per lb .
Gold pertroz.
Lead per lb.
Palladium per tr oz.
Platinum per tr oz.
Silver per tr oz .
Zinc per lb.
$110.00
$110.00
$110.00
.04
.04
.04
7.00
15.00
25.00
.788
.786
1.024
479.89
384.12
612.56
.22
.296
.425
110.00
110.00
212.88
475.00
475.00
438.33
12.40
8.03
20.84
.422
.386
.375
1 Prices based on data from various engineering and mining journals and the
Bureau's "Minerals and Materials."
2 Private communication; estimate made based on a laterite chromite
recovery feasibility study. Price per pound of 29.9 pet chromite concentrate.
availability curves. Annual curves can be constructed
as disaggregations of total availability curves based
on data for various total cost levels and/or specified
years. The following summarizes the assumptions
utilized in the evaluation process.
1. All commodities are marketed at their January
1983 prices (table 2) .
2. Specified discounted cash flow rate of return
(DCFROR) is 15 pet.
3. Each operation produces at full capacity
throughout its operating life.
4. Lag time between initiation of development
and full production status of nonproducing properties
is set at a minimum.
5. Hanna's Nickel Mountain Mine is considered a
producer.
6. Two domestic nickel smelters are presumed to
exist. One would be located near Duluth, MN; the
other would be associated with AMAX's Port Nickel
Refinery in Port Nickel, LA.
Item 4 is based upon the desire to determine po-
tential availability of domestic nickel in an emergency
or strategic situation (embargo, cartel, or wartime),
where the nickel supply would be threatened. Proposed
development plans allow minimum engineering and
construction time necessary to initiate production.
Time and potential costs involved in filing environ-
mental impact statements, receiving required permits,
financing, etc., have been minimized in all deposit
analyses.
NICKEL PRODUCT FORM AND
COST-PRICE ANALYSIS
Nickel is marketed in numerous product forms
(table 3) . Most products are priced according to their
nickel content; however, not all products receive the
same price per pound of contained nickel. Historically,
under normal market conditions, Inco's electrolytic
cathode nickel price is used as a benchmark (5, p.
VI-10). Ferronickel is priced at 6. pet less, Incomet at
10 pet less, and Sinter-75 at 15 pet less per pound
nickel than the benchmark price. The January 1983
nickel market price ranged from $3.20 to $3.29 per
pound for cathode nickel. The average spot market
price at the beginning of 1983 was approximately $1.92
per pound (18, p. 16). The analysis determined total
Table 3.— Nickel product forms
Product Nickel content, pet
Ores 1-2
Concentrates 10-15
Class I:
Electrolytic cathodes 99.9
Carbonyl pellets 99.97
Briquettes 99.9
Rondels 99.25
Nickel-89 99
Class II:
Ferronickel '40-50
229-38
Nickel Oxide Sinter (Sinter-75) 76 or 90
Incomet 94-96
Nickel salts 20-25
1 Inside the United States.
2 Outside the United States.
Source: World Bank (5).
cost of nickel production in constant 1983 U.S. dollars,
as either a ferronickel or cathode nickel product. All
proposed operations were costed to include any post-
mill processing to achieve marketable products. Analy-
sis also included a 6-pct reduction in value for nickel
contained in ferronickel.
IDENTIFICATION AND QUANTIFICATION OF
DOMESTIC NICKEL RESOURCES
Quantity and grade of nickel resources were
evaluated in relation to physical, technological, and
other conditions that would affect production from
each deposit. Resources are categorized according to
the latest mineral resource classification system de-
veloped jointly by the U.S. Geological Survey and the
Bureau of Mines (14, p. 5) (fig. 3).
Demonstrated resources (measured plus indi-
cated) are defined as those computed from site inspec-
tion, including outcrops, trenches, mine workings, and
drill holes. In situ grades of the demonstrated re-
sources are computed from detailed sampling. The
sites of inspection are spaced so that geologic charac-
ter, size, shape, depth, and mineral content can be
well established. Identified resources (demonstrated
plus inferred) include tonnages whose location, grade,
quality, and quantity are known or estimated from
specific geologic evidence.
Availability analyses were based on January 1981
resource estimates at identified and demonstrated
levels, which were updated to January 1983. As ex-
ploration and development yield additional knowledge
of grades and tonnages, resources may be reclassified
from the identified to demonstrated levels. Domestic
resources .that can be produced economically may in-
crease owing to exploration and technological improve-
ments that permit either mining lower grade resources
or processing materials previously considered waste.
In addition, changes in economic conditions have a
direct impact upon the classification of a mineral
resource.
The 23 properties chosen for detailed availability
Cumulative
production
IDENTIFIED RESOURCES
Demonstated
Measured
Indicated
Inferred
UNDISCOVERED RESOURCES
Hypothetica
Probability range
-(or)
Speculative
ECONOMIC
MARGINALLY
ECONOMIC
SUB-
ECONOMIC
Reserve
base
Inferred
reserve
base
+
+
Other
occurrences
Includes nonconventional and low-grade materials
Figure 3. — Classification of mineral resources.
analysis and their resource data are presented in table
4. Domestic identified, speculative, and hypothetical in
situ ore resources are reported to be nearly 12.6 billion
t containing 25.9 million t of nickel (15, p. 440).
Identified resources account for over 50 pet of this
Table 4.— Domestic resource data of the 23 properties selected
for availability analysis
Resource level, 1 Nickel grade,
_ million t wtpct
Operation -
Demon- Identi- Demon- Identi-
strated tied strated tied
SULFIDE
Alaska:
Brady Glacier A A W W
Yakobi Island 21 .0 21 .0 0.28 0.28
Maine: Crawford Pond 2 8.8 8.8 .91 .91
Minnesota:
Birch Lake area 1 ,985 1 ,985 .20 .20
Dunka River 131 131 .16 .16
Ely Spruce area 866 866 .21 .21
MINNAMAX A A W W
Partridge River 311 311 .20 .20
Missouri:
Buick Mine B B W W
Fletcher Division B B W W
Madison Mine B B W W
Magmont Mine B B W W
LATERITE
California:
Elk Camp area 15.2 .55
Gasquet Laterite 3 14.8 21.0 .75 .75
Little Rattlesnake Mountain 19.3 .55
Pine Flat Mountain 6.4 15.0 .80 .80
Red Mountain area A W W
Oregon:
Eight Dollar Mountain A W W
Nickel Mountain Mine A A W W
Red Flat 10.2 10.2 .80 .80
Rough and Ready A W W
Woodcock Mountain A W W
Washington: Cle Elum Iron-Nickel 4 . NA 6.0 NA .85
A Deposit contains more than 10,000 1 of nickel.
B Deposit contains less than 1 0,000 1 of nickel.
NA Not available. W Data withheld.
1 1n situ tonnage. 3 Reference 18.
2 Reference 17. "Reference 19.
Table 5. — Identified nickel resources
Resource Total domestic This study
Ore:
billion t 6.3 4.1
pet of total resources 1 50.3 32.7
Contained nickel:
million t 13.4 9.0
pet of total resources 51.7 35.0
1 Total resources (identified, hypothetical, speculative) are 12.6 billion t ore,
containing 25.9 million t nickel (15).
total, as shown in table 5 and figure 4. Resources of
the 23 studied properties are estimated at about 164
million t of ore at the inferred level and 3.9 billion t
at the demonstrated level, approximately 65 pet of
reported identified in situ ore tonnage. The 9 million t
of nickel contained in the studied properties is ap-
proximately 67 pet of reported identified contained
nickel.
Total domestic nickel ore resources account for
60 pet of the world's total nickel ore resources, ex-
cluding those of the centrally planned economy coun-
tries, but contain only 24 pet of the world's estimated
total nickel. This is a result of low average nickel
grades, approximately 0.21 pet, for domestic resources,
compared with an average grade of nearly 0.98 pet
nickel for the remaining world resources (1, p. 615;
5, p. II-5; 15, pp. 440-442; 16, p. 12).
Of the 23 properties studied, Hanna Mining Co.'s
Nickel Mountain Mine near Riddle, OR, had the only
mine-to-metal production of nickel (ferronickel) in
1981. Buick, Fletcher, and Magmont, near the town of
Buick, MO, are operating mines, producing lead, zinc,
and copper, with nickel and cobalt as potential by-
product commodities. For this study, they are proposed
as potential producers of nickel and cobalt as by-
products. The Madison Mine in Missouri is a past
NICKEL RESOURCES
CONTAINED NICKEL
Identified resources
50.3 pet
Inferred resources
included in this study
1.3 pet
Identified resources
51.7 pet
Inferred resources not
included inthis study.
16.7 pet yr inferred resources
included in this study
3.1 pet
Figure 4. — Comparison of total estimated domestic nickel resources with those included in this study.
Table 6.— Estimated domestic nickel resources by deposit type,
million metric tons
Nickel- Nickel-cobalt
cobalt and nickel-
laterites copper sulfides
Primary
lead-zinc
Total
In situ resources:
Demonstrated 56.8
Identified 163.7
Contained nickel:
Demonstrated .39
Identified 1.16
Recoverable resources:
Demonstrated 55.1
Identified 139.1
3,764
3,764
123.9
131.4
3,944.7
4,059.1
7.8
7.8
.05
.05
8.2
9.0
3,138
3,138
129.2
136.9
3,322.3
3,414.0
producer of cobalt, with nickel and copper as by-
products. The remaining properties include 11 nickel-
cobalt laterites: 5 in California, 5 in Oregon (includ-
ing Nickel Mountain), and 1 in Washington; and 8
nickel-copper sulfides: 2 in Alaska, 1 in Maine, and 5
in Minnesota.
Table 6 lists the studied resource tonnage by ore
type. Figure 5 indicates the large nickel resource in
nickel-copper and nickel-cobalt sulfides. These deposits
account for over 95 pet of the in-place tonnage, having
about 87 pet of the contained nickel at the identified
resource level, and nearly 95 pet at the demonstrated
resource level.
Laterites account for 1.4 pet of the in-place ton-
nage and nearly 5 pet of the contained nickel at the
demonstrated resource level. At the identified resource
level, they have about 4 pet of the in-place tonnage
and 13 pet of the contained nickel. Lead-zinc sulfides
account for an average of 4.2 pet of the in-place
tonnage and about 1 pet of the contained nickel re-
source at both classification levels.
Domestic nickel deposits occur as sulfides and
laterites (oxides). A description of the geology for
the studied deposits follows. Figure 6 shows the loca-
tion of the 23 properties evaluated in this study.
NICKEL SULFIDES
Of the properties studied, sulfide deposits contain
nearly 95 pet of the demonstrated nickel resource.
With an average nickel grade of 0.2 pet, they account
for nearly 94 pet of the recoverable nickel resources.
Minnesota's Duluth Gabbro Complex (fig. 7) is
one of the world's largest basic igneous intrusions and
contains the largest demonstrated nickel sulfide re-
sources in the United States, more than 3.7 billion
t. The intrusion covers an area of 6,470 sq km, of
which 1,450 sq km has been explored in northeastern
Minnesota (20, p. 48). This explored region contains
an estimated 3.1 million t of potentially recoverable
nickel. The Precambrian intrusive generally consists
of strongly layered gabbros.
Mineralization is thought to result from mag-
matic differentiation of the intrusion during crystalli-
zation. The Gabbro's northwestern margin near Hoyt
Lakes, Babbitt, and southeast of Ely contains recover-
able concentrations of nickel and copper. An inclined
layered ore zone several meters thick, 50 to 60 km
long, and 1.6 to 3 km wide at the surface, has been
traced as far as 1.6 km beneath the surface (21, pp.
NICKEL RESOURCES
CONTAINED NICKEL
Lead-zinc sulfides
3.5 pet
Nickel-cobalt laterites
1.4 pet
Lead-zinc sulfides
0.6 pet
Nickel-cobalt laterites
4.7 pet
Figure 5. — Distribution of demonstrated domestic nickel resources by ore type.
F '
Birch Lake, .E'yjSpruce
Dunko River°oMlNNAMAX
TPartridge River
"~"oNickelMtn^-
Re'd Flat Eight Dollar Mtn
I ° o° I
Rough and Ready "Woodcock Mtn
I oPine Flat Mtn
<^asqueto oE | k C arnp
"Rattlesnake Mtn
Figure 6.— Location of domestic nickel deposits.
Figure 7. — Location of proposed operations In Minnesota'*
Duluth Gabbro Complex and proximity to the Boundary
Waters Canoe Area.
1-3) . The principal nickel mineral is pentlandite asso-
ciated with copper minerals of chalcopyrite and cu-
banite. The average nickel-to-copper grade ratio is
1 to 3, with localized areas of higher and lower con-
centrations. Minor amounts of cobalt in the mineral
cobaltite and platinum-group metals are also present.
Birch Lake, Dunka River, Ely Spruce, Partridge River,
and MINNAMAX are properties in the Duluth Gabbro
that have attracted interest concerning potential de-
velopment. These properties are in various stages of
exploration programs (drilling, magnetic surveys,
small test pits, outcrop sampling, etc.). Two of these
deposits (Ely Spruce and MINNAMAX) have been
explored extensively by shafts, with removal of large
bulk ore samples for metallurgical testing. None of
these properties are currently in production.
The Brady Glacier and Yakobi Island deposits of
Alaska (fig. 8) are also associated with ultramafic
intrusions. Brady Glacier is a vertically oriented cy-
lindrical deposit with maximum dimensions of 518 m
in diameter and 229 m in length, occurring in the
Crillon-La Perouse gabbroic intrusive. Yakobi Island
is a synclinal-shaped deposit covering approximately
94,000 sq m. Ore mineralization is primarily dissemi-
nated pentlandite with chalcopyrite and cubanite. Ex-
ploration work (drilling, small test pits, outcrop sampl-
ing) has occurred on these properties, and some pre-
liminary mining plans have been proposed.
The Crawford Pond, ME, sulfide deposit (fig. 9)
is believed to be of magmatic origin. A peridotite host
rock intruded Cambrian age schists and was itself
10
LEGEND
• Nickel sulfide deposits
r.v.'rl Glacier within the monument
Glacier Bay monument boundary
Figure 8. — Location of Brady Glacier and Yakobi
island, AK, nickel sulfide deposits.
LEGEND
£3 Nickel sulfide
Figure 9. — Location of Crawford Pond, ME, nickel
pyrrhotite sulfide deposit.
subsequently intruded by a pegmatite, resulting ii
concentrations of nickeliferous pyrrhotite. Nickell
ferous pyrrhotite occurs as disseminated masses ir.
peridotite-pyroxenite of Devonian age. This deposil
underlies an area approximately 8.5 km long and 1.26
km wide. In the vicinity of Crawford Pond, average
depth to mineralization is 53 m, with an average
deposit thickness of 23 m. The principal nickel mineral
is pentlandite. Nickel is also present in millerite,
gersdorffite, and niccolite. The major copper-bearing
mineral is chalcopyrite and the cobalt-bearing mineral
is cobaltite. This deposit contains approximately 9.0
million t of demonstrated resource containing 0.91
pet nickel, 0.45 pet copper, and 0.04 pet cobalt at the
demonstrated level (17, p. 124).
If one or all of the Brady Glacier, Crawford Pond,
and Duluth Gabbro Complex deposits are developed,
major environmental concerns will be encountered.
The Brady Glacier deposit is under a glacier in Glacier
Bay National Monument. According to the National
Monument Act of 1936, only mining activity necessary
to remove the minerals is allowable. This may limit
on-site milling.
A small portion of the Crawford Pond deposit,
which was excluded from this study, lies under Craw-
ford Pond. This pond would have to be drained to
extract the entire Crawford Pond resource. Economy
in the area of Crawford Pond is predominantly agri-
culture, which is dependent on an adequate and safe
water supply. Water quality standards would have to
be complied with to protect owners of surrounding
farms and cottages.
The Duluth Gabbro Complex extends into the
Boundary Waters Canoe Area (BWCA). Proposed
mines in this complex are within a few miles of the
southwest boundary of this wilderness. Precautions
for water quality, air emissions, and land reclamation
would have to be considered in order to ensure ade-
quate protection of the BWCA. Because of these re-
quirements, a smelting complex would probably not bp
located in the immediate vicinity (22-23), but closer
to Duluth, MN.
MISSOURI LEAD-ZINC AND
COBALT-NICKEL SULFIDES
The four deposits evaluated in Missouri occur in
the Viburnum lead-zinc trend (figs. 10-11) as strati-
form ore in narrow carbonate bar and algal reef
sedimentary environments. The principal nickel min-
eral is siegenite, a nickel-cobalt sulfide. Principal
copper, lead, and zinc minerals are chalcopyrite, ga-
lena, and sphalerite, respectively. These mines have
R3W R2W BIW *'£ B2E
LEGEND
^f Mines
•S^Viburnum Trend
|~\ I
Figure 10. — Location of Bulck, Fletcher, and Magmont
Mines In Missouri's lead-zinc Viburnum Trend.
u
Figure 11. — Location of Madison Mine in Mis-
souri's lead zinc Viournum Trend.
been operational for a number of years; nickel ex-
traction would require an additional flotation concen-
tration step, but no additional environmental con-
siderations.
NICKEL LATERITES
Nickel laterites result from a gradual decomposi-
tion due to the combined action of mechanical and
chemical weathering of ultrabasic rocks, particularly
peridotite in which nickel, for the most part, is con-
tained in the mineral olivine. As nickeliferous olivine
decomposes, nickel is released and mobilized into solu-
tion by downward percolation of rainwater and/or
movement of ground water. Nickel is redeposited at
depth by chemical precipitation. This repeated action,
known as laterization, results in a "zone of enrich-
ment," which, in some cases, can be mined (24) .
There are two types of lateritic nickel ores, those
which are primarily siliceous, termed garnieritic or
saprolitic, and nickeliferous limonitic laterite. Gar-
nieritic laterites contain less than 30 pet iron, about
30 pet silica, and a high nickel grade, generally ex-
ceeding 1.5 pet. Garnieritic ores are desirable for
ferronickel production because of their low iron, high
magnesia, and high nickel content. Iron-rich limonitic
laterites form when leaching of nickel is not as favor-
able or complete as it is with garnierites, resulting in a
mixed iron-nickel zone. Limonitic laterites containing
approximately 50 pet iron and about 1 pet nickel are
amenable to hydrometallurgical processing methods.
Because of various degrees of laterization, field classi-
fication of laterites is often subjective. Most domestic
laterites contain large amounts of limonitic and sili-
ceous (garnieritic) mineralization; however, garnieri-
tic laterites are slightly more abundant. Location of
domestic laterite deposits are shown in figure 12
(California and Oregon) and figure 13 (Washington).
Laterites account for about 2 pet of recoverable dem-
onstrated nickel ore and 9 pet of recoverable nickel
metal from demonstrated resources.
Jl
JlOlJ
Canyonville'a'^*-. -.
(401 J.
$e V£}
S\ */
11 y
(VWedderb
L^AI
um fAAPoss
. ft''
0H3
3^|
■n 11
O \V
(\ d
9M OflLGON
k^ / CALIFORNIA
Cresc en ffirM
J|5 /J^ 5 *©*
Cityftf£k ™
1 i/TOrleons
o \\
1 v '
^•ft. ^- / ^-
VV*
\ T^
/ ioiJ y-
A
^r »
I 6%,
Leggett^^ \^
\r~^*\^ T"
.11 YTDosRios
LEGEND
fg) Lateritic deposits
J Nickel Mountain
2 Red Flat
3 Eight Dollar Mountain,
Rough and Ready.
Woodcock Mountain
4 Pine Flat Mountain.
Gasquet,
Elk Camp
5 Rattlesnake Mountain
6 Red Mountain
Figure 12. — Location of nickel laterite deposits in Cali-
fornia and Oregon.
Proposed %-
•plontsife °
•-ox ™» N
LEGEND
1 Laterite deposit
tin
\ WASHINGTON I
M- 1 -
^~r
Figure 13. — Location of Cle Elum nickel laterite deposit
The only operating domestic nickel mine is Hanna
Mining Co.'s Nickel Mountain Mine near Riddle, OR
(8) . This deposit measures 2 by 1.2 km, with a vary-
ing depth of mineralization of up to 67 m, averaging
18 m (25, p. 181). Garnierite is the principal nickel
mineral, occurring as fillings in veinlets and boxworks.
Nickel grades vary throughout the deposit, averaging
less than 1.0 pet.
The Gasquet deposit of northwest California has
been subjected to exploration, feasibility studies, and
some initial development. Production was originally
12
scheduled to begin in the spring of 1982 (18) but has
been delayed. Total resources are estimated at 36
million t covering about 1,200 ha of the site in a
surface layer of soil about 7 m deep. Garnierite is the
principal nickel mineral; cobalt and chromium are also
present. Average grade of the deposit is about 0.75
pet nickel, 0.01 pet cobalt, and 2.0 pet chromium.
The remaining domestic laterites are similar in
character to the deposits described, varying principally
in size. Most of them have smaller tonnages, with
average nickel grades varying from less than 0.50 pet
to about 1.0 pet nickel. They also contain chromium
and minor amounts of cobalt.
Potential environmental problems associated with
laterite developments are mainly short term for most
evaluated domestic deposits. Proposed minesites are
out of sight of major highways in the area. Soil would
be better suited for vegetation when treated and re-
placed after mining. Surface water drainage would be
altered for the short term, but water quality would be
maintained by pollution-control equipment at the site.
Air quality would not be greatly affected by mining or
processing, but significant noise would occur near the
site. A potential problem may exist in developing the
Gasquet laterite deposit, portions of which are within
a RARE II study area.
SEABED NODULES
Significant quantities of nickel occur in seabed
nodules, commonly known as manganese nodules.
Nodules of economic interest range from pea to base-
ball size and occur over large areas of the ocean floor
from 900 to 6,000 m below sea level. Highest concen-
trations occur in the central East Pacific Ocean from
0° to 20° north latitude and 120° to 180° west longi-
tude (26, p. 73).
Recent resource estimates are placed at 2.1 billion
dry metric tons of recoverable nodules averaging 25
pet manganese, 1.25 pet nickel, 0.75 pet copper, and
0.25 pet cobalt (27, p. 1), with minor amounts of gold,
silver, and molybdenum.
Main deterrents to near-future development of
these resources are international politics involving
jurisdiction over deposits, poor economics resulting
from low metal prices, and very high projected capital
and operating costs. Seabed nodules may be a signifi-
cant source of nickel, and other commodities in the
long-range supply situation; however, owing to the
unpredictable future of these deposits, these resources
are not included in this study.
ENGINEERING EVALUATION
Nickel is mined by both surface and underground
methods according to the physical and structural
characteristics of each deposit. Surface methods in-
clude open pit mining similar to open pit copper mines
or surface cuts similar to bauxite strip mines. Under-
ground methods include room-and-pillar or cut-and-fill
mining methods, or a combination of the two. In
some cases a combination of open pit and room-and-
pillar methods were used. Proposed and actual opera-
tion schedules for mines and deposits in this study
range from 200 to 350 days per year, with daily ore
production running from 2,000 t to 40,000 t and yearly
ore production from 265,000 t to 14 million t.
Adaptability of known processing methods to
domestic resources is a major area of concern in this
availability analysis. The only domestic commercial
operation for primary recovery of nickel was Hanna
Mining Co.'s ferronickel operation at Riddle, OR.
Principal technologies used in this evaluation are
detailed in following sections. Sensitivity analyses on
the total cost of producing nickel were performed by
varying the nickel recovery rate for the principal
nickel processing technologies described below.
RECOVERY OF NICKEL
FROM SULFIDES
Sulfide ores can often be concentrated by flotation
methods. Nickel from these concentrates is then re-
covered by pyrometallurgical processing followed
by hydrometallurgical methods, although totally
hydrometallurgical methods are available and adapt-
able. Two typical flotation methods are bulk or single-
stage flotation and differential or multistage flotation.
Bulk flotation removes both nickel and copper, along
with other minor constituents, i.e., cobalt, gold, silver,
and platinum, as a single concentrate. This concentrate
can then be processed to separate nickel and other
constituents. In differential flotation, the feed is sepa-
rated into a nickel-copper concentrate and a copper
concentrate containing most of the other minor sul-
fides. These two separate concentrates can then be
sent to smelters and refiners for individual processing.
Average metallurgical recoveries for bulk and differ-
ential flotation are typically 70 pet and 65 pet, re-
spectively, for nickel, 88 pet for copper, and 50 pet for
cobalt.
Proposed beneficiation of sulfide ore is by flotation
to produce a nickel, nickel-copper, or nickel-cobalt
concentrate. Nickel would be recovered from these con-
centrates by smelting and matte refining or by hydro-
metallurgical methods. Because of the ore metallurgy,
Alaskan and Minnesotan deposits were evaluated using
a bulk flotation method, and Crawford Pond, a high
nickeliferous pyrrhotite ore, was evaluated using a
differential flotation method. An analysis comparing
recovery of nickel from bulk and differential flotation
methods is discussed in a later section, "Effects of
Variable Nickel Recoveries."
13
Pyrometallurgical Postmill Processing
Nickel sulfide concentrates are processed to matte in
three pyrometallurgical stages : roasting, smelting, and
converting. Roasting is applied to concentrates that
contain more iron than nickel and serves as a prepara-
tory step to smelting. Roasting is accomplished by
heating concentrates, in fluid-bed or multihearth
roasters, in air or an oxygen-enriched atmosphere
to form solid oxides called calcine and gaseous sulfur
dioxide. Roasting also preheats the material prior to
smelting (25, p. 231).
Smelting of this roasted concentrate, in the pres-
ence of silicate fluxing materials, yields a sulfide phase
containing nickel and copper (furnace matte) , and an
immiscible liquid iron silicate slag. Smelting is car-
ried out using flash smelting or electric smelting
techniques. Flash smelting involves injection of a
roasted concentrate and flux with oxygen or preheated
air into the furnace chamber. Smelting temperatures
are produced by the instant "flash" combustion of iron
and sulfur. Concentrates are thus made to smelt them-
selves. Electric furnace smelting operates on the sub-
merged arc principle, using either prebaked or self-
baking Soderberg electrodes. Smelting is accomplished
by passing an electrical charge through the feed con-
centrate. The resistance created produces heat, thus
melting the material and producing the desired separa-
tion.
Conversion oxidizes iron and sulfur and eliminates
any remaining iron sulfide from the furnace matte.
Conversion is generally carried out in horizontal side-
blowing converters (Peirce-Smith converters). Using
air or oxygen-enriched air and the addition of siliceous
fluxing material, a "finished" Bessemer matte is pro-
duced. More recently, the trend has been toward using
top-blowing rotary converters (TBRC) where oxygen
is blown into a converter, oxidizing the molten nickel
sulfide directly to nickel metal. If TBRC's are not
used, a nickel-copper converter matte must be sepa-
rated into its nickel and copper sulfide phases prior to
refining.
There are several ways to separate converter
matte into its constituent phases. Inco's controlled
slow-cooling method rests on the principle that slow
cooling of sulfur-deficient matte creates conditions
necessary for the formation of segregated mineral
crystals and permits their growth to an adequate size.
Coarse crystals of nickel sulfide, copper sulfide, and
nickel-copper alloys are obtained. Matte can then be
separated into concentrates of nickel sulfide, copper
sulfide, and nickel-copper alloys containing precious
metals, using conventional beneficiation methods.
Nickel sulfide concentrates can then be dead-roasted
to yield nickel oxide (25, pp. 275-283).
Hydrometallurgical
Postmill Processing
Hydrometallurgical methods have become an im-
portant and widely accepted method for extraction
and recovery of nickel and byproduct metals from
nickel mattes and sulfide concentrates. The principal
aim of hydrometallurgy is to selectively leach desired
metals into an aqueous phase, separating them from
unwanted material.
A hydrometallurgical process used at AMAX's
Port Nickel, LA, refinery produces cobalt, copper,
and nickel metals along with fertilizer-grade am-
monium sulfate from nickel-cobalt and nickel-copper
mattes. After crushing, grinding, and blending of the
matte, leaching occurs in four separate operations.
The first stage is an atmospheric leach where most of
the undissolved copper and iron are separated from
the cobalt and nickel solution. Residue is sent to a
two-stage pressure leach where iron is removed. The
pressure leach solution i3 then sent to a copper electro-
winning circuit; spent solution is recycled through the
two-stage pressure leach. From the atmospheric leach-
ing stage the nickel-cobalt solution is sent to a cobalt
separation circuit. Cobalt is precipitated as an impure
cobaltic hydroxide, at atmospheric pressure at about
60° C in the presence of trivalent nickel hydroxide.
Impure cobaltic hydroxide is processed to remove any
remaining nickel as a nickel ammonium sulfate salt,
which is separated from the solution, redissolved, and
returned to the nickel-cobalt separation step. Purified
cobalt solution is treated with hydrogen gas; cobalt
metal is precipitated and packaged as powdered and/
or compacted-sintered products.
To recover nickel metal, the remaining nickel
sulfate solution requires a series of delineation steps
using hydrogen gas at elevated temperatures and pres-
sures. Metallic nickel is precipitated, then packaged
as powdered and/or compacted-sintered products.
Ammonium sulfate tail liquor from both the nickel
and cobalt densification stages is passed through ion
exchange columns to remove any residual metals. Puri-
fied solution is evaporated producing a blending-grade
ammonium sulfate product (28).
Another hydrometallurgical process, used by Sher-
ritt Gordon Mines Ltd., Toronto, Canada, at its plant
in Fort Saskatchewan, Alberta, can be applied directly
to some cobalt, copper, and nickel sulfide concentrates,
eliminating in most cases the need for smelting. In
this process, concentrates are leached in strong
aqueous ammonia solution at moderately elevated tem-
perature and pressure. Good extractions are obtained
within a temperature range of 890° to 1,060° C and at
100 to 150 psig, using air for oxygen supply. Leach
solution is then boiled to recover part of the ammonia
and precipitate copper as sulfide. Partially oxidized
unsaturated sulfur species are converted to sulfate ions
before nickel and cobalt are recovered as pure metal
powders by reduction with hydrogen gas under 500
psig. In addition to metal powder and copper sulfide
products, ammonium sulfate is produced for sale as
fertilizer (29). Concentrates with high arsenic con-
tent require a roasting step before leaching (SO, p. 12) .
Bureau of Mines
Chalcopyrlte Upgrade Process
Sulfide deposits of the Missouri lead-zinc district
contain nickel and cobalt. However, at present these
metals are lost in tails and slag after processing for
copper, lead, and zinc. The Bureau's Rolla (MO) Re-
search Center has investigated a chalcopyrite upgrade
14
process that separates a chalcopyrite (copper) con-
centrate into upgraded chalcopyrite and cobalt-nickel
concentrates. This process consists of the following
steps :
1. Grinding the chalcopyrite concentrate in a
closed circuit.
2. Adding flotation reagents diethyl dithiophos-
phate (collector), sodium cyanite (depressant), and
methyl isobutyl carbinol (frother) to the hydro-
cyclone discharge, and recovering copper concentrate
from a second cleaner cell.
3. Recovering the cobalt-nickel concentrate as a
sink product from scavenger cells.
4. Dewatering the cobalt-nickel concentrate to a
final moisture content of approximately 10 pet.
Nearly 83 pet of the nickel and 81 pet of the
cobalt in the chalcopyrite concentrate entering the
cobalt-nickel circuit were recovered in the final cobalt-
nickel concentrate. Overall recovery, however, is only
20 pet since only about 24 pet of the nickel and cobalt
contained in the ore are recovered in the chalcopyrite
(copper) concentrate (80, p. 12).
RECOVERY OF NICKEL
FROM LATERITES
Both pyrometallurgical and hydrometallurgical
methods are employed in recovering nickel from
laterites. The method most applicable depends upon ore
mineralogy. Little upgrading occurs except for sizing
and drying. Thus, most of the recovery methods must
treat a total mined tonnage, ore and waste, rather
than a concentrate.
Pyrometallurgy
Pyrometallurgy is generally used to treat low-
iron, high-magnesia garnierites with high nickel con-
tent, such as exist at Nickel Mountain Mine near
Riddle, OR. Nickel recoveries of 90 pet are typically
achieved. In order to produce a ferronickel product
containing 20 to 50 pet nickel, four steps are involved :
drying, calcining (with or without prereduction),
smelting, and refining. Drying can be achieved sepa-
rately or as an initial stage of calcination. A multiple-
hearth furnace or a fluid-bed unit is normally used for
calcination. Smelting requires a very specific feed
composition through strict grade control and ore blend-
ing to attain proper slagging and reasonable energy
consumption. The charge is melted, forming slag
(discarded) and ferronickel phases. This ferronickel
phase is tapped at 1,500° C, for further refining by
desulfurization and oxidation of other metal impuri-
ties. After refining, the ferronickel is cast into "pigs"
for sale. Cobalt, "locked" in the ferronickel, cannot be
recovered using this process.
In another process, matte smelting, the same se-
quence of steps is followed as in ferronickel reduction,
except that sulfur or a sulfur compound (generally
gypsum or pyrite) is injected into the feed before
smelting. The smelter charge is melted at a tempera-
ture above 1,350° C in the presence of coke and the
sulfur source, producing nickel matte containing 75 pet
nickel, which is then refined by techniques similar to
sulfide matte separation. Cobalt can be recovered dur-
ing refining of the nickel matte.
Hydrometallurgy
For this report, recovery of nickel by leaching
processes is proposed for all California and Oregon
laterites except Nickel Mountain where the ferronickel
plant currently exists. Two general processes exist:
a reduction roast-ammoniacal leach (RRAL) process
and a sulfuric acid leach process. Domestic laterites
tend to have a high magnesia content. This precludes
using a sulfuric acid process on domestic laterites
evaluated in this study.
Freeport Nickel Co. developed the original RRAL
process in the mid-1940's for use in their plant at
Nicaro, Cuba. Modified versions of the original RRAL
process, also called the Caron process, are now active
in Greenvale, Australia, and Nonoc Island, Philippines
(SI).
Steps of the Caron process include (1) drying,
(2) grinding, (3) selective reduction, (4) ammonia
carbonate leaching, (5) separation of cobalt, (6) nickel
carbonate precipitation and ammonia recovery, and
(7) calcination to produce nickel oxide. The selective
reduction step occurs in multiple-hearth roasters at
about 700° to 760° C, in a reducing atmosphere of
hydrogen and carbon monoxide gas.
Limitations to this process are low recovery of
nickel and cobalt from saprolite ore fractions and the
cost of fuel. Modified processes used in Australia and
the Philippines have enhanced nickel and cobalt re-
coveries ; however, nickel recovery remains low (60 to
65 pet) ; 9 to 15 pet of the nickel is recovered with
cobalt as a nickel-cobalt sulfide. Further refining is
required to separate and recover nickel and cobalt as
separate products (82, p. 30) .
Bureau of Mines researchers at the Albany (OR)
Research Center investigated an RRAL process that
incorporates (1) selective reduction in an atmosphere
of carbon monoxide, (2) a controlled, oxidizing am-
monia-ammonium sulfate leach, (3) solvent extraction,
and (4) electrowinning to recover pure (greater than
99 pet) nickel and cobalt. Advantages of this Bureau
process (BMRRAL) include almost complete recovery
of nickel and cobalt, recycling of reagents, low energy
requirements compared with those of other laterite
processing methods, and minimal pollution (SO, p. 11).
15
CAPITAL AND OPERATING COSTS FOR PROPOSED
DOMESTIC NICKEL OPERATIONS
Average total costs calculated for each of the
deposits analyzed cover mining, milling, smelting, re-
fining and/or ferronickel production costs, transporta-
tion costs, capital recovery, and taxes. These costs
often vary depending on such factors as deposit loca-
tion, depth of ore body, grade of nickel, and presence
of byproducts and coproducts, and physical and design
parameters such as size of operation, mining method,
stripping ratio, processing losses, energy consumption,
and required labor. Analyses of operating and capital
costs used in this evaluation are presented here. Costs
used are weighted averages by total proposed recovered
tonnage from each deposit, adjusted to January 1983
U.S. dollars. Properties represented include all evalu-
ated nonproducing deposits that contain demonstrated
nickel resources.
OPERATING COSTS
Cost data for nonproducing domestic sulfide and
laterite deposits, aggregated by mining method, are
presented in table 7. Eighteen properties are analyzed ;
three are laterite deposits using surface mining meth-
ods; fifteen are sulfide deposits using either surface
methods (four), underground methods (nine), or
combined surface and underground methods (two).
Mine Operating Costs
Mine operating costs are presented as weighted
average (based on tonnage) costs per ton of recovered
ore and per pound of recovered nickel (table 7) . They
reflect direct costs of labor, facilities, supplies, and
maintenance, indirect costs of administration, and a
15-pct rate of return. Costs do not include Federal,
State, and local taxes, and depreciation. These are in-
cluded as separate cost categories in the analysis.
Mine operating costs for the 18 individual proper-
ties range from $3.14 per metric ton of recovered ore
for a surface sulfide operation to $13.61 per metric ton
of recovered ore for an underground sulfide operation.
Mine operating costs for sulfide surface operations are
at the lower end; costs for sulfide combined surface-
underground and underground operations are at the
higher end. A range of $9 to $15 was obtained when
various mining options were modeled for the Duluth
Gabbro Complex underground operations. Operating
costs for the three laterite surface operations are in
the middle of the range, reflecting the high waste-to-
ore stripping ratio of approximately 5 to 1, five times
greater than the stripping ratio of sulfide surface
operations.
On a cost per pound of recovered nickel basis,
sulfide surface mines have a lower cost than combined
and underground operations. Laterite surface opera-
tions have the lowest weighted average mine operating
cost. The lower mine operating cost for the three
laterite surface operations is a consequence of higher
ore feed grades for nickel, averaging about 0.87 pet
nickel, nearly five times greater than the ore feed
grade of about 0.19 pet nickel of the 15 sulfide deposits.
Postmine Process
Operating Costs
Nickel recovery from sulfide ores typically utilizes
flotation to produce a nickel concentrate that requires
additional smelting and refining to produce a commer-
cial nickel product. Estimated costs associated with
processing sulfide ores include mill, smelting, and
refining operating costs, and/or a toll charge, which
is essentially a capital recovery cost for the smelter
and/or refinery.
Domestic laterite operations do not incur a sepa-
rate mill operating cost. Estimated laterite ore process-
ing costs include those for crushing, screening, drying,
and hydrometallurgical or pyrometallurgical methods
to recover a marketable nickel product. The high costs
(shown in table 7) reflect the lower volume of laterite
ore actually treated.
Combined smelting and refining operating costs for
individual sulfide ore operations range from $4.32 to
$25.78 per metric ton of recovered ore. All 12 Minne-
sota operations were credited with a portion of the
capital cost for a proposed smelter near Duluth, MN,
Table 7. — Estimated weighted average operating cost data for nonproducing domestic nickel operations'
Proposed Mine Mill Processing 2 Transportation 3
°p-«- SSS2 «*
million t t ore lb Ni t ore lb Ni t ore lb Ni t ore lb Ni
Sulfide:
Surface 4 7.3 $3.47 $1.15 $3.38 $1.12 $5.23 $1.74 $2.32 $0.77
Underground 9 7.9 9.96 3.09 3.61 1.12 6.07 1.88 2.41 .75
Combined surface-underground 2 11.7 8.78 3.07 2.98 1.04 5.62 1.97 2.35 .82
Total or weighted average 15 8^3 a04 2^58 3A7 TTl 5^79 1.86 2.38 .76
Laterite: surface — 3 -\2 6\96 A5 NAp NAp 46.68 2^98 NAp NAp
NAp Not applicable.
1 All costs are weighted averages based on total recovered ore and nickel from each deposit in January 1983 U.S. dollars.
2 Includes all costs of processing to a marketable nickel product.
3 Includes all costs of transporting a mill or smelter concentrate to a smelter or refinery. Laterite operations process ore on site; no transportation cost is needed.
16
therefore incurring only a minimum or no smelter toll-
ing charge. Remaining sulfide operations incurred a
much higher smelter tolling charge, since smelters
proposed for use by these operations are independently
owned. To some extent, the wide range reflects the
higher cost of processing the high pyrrhotite ore from
Crawford Pond. The wide range is not as evident when
basing processing cost on a dollar per pound of re-
covered nickel, with a range of $1.55 to $2.27 per
pound. This reflects differences in nickel grades be-
tween the Minnesota properties mill concentrates,
which are slightly lower than nickel grades of other
sulfide operations mill concentrates.
Adding mill, smelter, and refinery operating costs
together into a single total for sulfide ore processing
results in a better comparison between sulfide ore
processing costs and laterite ore processing costs. The
total estimated weighted average operating cost for
processing sulfide ore is $9.26 per metric ton recovered
ore or $2.97 per pound of recovered nickel. The total
estimated processing cost for laterite ore, as shown in
table 6, was $46.68 per metric ton of recovered ore or
$2.98 per pound of recovered nickel. On a dollar-per-
pound-of-nickel basis, the cost of processing nickel to
a marketable product is virtually the same for laterite
and sulfide ores. This is due to the offsetting circum-
stances of sulfide deposits' having lower grades and
lower processing costs than laterites.
Transportation Costs
Laterite operations do not incur a transportation
charge, since it was proposed to process mine output
on-site. Sulfide operations, however, incur a trans-
portation charge since their mill concentrates must be
shipped to smelters and refineries.
Concentrates from the 12 Minnesota operations
would be railed to a proposed smelter complex in Du-
luth, MN, with subsequent shipment from the smelter
to a refinery in Canada (Sherritt Gordon) at a cost of
$2.30 per metric ton of mined ore, $0.76 per pound of
recovered nickel. Two Alaskan properties would barge
their concentrates, at a total cost of $2.56 per metric
ton of mined ore, $0.38 per pound of recovered nickel,
to the Port Nickel, LA, facilities. It was proposed
that a smelter would be added to the existing refining
facilities. The concentrate from Crawford Pond, ME,
would be transported to Outokumpu's facilities in
Harjavalta, Finland, for processing.
The total weighted average transportation cost for
sulfide operations is $2.38 per metric ton of recovered
ore, $0.76 per pound of recovered nickel. Other con-
centrate transportation variations are presented in the
section "Effects of Transportation."
CAPITAL COSTS
Capital costs for the proposed domestic nickel
deposits are presented by mining method and ore type
in table 8. These costs reflect the total investment
required to develop the deposit, construct mine and
mill facilities, initiate production, and produce a
commercially marketable nickel product. These costs
also include infrastructure and mine and mill plant
and equipment. The capital cost of a smelter complex
for the Minnesota Duluth Gabbro Complex properties
is identified in the table.
Proposed laterite operations require an estimated
average capital cost. investment of nearly $275 million,
3 pet for exploration, development, and infrastructure,
8 pet for mine plant and equipment, and 89 pet for
mill plant and equipment (RRAL) .
Surface sulfide operations would require a capital
investment of approximately $191 million (excluding
smelter capital). Exploration, development, and infra-
structure account for 7 pet, mine plant and equipment
for 55 pet, and mill plant and equipment for 38 pet.
Underground sulfide ore operations would require
a capital cost of nearly $331 million. Costs are broken
down into — 28 pet for exploration, development, and
infrastructure, 41 pet for mine plant and equipment,
and 31 pet for mill plant and equipment; smelter capi-
tal costs are not included.
Two proposed operations using a combined sur-
face-underground mining method would require an
estimated capital cost investment of $419 million.
Capital costs breakdown is — 21 pet for exploration,
development, and infrastructure, 33 pet for mill plant
and equipment, and 46 pet for mine plant and equip-
ment.
Capital costs for 12 Minnesota properties are
also listed separately owing to the proposed smelter
complex. Two of the proposed operations are surface
mines: in the Birch Lake and Ely Spruce areas. The
remainder are underground or combined surface-
underground operations. Total average capital cost
for an operation of this size is estimated at $496
Table 8. — Estimated capital cost data for nonproducing domestic nickel operations 1
fon Number of Proposed annual capacity
properties Ore, million t Nickel, t
Sulfide:
Surface 4 7.3 10,000
Underground 9 7.9 12,100
Combined surface-underground 2 1 1 .7 14,700
Minnesota:
With smelter 12 9.8 13,300
Without smelter 12 9.8 13,300
Laterite: surface 3 1 .2 9,200
1 All costs are in January 1983 U.S. dollars.
2 Annual costs are weighted averages based on annual recovered ore and nickel from each deposit.
Total capital cost,
millions
Annual costs 2
tore
lb Ni
$191
331
419
496
344
275
$ 24.34
41.00
71.00
50.54
35.00
264.55
$ 8.58
12.71
24.70
17.00
11.75
16.92
17
million. Exploration, development, and infrastructure
account for 14 pet, mine plant and equipment for about
33 pet, mill plant and equipment for 22 pet, and the
smelting complex for about 31 pet. Capital costs with-
out the smelter complex were estimated to be $344
million, with exploration, development, and infrastruc-
ture accounting for 20 pet, mine plant and equipment
for 47 pet, and the mill plant and equipment for 33 pet.
POTENTIAL DOMESTIC NICKEL AVAILABILITY
Nickel is potentially recoverable as either a pri-
mary product or coproduct from most of the deposits
evaluated. It is considered a potential byproduct from
four Missouri deposits. All evaluated deposits were
analyzed to determine the average total production
cost required to recover nickel on conditions that all
other products would be marketed at their January
1983 commodity market price.
PRIMARY AND COPRODUCT
NICKEL DEPOSITS
Total potential nickel available from identified
and demonstrated resources of the evaluated nickel
deposits at various total costs of production averaged
over the life of the deposits and including a 15-pct
rate of return is illustrated in table 9 and figure 14.
This analysis, however, assumes the existence of
a domestic smelter. Lack of such capacity can signi-
ficantly affect nickel availability, as noted in the sec-
tion "Effects of Transportation." In addition, tech-
12
■o 10
3
O
Q.
1 i r—
1
Demon strotedj
— 1
J
" a
w
5
1 6
/
I— 'l
1 1
Identitied
K
in
8 4
■-^ 1
r
-
_l
<
1-
P 2
\ /
Demonstrated and identitied
.1.. ' '
■
3 12 3
4
3 6
TOTAL RECOVERABLE NICKEL, million t
Figure 14. — Total potentially available nickel from domestic
deposits at identified and demonstrated resource levels.
nology for many of these properties is still at bench-
scale or pilot plant level. This lack of proven large-
scale process capability introduces large risk factors
into the approximately $500 million capital investment
for an operation. This uncertainty in technology and
high capital expense are certainly major factors in the
lack of development of these domestic resources.
The United States has over 5.5 million t of nickel
potentially recoverable from identified resources of the
23 studied deposits. No nickel is available below an
average total cost of production of $3.74 per pound of
nickel. The January 1983 nickel market price was about
$3.25 per pound. At an average total production cost
of $4 per pound nickel, approximately 1.09 million t
of nickel is available from sulfide deposits, and none
from laterite deposits. Between an average total pro-
duction cost of $4.01 and $7.50 per pound of nickel, an
additional 1.97 million t of nickel becomes available:
1.00 million t from sulfide deposits and 0.97 million t
from laterite deposits. From an average total produc-
tion cost of $7.51 to $9 per pound of nickel, 2.22 million
t more becomes available, all from sulfide deposits.
Above an average total cost of $9 per pound of nickel,
approximately 0.27 million t of additional nickel is
available, mostly from laterite deposits.
Demonstrated resources contain a total of 4.88
million t of potentially recoverable nickel from the
evaluated deposits. As stated previously, no nickel be-
comes available until the average total cost of produc-
tion exceeds $3.74 per pound of nickel. About 1.09
million t of nickel is available at an average total pro-
duction cost of $4 per pound of nickel, all from sulfide
deposits, again none from laterite deposits. At an aver-
age total cost of $7.50 per pound, an additional 1.44
million t becomes available: 1.00 million t from sulfide
deposits and 0.44 million t from laterite deposits.
Approximately 2.22 million t of additional nickel, all
from sulfide deposits, becomes available at an average
total cost of production of $9 per pound of nickel.
Above an average total cost of $9 per pound of nickel,
Table 9. — Total potential available nickel from domestic resources at selected total-cost-of-productlon ranges
Demonstrated resources Identified resources
Average total Paction cost range 1 Sulfide ore Laterite ore" Sulfide ore Laterite ore"
1 ,000 1 pet increase 2 1 ,000 1 pet increase 2 1 ,000 1 pet increase 2 1 ,000 1 pet increase 2
to $4.00 1,093 NAp 6 NAp 1,093 NAp 6 NAp
to $7.50 2,098 92 438 NAp 2,098 92 967 NAp
to $9.00 4,316 106 438 4,316 106 967
Above $9.00 4,442 3 438 tf 4,442 3 1,107 15
NAp Not applicable
1 Total cost of production is based upon the marketability of all recovered byproduct and coproduct commodities and the existence of necessary postmine
processing facilities. Costs include a 15-pct rate of return on the invested capital.
2 Percent increase is the percent of additional recoverable nickel available at each total cost range over that in the next lower cost range.
18
only 0.13 million t becomes available, from sulfide
deposits only.
Nickel sulfides contribute about 80 pet of the total
potentially recoverable nickel from identified resources
and 91 pet from demonstrated resources. No nickel
from either sulfide or laterite deposits at both resource
levels is available at an average total production cost
equal to the January 1983 market price for nickel.
POTENTIAL ANNUAL
NICKEL AVAILABILITY
There are sufficient recoverable domestic nickel
resources to promote a viable domestic nickel industry.
However, because of secure low-cost foreign sources,
the United States has not developed its own nickel
production capability. Potential annual nickel avail-
ability curves for the United States have been de-
veloped to illustrate domestic nickel production capa-
bility.
In the engineering analysis of each deposit, a
development schedule is proposed. The time required
to develop each deposit depends on deposit location,
required exploration, necessary preproduction develop-
ment and plant construction, depth o^ overburden,
type of mining proposed, and infrastructure required.
Annual production capacities proposed in development
and full operation schedules are estimates based on
feasibility studies prepared for a particular deposit.
These capacities could be increased or decreased de-
pending on conditions that exist at time of startup.
The capacity of Hanna Mining Co.'s Nickel Mountain
Mine, as used in this study, is based on company re-
source estimates, mining equipment capacity, and
ferronickel production.
For analysis purposes, it is assumed that Hanna's
Nickel Mountain Mine remained a producer. Non-
producing properties do not have a specific startup
date or development schedule; it is assumed that pre-
production began in a base year (N). Estimated
potential production from N+5 to N+20 is shown in
table 10 for both identified and demonstrated resources.
Based on production capacities described above,
annual production of domestic nickel resources at both
identified and demonstrated levels would not reach
apparent 1982 consumption levels (157,850 t) until
year N+5 and then only if the average total cost is
$7.60 per pound of nickel or higher. Estimated annual
production from identified nickel resources could re-
main at 137 pet of 1982 consumption levels for a
Table 1 0.— Estimated annual availability of recoverable nickel for
various years at an average total production cost of $7.60 per
pound nickel, 1 million metric tons
Year Demonstrated resources Identified resources
N + 5 182 208
N + 10 197 224
N + 13 • 186 213
N + 16 168 208
N + 20 136 158
' Includes a 15-pct rate of return on the invested capital.
period of 16 yr or until year N+20; for demonstrated
nickel resources, annual production could average
118 pet per year above 1982 consumption levels for
16 yr or until year N+16.
Figures 15 and 16 present total potential nickel
production at both identified and demonstrated re-
source levels at various averaged total nickel pro-
duction costs. These figures illustrate the rapid in-
crease of domestic production from N to N+5 and a
steady decline in production after N+10. This de-
cline, however, is based upon current known resource
levels of the evaluated deposits. Additional ex-
ploration could increase mine life or result in the
discovery of other nickel resources.
BYPR ODUCT NI CKEL
DEPOSITS
In addition to deposits where nickel could be
recovered as a primary or coproduct, four deposits
in the Missouri lead-zinc mining district were ana-
lyzed in which nickel could be recovered only as a
byproduct. It is proposed for each operation that
nickel is recovered in a cobalt-nickel flotation con-
centrate, which would require further processing.
N+5 N+IO N+15 N+20 N+25 N+30 N+35
YEAR
9.00-
8.00
7.00
6.00
5.00
4.00
3.00
2.00-
1.00
I I I II II
iN+IO
..JN+30
i r
r
i..
.Jn+20
r
I i !
20 40 60 80 100 120 140 160 ISO 200 220
ANNUAL RECOVERABLE NICKEL, thousand t
Figure 15. — Annual production from domestic deposits at
the demonstrated resource' level, related to total cost of
production and year of production.
19
275 1-
250-
225 -
200-
175-
150 -
125-
100-
75-
50-
25 -
0«-
N
12.00
11.00
■a 10.00
c
| 9.00-
! 8.00
5 7 °0-
° 6.00
fc 5.00-
< 3.00 -
1.00-
I I 1 I 1 1
-$tl90 N Year preproduction
development begin* "
r— lQ-$MJ<
J Tx —
-
d-
-^
b.
0-$7.5O
0-$5,50
^
y±-.
V
1_ L,
_i_
N+5 N + IO N+15 N+20 N+25 N+30 N+35
YEAR
-i 1 r
i i
;N+IO
IN + 20
r
JN + 30
....J
_r
rdJ— i~- J !
25 50 75 100 125 150 175 200 225 250 275
ANNUAL RECOVERABLE NICKEL, thousand t
Figure 16. — Annual production from domestic deposits at
the identified resource level, related to total cost of produc-
tion and year of production.
Production of nickel from these mines is based on
the following assumptions:
1. Production and marketability of primary and
coproducts, which may include cobalt, copper, and
lead and zinc.
2. Adaptability of current technology to recover
nickel from low-grade cobalt-nickel concentrates,
which contain less than 10 pet nickel.
Using January 1983 commodity prices (table 2)
for all primary and coproducts and a 15-pct rate of
return, an economic evaluation was performed to
determine the total cost required to produce nickel
from these four operations.
Based on proposed nickel and cobalt recovery
technology, approximately 12,000 t of nickel is avail-
able at the demonstrated level and 15,000 t at the
identified resource level from the four Missouri lead-
zinc deposits. The total cost of production for nickel
ranges from nearly $27 to $145 per pound.
Although feasibility studies have been made by
various companies, no nickel is being recovered at
the present time. This is due in part to limited
amounts of recoverable nickel, the low-grade cobalt-
nickel concentrates, and the high cost to produce this
nickel. No smelter is currently processing a low-grade
cobalt-nickel concentrate.
FACTORS THAT AFFECT NICKEL AVAILABILITY
The previous section described potential avail-
ability of domestic nickel at both identified and
demonstrated resources levels. These analyses were
based on proposed development plans and capital
costs for each deposit. Criteria such as revenues
from byproducts and coproducts (cobalt, copper,
gold, silver, etc.), energy and labor costs, trans-
portation costs, and the adaptability of metallurgical
research and pilot plant studies used to recover
nickel can significantly alter nickel's availability.
These variables are discussed in the following sec-
tions of this report.
Table 11.— Domestic nickel deposits containing at least 10,000 1
of recoverable nickel at the demonstrated resource level
State Property
Alaska Brady Glacier.
Yakobi Island.
California Gasquet Laterite.
Pine Flat Mountain.
Maine Crawford Pond.
Minnesota Birch Lake area (7 operations).
Dunka River.
Ely Spruce area (2 operations).
MINNAMAX.
Partridge River.
Oregon Nickel Mountain Mine.
Red Flat.
Nineteen deposits (table 11) containing at least
10,000 t of recoverable nickel in demonstrated re-
sources were further studied to show the effects
of these cost sensitivities on availability of nickel.
Total nickel production from these analyses is com-
pared with total nickel production in the base study.
The base study reflects costs and market prices as
previously discussed in "Capital and Operating
Costs for Proposed Domestic Nickel Operations" and
"Potential Domestic Nickel Availability."
EFFECT OF BYPRODUCT AND
COPRODUCT REVENUES
One condition of the base study availability
analysis is that each operation would be able to sell
byproducts and coproducts at January 1983 com-
modity prices, listed in table 2. It is further assumed
that the January 1983 commodity price covers cost
of production to include a 15-pct rate of return, and
that a market exists for the commodity. Figure 17
shows the distribution of revenues from commodi-
ties recovered from sulfide and laterite deposits. As
20
SULFIDE DEPOSITS
LATERITE DEPOSITS
Precious metals
4.1 pet
Cobalt
1.3 pet
Chromite
1.8 pet
Figure 17. — Distribution of byproduct and coproduct revenues generated by each commodity produced from
sulfide and laterite deposits.
this figure illustrates, copper from sulfide deposits and
cobalt from laterite deposits are major byproducts.
In both cases, nickel production contributes more
than half the total revenues.
To assess the impact of revenues generated by
byproduct commodities on the availability of nickel,
sensitivity analyses were conducted where the by-
product revenues were based on
1. Commodity market prices set at zero (case A) .
2. Commodity market prices of January 1982
(case B).
3. Commodity market prices of average 1980
(case C).
o- 10-
S 8-
" , — r—
— i 1
Case A
_r— ' Base study
1
J
_ f[ Case B
J~ Case C
.. i i,
t
12 3 4
TOTAL RECOVERABLE NICKEL, million t
Figure 18. — Comparison of total nickel availability with
variations in commodity market prices: base study, January
1983 prices; case A, prices set at zero; case B, January 1982
prices; case C, average 1980 prices.
Changes in total availability of nickel for the
three analyses are shown in figure 18, and sum-
marized in table 12.
By removing all nonnickel revenues (case A),
the total cost of production would be borne by nickel
revenues alone. This removal of all nonnickel
revenues results in an increase of $0.55 to $5.23 per
pound nickel total cost over the base study (January
1983 commodity prices). Sulfide operations would be
most seriously affected if nonnickel revenues were
not available. An average increase of $3.11 per pound
of nickel or approximately 44 pet above the base
study cost would result. The total cost to recover
nickel from laterites would increase $0.80 per pound
of nickel, about 14 pet above the base study average
if nonnickel revenues are eliminated.
For case B, which utilizes January 1982 com-
modity market prices in analyzing the properties,
mixed effects occur concerning the total cost of nickel
production with respect to the base study. These mixed
effects are due to lower precious metal prices and a
higher price for cobalt in January 1982 than in Janu-
ary 1983. For two sulfide operations that produce
Table 12.— Comparison of total available nickel within various
total-cost-of-productlon ranges at various levels of byproduct
and coproduct revenues, thousand metric tons
Total cost' of nickel production, to to to to
per pound $4.00 $7.50 $10.00 $15.00
Base study, January 1983 market prices. . 1,093 2,536 4,880 4,880
Case A, market prices set at zero 919 2,267 4,880
Case B, January 1982 market prices 1 ,093 2,536 4,880 4,880
Case C, averaged 1980 market prices 1,167 4,755 4,880 4,880
1 Costs are in January 1983 dollars and include a 15-pct rate of return on
invested capital.
21
cobalt as their only byproduct, their average total cost
of production for nickel decreases by an average $0.44
per pound. The remaining sulfide operations, which
produce cobalt as well as gold and silver as byproducts,
realize an average increase in the total cost of pro-
duction for nickel of $0.13 per pound. In this case, the
higher cobalt price could not offset the lower precious
metal prices. Laterite properties that produce by-
product cobalt show an average reduction of $0.70 per
pound in the total cost of nickel production with re-
spect to the base study.
Using average 1980 commodity market prices
(case C), the average total cost of nickel production
decreases by $0.23 to $3 per pound with respect to the
base study. This decrease is due to higher 1980 average
commodity prices for cobalt, copper, gold, and silver.
Cobalt prices in average 1980 were four times the
January 1983 level. The higher cobalt price increased
revenue to the laterite operations that recovered co-
balt more than to the sulfide operations that recovered
copper, gold, silver, and only small amounts of cobalt.
The laterite operations that recovered cobalt reduced
their total cost of production of nickel an average of
36 pet with respect to the base study. Sulfide proper-
ties, which mainly recovered precious metals and cop-
per, also benefited from the increased commodity
prices. For the sulfide properties, the higher 1980
commodity prices resulted in a 20-pct decrease in total
cost of nickel production with respect to the base case.
Comparing the three analyses (A, B, and C) with
the base study, cases A and C have the most significant
effect on the availability of nickel. In case A, no
nickel from either sulfide or laterite deposits is
available at a total cost of production of less than
$4.60 per pound nickel. This represents the elimina-
tion of 1.09 million t of available nickel. Case C
resulted in 1.2 million t of nickel becoming available
at a total cost of $2.50 per pound. This increase in
nickel availability occurs at a total cost of produc-
tion significantly below the January 1982 market
price of $3.25. Because of the increase in cobalt price
and decrease in precious metal price for case B, the
effect of January 1982 commodity prices is mixed.
The effect is positive (decrease in total cost of
production of nickel) if the increase in cobalt
revenues outweighs the decrease in revenues result-
ing from lower precious metal prices.
EFFECTS OF ENERGY
AND LABOR COSTS
Based upon proposed operating technologies for
domestic nickel deposits, figure 19 shows expected
distribution of direct operating costs. As illustrated,
energy and labor are a significant portion of the
total direct operating cost. Variations in these costs
have a significant impact on domestic nickel avail-
ability.
Energy Cost Variations
Energy costs are estimated to be 26 to 55 pet of
the total direct operating cost for domestic laterite
operations and approximately 18 pet for sulfide
operations. Thus, sulfide deposits would have a
distinct cost advantage over laterite deposits, if
energy costs were to increase.
Data in table 13 indicate a shift in tonnage-
production cost relationships of recoverable nickel
owing to increases in energy costs. A 20-pct increase
over the base study energy costs would reduce by
SULFIDE DEPOSITS
LATERITE DEPOSITS
Figure 19. — Distribution of direct operating costs by deposit type for domestic nickel deposits.
22
Table 13.— Energy-related variations In potential available nickel
from domestic nickel deposits, thousand metric tons
Total cost 1 of nickel to to to
production, per pound $4.00 $8.00 $10.75
Base study:
Sulfides 1 ,093 3,832 4,442
Laterites 438 438
20-pct increase:
Sulfides 623 3,832 4,442
Laterites 438 438
50-pct increase:
Sulfides 2,107 4,442
Laterites 438 438
75-pct increase:
Sulfides 1 ,916 4,442
Laterites 298 438
1 Costs are in January 1983 dollars and include a 15-pct rate of return on
invested capital.
Table 14. — Labor-related variations In potential available nickel
from domestic nickel deposits, thousand metric tons
Total cost 1 of nickel to to to
production, per pound $4.00 $8.00 $1 2.30
Base study:
Sulfides 1,093 3,832 4,442
Laterites 438 438
20-pct increase:
Sulfides 2,141 4,442
Laterites 438 438
50-pct increase:
Sulfides 1,596 4,442
Laterites 438 438
75-pct increase:
Sulfides 1,168 4,442
Laterites 438 438
1 Costs are in January 1983 dollars and include a 15-pct rate of return on
invested capital.
43 pet the tonnage of nickel that could be produced
at a total cost of production of $4 per pound of
nickel. This reduction in capacity is restricted to
sulfide operations only, since no nickel is available
from laterites at $4 per pound. As in the base study,
all nickel production from laterite operations is
potentially available at a total cost of production of
approximately $8 per pound or higher. At $8 per
pound, there is no change in tonnage of available
nickel from proposed sulfide operations with a 20-pct
energy cost increase. With a 50-pct or greater energy
cost increase, no nickel is available at a total cost
of production of $4 per pound. At $8 per pound of
nickel, with a 50-pct energy cost increase, sulfide
production decreases by 45 pet, and there is no
decrease in potential laterite production. However,
a 75-pct energy cost increase reduces potential nick-
el sulfide production by 50 pet and potential nickel
laterite production by 32 pet.
A 20-pct increase in energy costs would, on the
average, increase base study total costs of production
for sulfide operations by 3 pet (4 pet for surface, 3
pet for underground, and 3 pet for the two combined
surface-underground operations). Base study total
costs of production for nickel laterites (all surface
operations) would increase by an average of 4 pet.
An increase of 50 pet in energy costs results in a 9-
pct increase in total cost of production of nickel for
sulfide operations (10 pet for surface, 8 pet for under-
ground, 8 pet for combined). A 75-pct energy cost
boost causes a 13-pct increase for sulfide operations
(15 pet for surface, 12 pet for underground, 12 pet
for combined). The 50-pct and 75-pct increases in
energy cost for laterites result in 11-pct and 16-pct
increases in the total production cost of nickel.
Labor Cost Variations
Labor costs account for approximately 37 pet of
the total direct operating costs for sulfide operations
and about 20 to 23 pet for laterite operations. Impacts
of increases in labor costs upon availability of recover-
able nickel are shown in table 14.
Analyses indicate that with a labor cost increase
of 20 pet or higher, no nickel from either laterites or
sulfides is potentially available at a total cost of pro-
duction of $4 per pound. At a total cost of production
of $8 per pound nickel, all potential nickel laterite
production becomes available even if labor costs in-
crease by as much as 75 pet. Potential nickel sulfide
production decreases by 45 pet, 59 pet, and 70 pet,
respectively, for increases in labor costs of 20 pet,
50 pet, and 75 pet.
Total costs of production increase by an average
of 3 pet for laterite operations and 8 pet for sulfide
operations for a 20-pct labor cost increase. The 8-pct
average increase for sulfide operations can be broken
down into 8 pet for surface operations, 7 pet for under-
ground operations, and 8 pet for combined operations.
A 50-pct labor cost increase results in increases of 21
pet of the base study total cost of production for all
sulfide operations: 24 pet for surface operations, 19
pet for underground, and 20 pet for combined opera-
tions. For the laterite operations, a 50-pct labor cost
increase causes a 7-pct increase, while a 75-pct labor
cost increase creates a 10-pct increase in total cost
of production compared with the base study costs. For
a 75-pct labor cost increase, sulfide operations total
cost of production increases by 31 pet : 33 pet for sur-
face, 29 pet for underground, and 30 pet for combined
operations.
Domestic nickel availability is affected by both
energy and labor. Increases in energy costs affect
laterite operations slightly more than sulfide opera-
tions, and labor costs affect sulfide operations more
than laterite operations. This is to be expected since
sulfide operations tend to be labor intensive while
laterite operations are energy intensive.
EFFECTS OF VARIABLE
NICKEL RECOVERIES
A ferronickel reduction process is the only com-
mercial process that has been used in the United
States for the recovery of nickel. Other metallurgical
processes for recovering nickel from domestic sulfide
and laterite ores are at bench-test or pilot plant scale.
Because of the uncertainties in their commercial appli-
cation, these various processing technologies have a
wide range of reported recoveries (table 15) . Accord-
ing to discussions with industry personnel, uncertainty
concerning recovery and scale-up problems is a factor
preventing private industry from developing nickel
properties.
Metallurgical methods used in the base study con-
23
Table 15.— Typical recoveries of nickel and coproducts from
domestic resources, by metallurgical process and
ore type, percent
Ore type and metallurgical process
Nickel Cobalt Copper
Sulfide:
Bulk flotation 55-85 50 80-96
Differential flotation 57-72 50 86-90
Laterite (oxide):
Caron RRAL process 60-75 40-90 NA
BMRRAL process 78-93 52-87 82
Missouri lead-zinc:
Flotation and chalcopyrite upgrade process — 20 20 40
NA Not available.
NOTE. — Chromite recovery is 50 pet for the RRAL process.
Sources: References 9, 28, 31 , 33.
sist of the following systems. Sulfide ores utilize bulk
and differential flotation depending on ore characteris-
tics, with nickel recoveries ranging from 74 to 85 pet
for bulk flotation and at 65 pet for differential flotation.
For laterite ore, a reduction roast-ammoniacal leach
(BMRRAL) process is used, with nickel recoveries of
90 to 92 pet. Metallurgical recoveries of cobalt and
copper from sulfide ores are estimated at 50 pet and
80 to 89 pet, respectively. Metallurgical recovery of
cobalt from laterite ores is estimated at 80 pet.
Analyses were conducted using a high, medium,
and low limit of nickel metallurgical recoveries to
show effects of recovery variations on potential nickel
availability. Technologies compared are the Caron
process, the Bureau of Mines reduction roast-ammonia-
cal leach process (BMRRAL) for laterite ores, and
bulk and differential flotation for sulfide ores. Table 16
lists metallurgical recoveries used in the analysis.
With the high limit of nickel recovery (85 pet),
4.9 million t of nickel could be recovered from sulfide
ores using a bulk flotation process. This is an 11-pct
increase in total potentially available nickel and an
8-pct reduction in the average total cost of production
of nickel compared with the availability and cost deter-
mined in the base study, which utilized recoveries of
74 to 85 pet. Approximately 1.2 million t of nickel
would be available at a total cost of $3.45 per pound.
Differential flotation at the high nickel recovery limit
of 72 pet reduces the base tonnage of nickel potentially
available by 3 pet to about 4.3 million t, with a cor-
responding increase of 2 pet in the total cost of pro-
duction. No nickel is available until the total cost of
production is $3.85 per pound or higher.
Midlevel nickel recovery limits for bulk and dif-
ferential flotation of 74 and 65 pet, respectively,
result in decreases of 1 pet and 12 pet, respectively, in
total nickel potentially available, with average in-
creases in total costs of production of 0.4 and 11 pet
over the base study. Bulk flotation would recover
600,000 t of nickel at a total cost of production of
$3.85 per pound. No nickel is available using differen-
tial flotation until the total cost of production is $4.30
per pound.
Total potentially recoverable nickel decreases from
the base study by 30 pet and 26 pet, respectively, for
bulk and differential processing, at lower recovery
limits of 55 and 57 pet. Increases to the total cost of
production are 26 pet (bulk flotation) and 22 pet
(differential flotation). No nickel is potentially avail-
able until the total cost of production has reached
about $5.05 per pound for bulk flotation or $4.90 per
pound for differential flotation.
Laterite ores are not affected as much as sulfide
ores by variations in postmine nickel recovery process-
ing. Two processing technologies are compared with
the base study: the BMRRAL process and the Caron
RRAL process. Hanna Mining Co.'s Nickel Mountain
Mine operation was not included in the analysis since
it is considered a producer using a commercially
established nickel processing technology.
High levels of nickel recovery in both cases (93
pet for each) increased the tonnage of nickel available
above the base study tonnage by 1 pet for each process.
The total cost of production for nickel was reduced by
5 pet for the BMRRAL process and by 2 pet for the
Caron process.
At median nickel recovery levels (83 pet for
Caron, 89 pet for BMRRAL) nickel tonnage was re-
duced by 8 pet and 2 pet, respectively, below that re-
covered in the base study analyses. An increase over
the average total cost of production determined in the
base study occurred for each process : 4 pet for Caron
and 1 pet for BMRRAL.
Using the lower limits of nickel recovery (73 pet
for Caron, 85 pet for BMRAAL) , the amount of nickel
potentially available is reduced by 10 pet (Caron) and
3 pet (BMRRAL), resulting in an increase in total
cost of production of 21 pet (Caron) and 5 pet
(BMRRAL) over the base study level.
None of the laterite cases analyzed produced a
total cost of nickel production of less than $4 per
pound. This represents no significant change from the
base study. Table 17 summarizes the effect of various
metallurgical nickel recovery technologies on the total
tonnage of potentially available nickel.
Table 16. — Metallurgical recoveries used In
this analysis, percent
Ore type and
metallurgical process
Base
Nickel
High Median
Low
Copper
Cobalt
Sulfide:
Bulk flotation
Differential flotation
Laterite:
Caron RRAL process . .
BMRRAL process
74-85
65
NAp
90-92
85
72
93
93
74
65
83
89
55
57
73
85
80-89
87
NAp
NAp
50
50
NAp
80
NAp Not applicable.
Sources: References 9, 28
1,31,33.
EFFECTS OF
TRANSPORTATION 4
The cost of shipping mill concentrates for further
processing has a significant effect on the total cost of
nickel production. For the base study, concentrates
from operations in Minnesota would be processed at a
proposed smelting complex operating near Duluth,
MN, with subsequent shipment of matte to Sherritt
4 Transportation and cost data were provided by Dick Flschback
and John Black of the U.S. General Services Administration.
24
Table 17.— Effects of metallurgical recoveries on the potential
availability of nickel over various total-cost-of-production
ranges, thousand metric tons
Total cost 1 of nickel to to to
production, per pound . . $4.00 $8.50 $13.00
BASE STUDY
Sulfides 1,093 4,271 4,442
Laterites 438 438
SULFIDES
Bulk flotation:
High 1 ,226 4,743 4,934
Medium 1 ,093 4,245 4,405
Low 1,171 3,406
Differential flotation:
High 1,064 4,136 4,292
Medium 2,227 3,923
Low 1,613 3,515
LATERITES
Caron RRAL process:
High 443 443
Medium 420 420
Low 60 396
BMRRAL process:
High 443 443
Medium 434 434
Low 425 425
1 Costs are in January 1983 dollars and include a 15-pct rate of return on
invested capital.
Gordon's plant in Fort Saskatchewan, Alberta,
Canada. Construction of on-site smelting and refin-
ing facilities for Alaskan and Maine deposits did not
appear warranted because of limited known resources.
For the purpose of this study, concentrates from the
Maine operation would be shipped to facilities in
Harjavalta, Finland, and concentrates from the two
Alaska operations would be shipped to a proposed
smelter at Port Nickel, LA, near the existing refinery.
To limit the size and scope of this analysis, only
the Minnesota Duluth Gabbro Complex properties were
used. They represent 86 pet of potential nickel pro-
duction and would be most seriously affected by trans-
portation costs.
In addition to proposed construction of a Duluth,
MN, smelting complex, four options for transporting
Duluth Gabbro concentrates were considered:
1. Rail transportation to Port Nickel, LA, for re-
fining.
2. Barge transportation to Port Nickel, LA, for
refining.
3. Rail transportation to Sudbury, Ontario,
Canada, for refining.
4. Barge plus rail transportation to Sudbury, On-
tario, Canada, for refining.
Table 18 contains approximate transportation
rates, distances, destinations, and modes for these
options. Table 19 summarizes the changes that could
occur to the total cost of nickel production when the
cost of transporting smelter matte to different refining
facilities is considered.
Option 4, transporting Minnesota nickel smelter
mattes via barge and rail to Sudbury, Ontario, Canada,
Table 1 8. — Distances, rates, destinations, and modes used in the
transportation analysis
u..m.~j ~„a ,w»;„«.i~„ Estimated Estimated rate, 1
Method and destination distance, km per t/km
Rail to:
Port Nickel, LA 2,600 $0.07
Sudbury, Ontario, Canada 1 ,325 .22
Barge to:
Port Nickel, LA 2,600 .005
Sudbury, Ontario, Canada 1,047 .016
1 All rates are noncontracted (contract rates would be less), updated to
January 1983 dollars from January 1981 dollars.
Source: GSA Transportation Dep., Denver Federal Center, Building 41,
Denver, CO.
Table 19. — Transportation-related cost variations 1 compared
with the base analysis
Transportation options 2
Origin
Operation
1
2
3
4
Birch Lake
. Surface
-$0.11
-$0.49
+ $0.06
-$0.06
Do
. Underground . .
-.11
-.49
+ .06
-.59
Dunka River . . .
. Combined
-.35
-.81
-.11
-.90
Ely Spruce
. Surface
-.04
-.25
+ .18
-.36
Do
. Underground . .
+ .06
-.26
+ .17
-.37
MINNAMAX . . .
do
+ 1.09
+ .06
+ 1.68
-.11
Partridge River
Combined
-.19
-.49
-.05
-.02
1 Costs are in January 1983 dollars and include a 15-pct rate of return on
invested capital.
2 Options: 1 , rail to Port Nickel; 2, barge to Port Nickel; 3, rail to Sudbury; 4,
barge plus rail to Sudbury.
for refining, is the most cost effective. Approximately
0.47 million t of nickel is potentially available at a
total cost of production of $3.25 per pound, about equal
to the January 1983 market price. Nearly 1.09 million
t is available at $3.40 per pound. The overall decrease
in the total cost of production is about 8 pet from the
base study cost.
Transporting the matte by barge to Port Nickel,
LA, option 2, is the next most cost effective, reducing
the overall average total cost of production by 6 pet,
with 1.09 million t of nickel potentially available at a
$3.50-per-pound total nickel production cost. Data in
table 20 indicate the shift in the tonnage of available
nickel at various total nickel production costs caused
by changes in the cost of transportation.
Table 20. — Comparison of estimated total potential available
nickel at various total-cost-of-production ranges for
transportation options, thousand metric tons
Total cost 1 of nickel to to to
production, per pound $3.50 $6.50 $10.00
Base study 2 6 1,573 4,185
Options:
1— rail to Port Nickel 1 ,573 4,185
2— barge to Port Nickel 1,093 1,925 4,185
3— rail to Sudbury 1,573 4,185
4— barge to Sudbury 1,093 1,925 4,185
1 Costs are in January 1983 dollars and include a 15-pct rate of return on
invested capital.
2 Data include only the 12 proposed Minnesota Duluth Gabbro properties.
25
CONCLUSIONS
Twenty-three nickel-bearing deposits were ana-
lyzed to determine the quantity of nickel that could be
recovered from each deposit and the total cost of
production at each operation, including a 15-pct rate
of return on investment.
Identified nickel resources evaluated in this study
contain an estimated 9.0 million t of in situ nickel,
with an estimated 5.5 million t of recoverable nickel.
Demonstrated nickel resources contain an estimated
8.2 million t of in situ nickel, with 4.8 million t
estimated to be recoverable.
Annual production of nickel, as proposed, could
meet and exceed domestic 1982 consumption levels for
16 yr if the total cost of production as well as market
price reached $7.60 per pound of nickel and market
prices for other commodities remained at their Janu-
ary 1983 levels. This assumes that nickel sulfide con-
centrate smelting facilities would be established in the
United States.
Byproducts and coproducts can account for up to
35 pet of the total revenues from the nickel-bearing
deposits in this study. An analysis of these deposits
revealed that, without recovering byproducts and co-
products, the economic viability of domestic nickel
Droduction is reduced even more.
Domestic nickel availability is affected by both
energy and labor. Increases in energy costs affect
laterite operations slightly more than sulfide opera-
tions. For laterite operations, the average total cost of
production is increased by 4 and 16 pet for increases
of 20 and 75 pet in energy cost. For sulfide operations,
the average total cost of production is increased by
3 and 13 pet for the same energy cost increases. Labor
cost increases of 20 and 75 pet increase total costs of
production by 3 and 10 pet for laterites and 8 and 30
pet for sulfide operations.
Laterite ores are not affected as much as sulfide
ores by variations in postmine nickel recovery proc-
esses. Variations in sulfide ore processing methods
resulted in increases of 11 pet to decreases of 23 pet
in nickel total availability, while laterite ore processing
variations resulted in increases of 1 pet to decreases
of 10 pet in total available nickel.
The transportation analyses indicated that, unless
nickel smelting facilities are established within the
United States, with refining facilities within a close
proximity (i.e., within 1,100 km), much of the poten-
tial nickel resources of the Duluth Gabbro Complex of
Minnesota would not be economically viable.
26
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nesota. MN Dep. Nat. Resour., Div. Miner., Rep. 93, 1977,
49 pp.
21. Lawver, J. E., R. L. Wiegel, and N. F. Schulz. Min-
eral Beneficiation Studies and an Economic Evaluation of
Minnesota Copper-Nickel Deposit From the Duluth Gab-
bro. Report on BuMines contract G0144109, Dec. 1975, 92
pp; available upon request from D. A. Buckingham,
Minerals Availability Field Office, BuMines Denver, CO.
22. Hays, R. M. Environmental, Economic, and Social
Impacts of Mining Copper-Nickel in Northeastern Minne-
sota. Report on BuMines contract S0133084 with Dep.
Civil and Miner. Eng., Univ. MN, Aug. 1974, 123 pp.;
available upon request from D. A. Buckingham, Minerals
Availability Field Office, BuMines Denver, CO.
23. Tull, R. E. State Mineral Policy and Copper-Nickel
Mining Profitability. Ch. 17 in Regional Copper-Nickel
Study. MN Environ. Quality Board, v. 5, 1977, 63 pp.
24. Golightly, J. P. Nickeliferous Laterites; A General
Description. Paper in International Laterite Symposium
(New Orleans, LA, Feb. 19-21, 1979). Soc. Min. Eng.
AIME, New York, 1979, pp. 3-24.
25. Boldt, J. R., Jr. The Winning of Nickel. Its Geology,
Mining, and Extractive Metallurgy. Wadsworth Publ. Co.,
Belmont, CA, 1975, 500 pp.
26. National Academy of Sciences. Mining in the Outer
Continental Shelf and in the Deep Ocean. Washington,
DC, 1975, 102 pp.
27. McKelvey, V. E., N. A. Wright, and R. W. Rowland.
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No. 5, 1977, pp. 76-79.
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CO.
27
APPENDIX
Table A-1 .—Ownership and type of mineral holdings of domestic nickel properties
Property
Domain
Type of mineral holdings
Owner-operator
Status
Owner-
ship, pet
Alaska:
Brady Glacier
Funter Bay
Mirror Harbor
Snipe Bay
Yakobi Island
California:
Elk Camp area
Gasquet Laterite —
Little Rattlesnake
Mountain.
Pine Rat Mountain . .
Red Mountain area .
Maine: Crawford Pond.
Minnesota:
Birch Lake area
National monument
National forest
... .do
... .do
... .do
Located claims Inspiration Develop Co. . . Owner-operator 100
... .do Admiralty-Alaska Gold do 100
do Inspiration Develop Co do 100
do Robert M. Johnson do 100
do Inspiration Develop Co do 100
National forest, private.
National forest
....do
... .do
National forest, private.
Private
do California Nickel Corp do 100
do do do 100
do Del Norte Mining Co Leased from California 100
Nickel Corp
do Hanna Mining Co Owner-operator 100
Claims, leases, fee ownership do Owner 100
Private lease, fee ownership Know Mining Corp do 1
Hanna Mining Co Owner-operator > 100
Basic Inc do J
National forest Federal, State, and private leases
Inco U.S. Inc Owner
Hanna Mining Co Owner-operator I 1
Dunka River
Ely Spruce area . .
MINNAMAX
Partridge River . . .
Missouri:
Annapolis Mine . . .
Bonne Terre Mine
Brushy Creek
Buick Mine
.do
.do
do
..do
.do
Duval Corp do.
United States Corp do .
Inco do.
00
Federal, private leases, fee
ownership.
Federal, State, and private leases . AMAX Exploration, Inc
100
100
.do
. . Owner 100
.do Owner-operator ,
100
Private
Mixed .
... .do
....do
Private lease, fee ownership St. Joe Minerals Corp. . . . Owner 100
do do Owner-operator 100
Fletcher Division.
Indian Creek
Madison Mine . . .
Magmont Mine . .
....do ..
Private . .
Unknown
Mixed . . .
100
50
50
Milliken Mine do
Mine La Motte Group.
West Fork
Montana: Stillwater
Oregon:
Eight Dollar Mountain
Nickel Mountain Mine
... .do
....do
National forest .
National forest, State, BLM, private.
Red Flat .
Rough and Ready . .
Woodcock Mountain
Washington:
Blewett Pass
Cle Elum Iron-Nickel
Mt. Vernon Nickel . . .
Private
Mixed .
National forest, State, BLM, private.
....do
National forest
Mixed
Private
Federal, private lease do do
Ownership, mineral rights only AMAX Lead Co. — MO do
Homestake Lead Co. — Owner
MO.
Federal, private leases St. Joe Minerals Corp. . . . Owner-operator 100
Lease, fee ownership do do 100
Private lease Anschutz Mining Corp. . . . Owner 100
Federal, private lease, fee Cominco American Inc Owner-operator 50
ownership. Dresser Minerals Owner 50
Private lease, fee ownership, Kennecott (Ozard Lead) . . Owner-operator 100
mineral rights only.
Federal, private leases Anschutz Mining Corp. . . . Owner 100
do ASARCO Inc do 100
Located claims, Federal lease Anaconda Co Owner-operator 100
Located claims, private leases, fee California Nickel Corp. . . . Majority owner .
ownership. Hanna Mining Co Owner
Meridian Resources Ltd do
Pan Artie do
Royalty lease, fee ownership Hanna Mining Co Owner-operator
Located claims do do
Red Flat Nickel Corp Owner
Big Basin Nickel Corp do
Claims, leases, fee ownership Inspiration Develop Co. . . Majority owner .
Walt Freeman Owner (*)
do Coastal Mining Co do 80
Located claims Washington Nickel Mining do .
and Alloys Inc.
Fee ownership Burlington Northern RR do .
Inc.
do Pacific Nickel Co do .
( 1 )
100
28
59
13
95
100
100
100
BLM Bureau of Land Management.
1 Unknown.
*U.S. Government Printing Office : 1984 - 447-263/18812
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