Xstrata Nickel plans to restructure its Sudbury operations in response to the ongoing challenging market conditions. The restructuring follows the announcement in November 2008 of the accelerated closure of the end-of-life Craig and Thayer-Lindsley operations at Sudbury, both of which will cease operations with immediate effect. As a result of the restructuring, the Fraser Mine Complex will be placed on care and maintenance and associated support and administrative functions will be reorganized. The Strathcona Mill, with an annual capacity of 2.7 million tonnes of ore, will be reduced to two work shifts from four as a result of reduced feed. In addition, the Fraser Morgan development project will be deferred. This project will be evaluated on an ongoing basis and may be re-initiated when economic conditions allow. Nickel Rim South will become a low-cost, cornerstone operation in Sudbury, generating an annual production of 18,000tns of recoverable nickel by early 2010. Xstrata Nickel has invested CAD 627 million for the project’s first phase, which came in on time and on budget, and has approved the remaining project capital expenditure of CAD 300 million for the completion of mine development and infrastructure. Nickel Rim South is a long life operation that is expected to provide a high value ore feed while significantly reducing Sudbury’s unit costs. Total production from the Sudbury Smelter is expected to remain at a similar level compared to 2008 production as shortfalls arising from the cessation of Sudbury Mines will be offset by concentrates from Nickel Rim South and Xstrata Nickel Australasia.
