Nickel mining is hardly news in the Sudbury Basin —
easy-to-find contact deposits have been known and
exploited for a century or more in what is one of Earth’s
richest nickel areas. But few have done this as successfully as
the relatively small FNX Mining Company, especially in its
McCreedy West-Levack complex.
FNX, in existence since 1984, came into its current incarnation
in 2002, when it won the bid to develop and operate the
Inco (now Vale Inco) properties, none of which were operating
at that time.
“The properties all had some infrastructure, both above
ground and underground, with the exception of Podolsky,
which was just an open pit,”said mining geologist and FNX vice
president of investor relations Dave Constable. “They were all
shut down, but not out of ore.”
The reason they were shut down was simple: the nickel price
had dropped to below three dollars a pound and continuing to
run the mines was a losing proposition for Inco.What they proposed,
and FNX was happy to take on,was a deal under which
FNX would handle all exploration,development and operations
of the mines themselves, and Inco would take the product over
at that point, as part of an offtake agreement.
“FNX’s product is a ton of ore,”Constable said of the arrangement,“
not concentrate, or metal.”
As part of the agreement,
FNX began exploratory drilling
in April 2002, and by summer
had made its first discovery at
the McCreedy West property.
Using the existing infrastructure, FNX brought the mine into production
in November 2003 and,
despite the nickel price being
around the six dollars a pound
mark at that time, paid off the
capital costs 10 months later.
FNX’s first producing mine was
in place, and has been producing
1,500+ tons per day since.
“Half of that production is
nickel ore, and half of it is from
footwall deposits, producing
copper, platinum, palladium and
gold ore,” said Constable.
FNX then turned its attention
to the adjacent Levack
property.The Levack mine was brought into production at the
beginning of 2007, becoming the company’s second producing