Norilsk Acquiring OMG's Nickel Assets

Engineering and Mining Journal, Jan/Feb 2007

Norilsk Nickel has entered into a definitive agreement to purchase the nickel business of OM Group (OMG) for $408 million. Assets to be acquired include OMG's nickel refining operations in Harjavalta, Finland, with production capacity of 60,000 mt/y of nickel; its Cawse nickel mining and leaching operations in Western Australia, which supply nickel carbonate to the Harjavalta refinery (6,500 mt/y of contained nickel); its 20% stake in MPI Nickel Pty., which operates the Black Swan and Silver Swan nickel mines that supply nickel concentrate to the Harjavalta refinery (10,000 mt/y of contained nickel) and which is developing the Honeymoon Well nickel project, all in Australia; and up to 11.1% of its holding of the common shares and convertible debt in Talvivaaran Kaivososakeyhtiö, a biological heap-leaching project in the Kainuu district in Finland.

The transaction is subject to approval by regulatory authorities and customary closing conditions, and is expected to close in the first quarter of 2007. At the closing of the transaction, Norilsk will enter into five-year supply agreements to supply OMG with up to 2,500 mt/y of cobalt metal, up to 2,500 mt/y of cobalt contained in cobalt hydroxide concentrate, and up to 1,500 mt/y of cobalt contained in cobalt sulphate solution, along with various nickel-based raw materials used in OMG's specialty chemicals business.

Norilsk will gain access to laterite high-pressure acid-leaching technology, will participate in a bio-heap leaching project, and will extend its product line to include nickel salts and briquettes.

OMG is a vertically integrated, international producer and marketer of value-added, metal-based specialty chemicals and related materials. Headquartered in Cleveland, Ohio, USA, the group operates manufacturing facilities in the Americas, Europe, Asia, Africa, and Australia. OMG acquired the Harjavalta nickel refinery from Outokumpu Oy in April 2000 for $206 million.