Environmental Assessment
Volume A-2
Introduction
History
2
HISTORY
2.1
EXPLORATION AND PROJECT DEVELOPMENT
The Ambatovy and Analamay deposits consist of thick nickel/cobalt lateritic
mineral occurrences, first noted in 1960 during regional geologic mapping by the
Malagasy Geologic Service. In the early 1970s, Groupement d’Etude de Nickel
de Moramanga (GENiM), a consortium comprising Société Le Nickel, Ugine
Kuhlmann, Anglo American, and Bureau des Recherches Géologiques et
Miniéres (BRGM), conducted a major evaluation of the deposits. GENiM drilled
368 wide-spaced holes at the deposits. This drilling program led to an estimate
of mineralized material of 190 million tonnes grading 1.10% nickel and 0.10%
cobalt, at a 0.80% nickel cutoff.
Phelps Dodge secured the mineral rights in May 1995, and subsequently
conducted extensive work on their Ambatovy/Analamay Project. The work
included 22,000 m of drilling, batch and continuous testwork, an environmental
impact assessment, and a feasibility study based on geological data collected and
available up to July 1997. The feasibility study was done in 1998, and it defined
a “base case” in which only part of the lateritic mineralization (the “Ambatovy
West” deposit) was considered for mining and processing. The environmental
study was not filed with regulators, but has been used for its very good data, in
the current Environmental Assessment (EA).
The base case contemplated the processing of 2.67 million tonnes of ore per year,
and metals production of 26,400 tonnes of nickel and 2,400 tonnes of cobalt per
year. The study also stated that the Ambatovy West deposit contained proven
and probable reserves of 37 million tonnes, averaging 1.10% nickel and 0.10%
cobalt, which was sufficient to maintain production at the stated level for a
15-year period.
The resource was identified as being amenable to open pit mining, and the
project contemplated in the 1998 study was based on using the pressure acid
leach process. The geologic resource, including all occurrences currently
identified, was stated to exceed 113 million tonnes grading 1.13% nickel at a cut-
off grade of 0.8%.
Further exploration work and refinement of the May 1998 study led Phelps
Dodge Madagascar to consider a “recommended case” which was based on a
longer mine life, higher throughput and increased ore head grade, by mining
3.33 million tonnes of ore from two ore zones identified as Ambatovy and
Analamay. This recommended case resulted in a mine life of 25 years and
Ambatovy Project
3
January 2006
