Wyloo Metals on mission to revive Kambalda nickel district after Mincor capture

Wyloo Metals boss Luca Giacovazzi says he is on a mission to restore Western Australia’s Kambalda nickel district to its former glory.

The discovery of nickel in the Kambalda region in the 1950s kicked off a massive nickel boom.

Wyloo Metals boss Luca Giacovazzi says he is on a mission to restore Western Australia’s Kambalda nickel district to its former glory as Wyloo prepares for its first steps as a producing miner after finally capturing Mincor Resources.

Wyloo hit the 90 per cent threshold in Mincor shares that will allow it to acquire the rest of the company through compulsory share acquisitions, with the Andrew Forrest-owned company only weeks away from assuming full control of its first producing asset.

Mincor’s planned annual production of about 16,000 tonnes of nickel in concentrate a year will make it a relatively small contributor to global nickel supply – it sits behind BHP, Glencore’s Murrin Murrin and Wyloo partner IGO in terms of total output.

But Mr Giacovazzi told The Australian Wyloo’s backing would help the company properly explore its exploration holdings in the Kambalda with a mind to building a far bigger operation in the future.

The discovery of nickel in the Kambalda region in the 1950s kicked off a massive nickel boom, and turned companies such as Poseidon Nickel into almost a household name in Australia.

But nickel, more than most other commodities, is subject to wild pricing swings and the end of the last mining boom a decade ago pushed down the price of the commodity and forced the closure of most of the region’s smaller mines – including those controlled by Mincor at the time.

Western Mining Corporation's Kambalda Nickel Mine in 1969, which helped turn the region into one of the richest nickel districts in the world.

Mr Giacovazzi said Wyloo believed the best deposits in the district were yet to be discovered. However, he said the company planned to add its considerable exploration know-how to that of Mincor’s team to fully explore the company’s holdings in the region.

“Kambalda has already produced 1.6 million tonnes of nickel. When you think about iron ore you think of the Pilbara; when you think about gold, you think about Kalgoorlie. When you think about nickel, you think about Kambalda – that‘s how prolific it’s been as a nickel belt,” he said.

“Historically, though, Kambalda miners have always just looked for the next couple of years worth of reserves in front of them – and that’s been going on for the last 50 years. The difference between us and maybe under a junior mining company ownership is that we want to take a large-scale systematic approach to exploration and really understand the potential it has.”

That exploration effort had already kicked off at Mincor, Mr Giacovazzi said, and was a key factor in Wyloo’s $760m bid for the company.

“In the last year Mincor was really focused on building out its own exploration team, and they’ve done a whole geological reinterpretation – those were the bits that really excited us,” he said.

“A couple of months ago when we were watching the stock chart, we couldn‘t quite reconcile the share price to how we felt about the potential at Mincor, and that’s why we made the bid.”

A Kambalda miner pictured in 1976 drills for nickel ore at 244m below the Nullarbor surface in WA.

The coming battery boom has helped boost nickel to its best run in decades, with its price rarely falling below $US20,000 a tonne since early 2022, and the rarity of nickel sulphide deposits – currently far easier to turn into battery-grade chemicals than other forms of nickel ore – likely to put a premium on Australian output.

“I think it’s a very different world now. If you look at the history of nickel, you only had a stainless steel market – and then you had the discovery of making nickel pig iron,” he said.

“Today we’ve got a big battery market that’s emerging to sit alongside the stainless steel market – and the requirements for battery-grade nickel are huge.”

Mincor’s re-emergence as a nickel producer has not been easy, with the company at loggerheads with its only buyer, BHP – which processes Mincor ore through its Kambalda concentrator – over the grade of deliveries and arsenic content of the company’s ore.

Those troubles arguably helped Wyloo’s $760m takeover of Mincor succeed, despite strong nickel prices, but Mr Giacovazzi said the company also had its eye on a longer term prize than Mincor’s early teething troubles.

While Mincor plans to keep selling nickel to BHP, Wyloo has a long-term agreement with fellow WA nickel producer IGO for studies on processing options to turn both companies’ ore into nickel sulphate, as well as the possible development of a battery cathode precursor plant in WA.

Mr Giacovazzi said it was too early to say whether that plant would be a better option for Mincor’s output than selling concentrate, but said a final investment decision on the plant was due before the end of 2024.

Originally published as Wyloo Metals on mission to revive Kambalda nickel district after Mincor capture