PNG's Kumul Minerals eyes Madang as country's nickel processing hub

Papua New Guinea could soon host a fully-fledged nickel processing hub in Madang province, with state-owned Kumul Minerals Holdings Limited pushing a strategy to keep more mineral processing onshore rather than shipping out partially refined product.

The plan was revealed by KMHL Managing Director Sarimu Kanu during a Q&A session with Business Advantage International Publishing Director Andrew Wilkins at the Business Advantage PNG Investment Conference held in Brisbane on Tuesday.

 PNG's Kumul Minerals eyes Madang as country's nickel processing hub

At the centre of the proposal is an expansion of the existing Ramu nickel-cobalt project, paired with a new refinery designed to turn out nickel cathode and nickel sulphate. According to Kanu, the plan would see Ramu's output climb dramatically.

"What is unique about that particular strategy in Ramu is that we are driving the expansion of Ramu from about 32,000 tonnes a year to about 74,000 tonnes of nickel produced a year," Kanu said.

Any such expansion would still need to clear a number of hurdles, including regulatory sign-off, formal agreements, financing arrangements and detailed technical planning before it could proceed.

Kanu confirmed that KMHL already holds a stake in Ramu NiCo and is in the process of building on that position. Earlier this year, the Independent Consumer and Competition Commission gave the green light to KMHL's purchase of a 1.97 per cent participating interest in the Ramu Nickel Cobalt Joint Venture, acquired from Mineral Resources Ramu Limited.

Speaking to delegates, Kanu said the company was working toward securing an additional 20 per cent stake within the coming months, though he declined to go into specifics on how that deal would be structured.

Ramu NiCo's Basamuk plant currently turns out mixed hydroxide precipitate, known as MHP. Nickel cathode, by contrast, feeds into stainless steel manufacturing, while nickel sulphate is a key input for battery makers.

Kanu said the long-term goal was for nickel to become the first PNG-mined base metal to leave the country as a fully refined product.

"We want to aggregate all the nickel prospects in the country to feed into the refinery. We want to drive the strategy that nickel will be the first base metal that will be exported in metal cathode form. All the processing will be done in PNG," he said.

He added that the Basamuk facility and the Kurumbukari mine were well placed to act as anchor customers for future power projects in the area, with cheaper electricity potentially also giving a boost to the long-stalled Madang Pacific Marine Industrial Zone — a project Kanu noted would struggle to compete if it had to rely on diesel-fired power.