Xstrata's Koniambo Nickel project goes into production

Xstrata has announced that its Koniambo Nickel project in New Caledonia has gone into production after producing its first metal this week, a key milestone for the five billion-dollar greenfield project.

Xstrata Nickel, the world's fourth-largest nickel producer, is a 49% joint-venture partner in the project which has been under construction for the past six years. It is said to be a "flagship component" of Xstrata's organic growth programme.

"First metal production signals the start of Koniambo Nickel as a multi-decade, tier-one asset with long-term cash costs at the bottom of the second quartile."

Xstrata said that it is on target to meet the estimated full-production rate of 60,000 tonnes per annum by the end of 2014. At peak production, the mine will cement New Caledonia's position as on the of most important nickel producers in the world, the company said.

Chief Executive of Xstrata Nickel, Ian Pearce, commented: "All components of the mining and smelting process have now been successfully tested, leading to production of metal from Line 1.

"The production of first nickel metal at Koniambo after six years of complex design and construction is a huge achievement and a source of great pride for all of our employees."

The project is expected to provide steady employment for around 800 workers. At the height of its construction, more than 6,000 people were employed to build the project and associated infrastructure.