Xstrata Nickel proceeds with Tanzanian project

Xstrata Nickel has reported that it expects its Kganga project in Tanzania to become operational in 2011.

The mine, which is located in the western region of Kagera, is a joint venture with Barrick Gold.

Construction is expected to begin in 2009 after the completion of feasibility studies being undertaken by Xstrata and Barrick Gold Tanzania, which already has a number of projects in the country.

Xstrata, which has invested US$95 million in the pre-feasibility stage of the development, believes that the Kabanga nickel project is one of the world’s most attractive undeveloped nickel sulphide deposits.

It has a total estimated indicated resource of 9.7 million tonnes grading 2.37 percent nickel and a total estimated inferred resource of 36.3 million tonnes grading 2.8 percent nickel.

However, recent reports in the Tanzanian press indicated that Kabanga is among the many areas in the country which have been heavily affected by illegal mining.

These allegations have been refuted by Tanzania’s Minerals Commissioner who has stated that activity at the Kabanga mine has been in connection with metallurgical testing.

When fully operational, the Kabanga nickel project could provide employment for over 2,000 people.