West Musgrave copper-nickel project WA given development green light

Final Investment Decision has been reached for the development of the West Musgrave copper-nickel project in Western Australia, with OZ Minerals’ Board approving a direct capital investment of about $1.7 billion. 

“Investment approval for West Musgrave unlocks one of the largest undeveloped nickel projects in the world and, with expected lowest quartile costs, it is set to generate $9.8 billion undiscounted cashflow over its 2-year operating life,” OZ Minerals Chief Executive Officer Andrew Cole said. 

All regulatory approvals are already in place and a land access agreement has been signed with the Ngaanyatjarra people, taking this project another step closer to beginning construction. 

In addition, several of OZ Minerals’ relationship banks provided credit approved commitment letters for a $1.2 billion syndicated facility that will support the development of the West Musgrave Project. 

“The Board’s approval of West Musgrave is a fundamental step towards realising OZ Minerals’ strategy to evolve into a modern minerals producer set to supply global copper and nickel markets as the world moves into the de-carbonisation and electrification era. 

“The funding approach to West Musgrave allows us to continue to fund the current sequencing of brownfields expansions underway in the OZ Minerals portfolio through operating cashflow while providing certainty and flexibility to further maximise the value of West Musgrave. 

“Key to today’s announcement is the support for the Project by the Ngaanyatjarra people, with the signing this week of the Land Access Agreement after more than five years of collaboration to facilitate a productive long-term partnership,” OZ Minerals Chairman Rebecca McGrath said. 

The project team has been working closely with key delivery partners throughout the design phase, preparing for construction. Site mobilisation will begin next month. 

Long-lead items have already been secured along with production slots and contract partners have also been identified for approximately 80 per cent of the material contracts. 

“After a long period of consultation and discussion we are pleased to see OZ Minerals move forward with this project that has been looked at and not pursued by other mining companies in the past. We look forward to working with OZ Minerals in both the spirit and the letter of the agreements we have reached. Our aim is to improve the lives of our people by creating jobs and from ongoing income for the community while protecting our land and the things that are important to us. While we have increased our knowledge of what the mine will involve, this next construction phase will also be important for setting up how we will both work constructively together over the next decades,” CEO of Ngaanyatjarra Council Group Gerard Coffey said. 

GR Engineering Services announced that it has been assisting OZ Minerals with early engineering and design works for the West Musgrave Project. The company has also been supporting long-lead procurement activities prior to the awarding of the design and construction contracts for the project. 

GR Engineering will be delivering the processing plant for the West Musgrave Project, which will have an initial capacity of 12Mtpa and eventually ramped up to 13.5Mtpa. 

“GR Engineering has a longstanding relationship with OZ Minerals on this world-class project. We welcomed the opportunity to partner with OZ Minerals in bringing the Project to an advanced pre-execution phase and we are committed to progressing its safe and successful delivery for OZ Minerals,” GR Engineering Services Managing Director Geoff Jones said. 

On the other hand, LOESCHE GmbH has been appointed as key technology partner and provider of the vertical roller mills that support high energy efficiency and low operating costs at West Musgrave. The vertical roller mills are set to “deliver a paradigm shift in minerals processing with unique operational flexibility and high energy efficiency”. 

“As a mining engineer with a degree in mineral processing, it has always been a vision of mine to develop dry-comminution technologies that enable better sorting efficiencies, reduced power and consumables. We are very pleased to be involved in such an important project. OZ Minerals is breaking new ground and proving that sustainability does not stand in the way of project development, but rather makes such projects possible,” Managing Shareholder and owner of LOESCHE Dr Thomas Loesche said. 

The Western Australian Government also welcomes the announcement of the project’s Final Investment Decision that green lights the development of the West Musgrave Project. 

The project is estimated to create 1,500 jobs during its construction and a further 400 ongoing jobs once it is operational. 

“Today’s announcement from OZ Minerals that it has reached a positive final investment decision for the West Musgrave copper and nickel project is a boon for the State and has the potential to open a new minerals province in Western Australia. 

“The McGowan Government is committed to supporting projects that create more jobs and economic benefits for Western Australians. 

“This project has the potential to open up a new minerals region in WA at an important time in the global transition to renewables,” State Development, Jobs and Trade Minister Roger Cook said. 

In the coming years, nickel production in the State is expected to show a strong growth as global demand for lithium-ion batteries increases. 

Both nickel and copper are in demand minerals utilised in global electrification and renewable energy industries. 

The West Musgrave Project has been designed to be one of the world’s largest fully off-grid, hybrid powered mines. The project is also anticipated to provide a strong foundation for further investment and industry development in the region. 

“On behalf of the McGowan Government, I congratulate OZ Minerals and the Ngaanyatjarra Council Group on the Final Investment Decision for the West Musgrave copper-nickel project. 

“It’s especially pleasing to see the West Musgrave support renewable energy, with about 80 per cent of the project’s needs being sourced from solar and wind. 

“With the global battery market expected to increase 10-fold by 2030 and 40-fold by 2050, we expect the strong demand for WA’s battery and critical minerals to continue growing,” Mines and Petroleum Minister Bill Johnston said. 

Next steps for the project will include: 

• Award of contracts with major partners 
• Increase capacity of the camp to 250 beds by early 2023 
• Mobilisation of equipment to commence earthworks 
• Finalisation of PPA (Power Purchase Agreement) and Living Hub agreement 
• Increase owner team resources in line with plan including operational readiness personnel 

Once operational, West Musgrave is anticipated to produce an average of 35,000 tonnes of nickel and 41,000 tinned of copper annually for its first five years, and about 27,000 tonnes of nickel and 33,000 tonnes of copper a year over its remaining mine life. 

Source: Government of Western Australia – Media Statements; OZ Minerals (1, 2); GR Engineering Services; Australian Mining; International Mining; NS Energy; Creamer Media’s Mining Weekly