After 10 years of effort, Rio Tinto clips Eagle Project’s wings – by Dorothy Kosich (Mineweb.com – June 13, 2013)

http://www.mineweb.com/mineweb/

The controversial Kennecott nickel-copper mine destined to usher in a new mining era and more jobs for Michigan’s economically hard hit Upper Peninsula is being sold.

RENO (MINEWEB) – After more than a decade spent studying, permitting and developing the first U.S. primary nickel mine to be built in years, Rio Tinto has decided to sell Kennecott’s Eagle Mine to Lundin Mining for US$325 million in cash.

Since Rio Tinto announced in 2010 that it would invest US$469 million in the development of the Eagle Mine, which was supposed to become the biggest nickel mine in the country, the $325 million-price tag at first appears to be a bargain for Lundin.

Nevertheless, in addition to the total acquisition price of $325 million, remaining investment of Lundin Mining for the balance of 2013 and 3014 to bring the Eagle Mine into production is estimated at $400 million.

Located northwest of Marquette, in the historic mining region of the Upper Peninsula of Michigan, Eagle was to be the first new mining operation to be built in Michigan in years. The “world class” underground nickel-copper mine was also supposed to boost the fortunes of an economically hard-hit region with 500 construction and 220 mining jobs. Rio Tinto had pledged to give 75% of those jobs to local residents.

The mine was supposed to commence production next year, producing 300 million pounds of nickel, 250 million pounds of copper and small amounts of other metals over a seven-to-eight-year minelife. “As part of our commitment to the region, Kennecott will continue to explore for additional resources in the Upper Peninsula,” the company had stated in news releases and on its website.

Annual production is expected to average 23,000 tonnes of nickel and 20,000 tonnes of copper annually with additional by-product credits of precious metals and cobalt during the first three years of operation.

The project had stirred up considerable controversy, generating opposition from opponents who claimed it would damage the Salmon Trout River and nearby wetlands. Also believed to be at risk were endangered species and a culturally significant site to Native Americans including a local group of Ojibwa Indians.

Numerous lawsuits were filed against the project even as state regulators and company officials have steadfastly maintained the mine can be operated safely.

For the rest of this article, click here: http://www.mineweb.com/mineweb/content/en/mineweb-base-metals?oid=194071&sn=Detail

Comments are closed.