Paul NEAOUTYINE

President of the Northern Province

A policy of ongoing and steady improvement

Improving the performance of the SMSP Group, whose core concern is economic rebalancing and social diversification centred around the mining industry, involves looking beyond purely economic indicators. Nickel deposits are not sustainable resources so their development requires long term global management, which focuses on developing human resources and mobilising them around the corporate project, ensuring the safety of processes implemented, tailoring training programs to the needs of the mining industry and protecting the environment just as much as on optimising mining resources and finetuning investments. 

The main recent strategic milestones are as follow:

• Lifting of conditions precedent laid down by the Bercy Accord and the exchange of the mining titles to the Poum and Koniambo massifs.
• Xstrata’s takeover of Falconbridge, making it the Group’s new partner in the construction of the North Plant, scheduled to start production in 2012.
• Partnership with one of the leading world stainless steel producers POSCO, designed to bring together mining and metallurgy by building a ferronickel plant in South Korea, with the starting of production end of 2008, reaching its full production capacity end of 2009, and 
• Exports of low grade limonite ore to Australia (Yabulu). 

Projects designed to develop resources and unlock future prospects for growth 

North plant : SMSP's priority action

The massif resources represent around six million tonnes of contained metal in garnierite ore. Koniambo Nickel SAS, the joint entity linking Xstrata and SMSP (which holds 51% of share capital), is responsible for construction of the pyrometallurgy process plant. 

Two days before the 31 December 2005 deadline, Nickel Management (Jersey) Limited, more commonly know as the “Entity”, acted to lift the conditions precedent and transfer the massifs of Poum and Koniambo.

Xstrata and SMSP are committed to the Koniambo Project, with the start of early construction work beginning 2007 through 2008. Located near the municipalities of Vook (Voh), Koohnê (Koné) and Pouembout, the industrial complex will include a pyrometallurgical plant with an annual production capacity of 60,000 tonnes.

Gwangyang plant : an innovative and original partnership

In return for 49% of its mining titles (excluding Koniambo), SMSP acquires a 51% stake in the two joint companies set up under the partnership, one of which will be responsible for building the pyrometallurgy process plant at Gwangyang in South Korea. Total project investment is 70 billion XPF. Posco is investing 35 billion in the SNNC subsidiary responsible for constructing the ferronickel plant, which will have an annual nickel production capacity of 30,000 tonnes. To ensure production targets are met, the mining subsidiary NMC will deliver 1.8 million tonnes of wet ore a year extracted from its mines at Ouaco, Poya, Nakety, Kouaoua and Boakaine.

The planned ferronickel plant will be built on the Gwangyang industrial site in South Korea to minimise heavy infrastructure costs. This project complements the North Plant project, which remains SMSP’s major and priority project. The South Korean plant will bring together mining company and steel manufacturer in the launch of a plant producing ferronickel from nickel ore in the place of consumption. The SMSP team, divided into groups focussing on mining, geology, legal issues, logistics and metallurgy, mobilised to work on the project between June and December 2005. The plant construction engineering contracts were finally signed early in the first half of 2006.

It is with pride that SMSP entered the world of the metallurgy with the Gwangyang plant furnace lighting on August 25, 2008. It would have been necessary to proceed stage by stage, from subcontracting to mining, and from mining to processing (metallurgy). The partnership with POSCO meets also and especially this ultimate aim of the valorisation of our ming resource. SMSP will cope with the situation, taking into account the confidence of its leaders and teams capacities and mobilisation, which have faced other challenges in the past. this project which comes in complement with the Northern plant, will enable us to ensure SMSP long term operations, while establishing a financial back up of the Northern plant.