BHP Nickel West has extended its offtake partnership with Mincor Resources, marking a key step in the latter’s strategy to restart its nickel mining operations in Kambalda, Western Australia.

The latest offtake agreement covers ore tolling and concentrate purchase between BHP Nickel West and Mincor and replaces the 20-year agreement that expired last month.

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Under the terms of the agreement, BHP Nickel West will process a minimum of 200,000 tonnes per annum (tpa) up to a maximum 600,000tpa of nickel ore using Mincor’s Kambalda Nickel Concentrator and its associated infrastructure.

Mincor managing director David Southam said: “Mincor has clearly outlined its strategy to re-commence mining operations in Kambalda to take advantage of what we see as a looming generational change in the nickel market – and the signing of this term sheet marks a critical step towards realising that vision.

“We weighed up the alternatives, including investing in our own stand-alone nickel concentrator and the option of toll-treating our ore via third parties.”

Dependent on the average monthly London Metal Exchange nickel price, Mincor will make nickel-in-concentrate sales to BHP.

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“Mincor has clearly outlined its strategy to re-commence mining operations in Kambalda to take advantage of a looming generational change in the nickel market.”

The term sheet is subject to the completion of a full form offtake agreement within a period of two months and the required board approvals within each company.

In case the full form offtake agreement is not agreed within the timeframe or not extended by mutual agreement, the term sheet will lapse.

Southam further added: “With the production solution for Mincor’s high grade nickel sulphide ore now settled, our focus turns to ramping up our studies to feasibility status while committing additional funding for an accelerated drilling programme, particularly at our greenfields discovery at Cassini.”