Pat Scallan, mine manager at Greenbushes in south-western Western Australia, said the company would complete final development studies for the expansion by the end of the month, before going out to tender in September.
"By the end of October we should be ready to let the contract, with construction starting in early 2001," Scallan said during a recent site visit.
The expansion will double the capacity of Greenbushes' processing plant to more than 3 million tonnes of ore per year. It will increase annual tantalum output from the operation to around 1.3 million pounds.
SOG's board gave the nod for the Greenbushes upgrade last month, along with a $35 million expansion of the company's Wodgina mine near Port Hedland that will boost annual output there to 1 million pounds.
The $100 million investment at the two mines was underwritten by new contracts with SOG's two tantalum customers, Cabot Corporation of the United States and Germany's Bayer Group.
The contracts provide for sales of approximately 10-12 million pounds of tantalum, in various forms, over a five year period.
Cabot also has a toe-hold on SOG's share register, accounting for roughly 8% of the miner's issued capital.
Consumption of tantalum has grown by a steady 3-5% over the past few years. But demand skyrocketed recently due to the material's usage in mobile phone capacitors.
That is good news for SOG. Traditionally a highly hedged Western Australian gold miner, SOG has gradually built up tantalum production since the early 1990s on the back of long-term contracts with Cabot and Bayer. It now supplies around 25% of the world market, and will likely capture a further 10-20% via the current expansion.
According to Scallan, construction of the new $35 million plant at Greenbushes should take around 10 months, with commissioning pencilled in for November 2001.
"We will build it as a stand alone plant and then tie it in to the existing facility," he said. "We're looking at ramping up to 2.5Mtpa by June 2002, and 3.5Mtpa by 2004. We can accelerate the ramp up if need be."
The upgraded plant will be fed roughly 2.5Mpta from the new Central Lode open cut, while around 1Mtpa will come via a planned underground mine below the current Cornwall Pit.
Construction of the $30 million decline will begin in April next year, with underground ore production starting by 2003.
SOG plans to use a contractor to develop the decline. "For development, yes," he said. "But we will definitely look at going for in-house mining after that."
Full story in the September edition of Australia's Mining Monthly.
