Potential expansion plan for Papua New Guinea’s Ramu nickel mine


With strong production numbers and promising drilling results, the Ramu nickel-cobalt mine in Papua New Guinea is heading for a bright future – and expansion is on the cards. Business Advantage PNG talks to its two venture partners as the mine celebrates 10 years of production.

Kurumbukari mine, at the Ramu Nickel project. Source: Nickel 28

China’s MCC Ramu Nico Ltd, which has a lion’s share (85 per cent) joint venture interest in the US$1.2 billion (K4.22 billion) world-class Ramu nickel-cobalt mine near Madang, aims to exceed last year’s record performance.

Full year production of contained nickel of 34,302 tonnes was up 9 per cent on 2021, due largely to a 33 per cent increase in fourth quarter production.

Meanwhile, full 2022 production of contained cobalt was essentially flat from 2021.

Mine life extension?

Wang Zhou, Chairman of MCC, shared with Business Advantage PNG plans to upgrade nickel and cobalt resources through more active geological exploration within the special mining lease (SML) boundary.

The Ramu mine has been operational for 10 years, has an estimated reserves 124 million tonnes of nickel and cobalt and its SML area currently holds reserves adequate for a mine life of 20 years.

But based on current nameplate production, Zhou believes this can be further extended to 40 years through ongoing productive and prospective drilling in Ramu West and Great Ramu areas.

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‘The type of nickel sulfate Ramu produces is a crucial element in the lithium-ion battery supply chain.’

Assuming they prove to be economically feasible, the company is also interested in developing nickel deposits outside the lease area.

‘MCC’s core technology and rich experience in nickel laterite development, together with its upstream/downstream industry chain advantages and close cooperation between China and PNG provide the only feasible way of developing such low-grade nickel deposits,’ he adds.

Low cost – high demand

While the nickel price has proved volatile in recent years, Craig Lennon, Head of Asia Pacific at minority venture partner, Canada-listed Nickel 28 Capital Corp (8.56 per cent) can’t see the current price – up 38 per cent last year – falling too far from here.

‘The type of nickel sulfate Ramu produces is a crucial element in the lithium-ion battery supply chain,’ says Lennon.

What offsets low-grade nickel deposits at Ramu NiCo, adds Lennon, are production methods developed by the company, which are 40 per cent cheaper than conventional methods.

Free cash flow could quadruple

While 65 per cent of the small-cap miner’s cash flow currently goes towards repaying debt to MCC, Lennon expects Nickel 28’s board to consider paying dividends once 100 per cent of the cash flow is returned to the company within the next two years.

Once Nickel 28’s debt to MCC is cleared, the company’s interest in Ramu Nickel will also move from 8.56 to 11.3 per cent. The PNG government and landowner’s interests also move from 6.44 to 8.7 per cent, which will effectively reduce MCC’s interest to 80 per cent.

‘Based on the current nickel price, we could see between US$30 to US$40 million of free cash flow, up to four times our current free cash flow – a significant number for a company with a market cap of CAN$90 million (K230 million).’


  1. I think Ramu miners are not only Mining Nickel and Cobalt but also vast chrome. I am not a geologist but I see tones of chromite is shifted out every time. I am not harsh but to understand things right. miners must be honest in their dealing. The government should have geologist inspectors.

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