African Rainbow Minerals signed a conditional deal to sell nickel to a smelter owned by Boliden AB, offering a pathway for reopening a mothballed mine in South Africa.
The transaction would see nickel concentrate from the Nkomati mine sent to the Harjavalta smelter in Finland “over a multi-year period,” ARM said on Tuesday.
The Johannesburg-listed firm’s board must still approve the restart of mining at the asset, while Boliden needs to conduct due diligence, according to the statement.
Nkomati has been shuttered since 2021, but is South Africa’s only proven primary nickel resource. ARM took full control of the mine last year by closing the acquisition of a 50% interest from Russia’s MMC Norilsk Nickel PJSC.
The potential deal with Sweden’s Boliden “supports the potential recommencement of mining at Nkomati and strengthens the Nkomati restart business case by securing an off-take route for future nickel concentrate production,” ARM said. Harjavalta is the only large-scale nickel smelter in Europe.
South African billionaire Patrice Motsepe is the founder and largest shareholder of ARM. The company’s assets produce coal, gold, manganese, iron ore and platinum group metals. Boliden’s mines and smelters produce copper, zinc, nickel and lead.
The statement didn’t offer any information about the deal’s commercial terms, citing confidentiality provisions.
Reported by William Clowes for Bloomberg
