The big nickel miner is reviewing the plant's processing rate as part of a total mine review following an outstanding year of operation - one that has been greatly enhanced by a stronger metal price.
The expansion proposal has become more attractive to WMC after Mt Keith's nickel recoveries rose from around 60% two years ago to current levels of more than 71%. The improvements mostly stem from two modifications to the mill - acid addition and split size flotation - installed at a cost of $5 million last year. A similar investment will be made this year, with two further plant changes - a re-grind mill and slimes flotation - due to be commissioned in September.
"Hopefully then we'll see another step-change in recoveries," he said.
The aim is to increase recoveries to "significantly more" than the 73% forecast in the mine's original pre-commissioning studies, Mt Keith's general manager, Derek Lenartowicz said.
Some analysts had theorised Mt Keith's improvements might be due to the treatment of higher-grade sections of the orebody. But Lenartowicz denied that was the case.
"Improvements in ore quality would be seen as a marginal contributor in all this [recovery improvement]," he said.
"What we have done works. If you look at our budget against what we've mined, the ore grade is spot on. So we haven't mined any lower or higher quality ores."
Traditionally, another thorny issue for Mt Keith has been the talc component, which can lead to low iron/magnesium ratios in the concentrates. This is a potential problem for WMC's Kalgoorlie Smelter, where high magnesium levels are undesirable.
However, Lenartowicz is confident the issue has now been laid to rest.
"We have addressed that in a number of ways - by blending, and a number of plant improvements. While talc was an issue for us in the past, it is not the big scary monster that it used to be. It is something that we manage."
Approximately two thirds of the mine's nickel concentrate is taken by road trains to Leinster for drying and blending, and then railed to the Kalgoorlie nickel smelter for conversion into matte (an intermediate product grading 67% nickel). The remainder of the concentrate is railed to Esperance where it is exported to Finnish group Outokumpu.
The Outokumpu contract runs until 2004.
"When it finishes we have a number of options," Lenartowicz said. "One is putting all the concentrates through the Kalgoorlie smelter - and we believe we could do that. We could also extend the current contract with Outokumpu or sell the concentrates somewhere else."
Just a few years ago, Hugh Morgan and his nickel division managers were facing a barrage of criticism from self-styled nickel experts.
"Your nickel mines are dinosaurs," the critics said. "Sulphides are on the way out and laterites are the way of the future."
How quaint those barbs now appear. For a so-called dinosaur, WMC's nickel section is looking remarkably healthy.
According to the stockbroker CIBC World Markets, the division is expected to achieve a net profit of $578 million this year, up from $110 million in 1999.
Buoyed by strong nickel prices (now slightly off their peak of US$4.69 per pound in May, but still robust), the closure of several marginal Kambalda mines, vastly improved productivity at the other mines and a long-running capital investment program, WMC's nickel engine room is running in top gear.
Full Mt Keith mine review in August's Australia's Mining Monthly.
