Zambia's Munali Nickel Mine back in Production

ZAMBIA, Mar. 26 -- Zambia's Chinese-owned Munali nickel mine resumed output on Friday and plans to raise annual output of nickel ore to 1.2 million tonnes by 2012 from the current 900,000 tonnes per year.

Australia's Albidon Ltd, which halted operations last year at the southern African country's only nickel mine following a fall in metals prices, resumed output after China's Jinchuan Group took over majority shareholding and invested $37 million.

Ore production at Munali in the first two months of 2009 was 74,000 tonnes, below the forecast 87,000 tonnes, mainly due to a lack of equipment and lower grades.

"I am pleased to note that the Munali mine is planning to upgrade the mine from 900,000 tonnes per annum of ore to 1.2 million tonnes of ore by 2012," Zambian President Rupiah Banda said at a ceremony to mark the resumption of production.

Banda said the mine also planned to increase the number of employees to 450 from the existing 370 by 2012 once the mine boosted its output.

The Zambian leader defended Chinese investment in the country, which has come under increasing criticism from opposition parties who accuse Chinese companies of ignoring safety standards and ill-treating workers.

"The Chinese have dedication to develop Africa and we need to welcome them," he said.

Zambia, Africa's largest copper producer was promoting non traditional mineral exports such as nickel, uranium, gold and platinum and had declared them priority minerals, Banda said.

Albidon Zambia managing director, Alistair Cook said Munali has nickel reserves for 10 years, but these could be extended.

In September last year, Barclays Bank Zambia Plc said that Jinchuan Group had secured a $12.6 million facility from the bank to purchase underground mining equipment.