Capital expenditure mainly directed to improving productivity and capacity and capacity
Terrafame’s capital expenditure in 2018 was at the previous year's level. One of the key investments was the battery chemicals plant, which will be taken into commercial use in the beginning of 2021.
Capital expenditure is reviewed at Terrafame in two groups: improving productivity and capacity, and sustaining capital expenditure. Capital expenditure during 2018 totalled EUR 85.1 million. Of this amount, EUR 37.9 million was used to improving productivity and capacity.
The investment targets set for the year were achieved well and, overall, the projects stayed on budget. For related work, Terrafame utilised mainly Finnish companies, and partners also included local companies from the Kainuu region.
Investing in the battery chemicals plant
The preparations for the new battery chemicals plant were initiated already in 2017 with feasibility studies. The aim is to further process the current main product – nickel-cobalt sulphide – into nickel and cobalt sulphates suitable for electric vehicle batteries. Ammonium sulphate, a by-product, is suitable for use as a fertiliser and in the chemical industry.
During the year, the project was taken forward as planned, and a positive investment decision for the battery chemicals plant was issued by the company’s Board of Directors in October. At the time of making the decision, the owners of Terrafame also strengthened the funding solution for the plant.
The key capital expenditure items of the project in 2018 were a feasibility study, basic and detailed engineering and earthwork construction. Earthwork construction was almost completed by the end of the year. In the autumn, contracts concerning the main technologies were also signed with various suppliers, with equipment deliveries scheduled for 2019 and 2020.
Overall, the capital expenditure in the battery chemicals plant is expected to be EUR 240 million.
Significant investment in the development of bioleaching
At Terrafame, the bioleaching process has two stages. The ore is transferred from the primary to the secondary leaching area for final leaching after approximately 18 months. An investment was made in the aeration of the primary leaching area in order to develop the bioleaching recovery. Construction work to expand the total secondary leaching area was carried out in block 4 including the groundwork and process equipment for the area.
The transfer of waste rock to a separate waste rock area started in late 2017 in accordance with the environmental permit, and investing in this also continued in 2018. Construction of the foundations was carried out in blocks 1, 2 and 3, and the investment also included the procurement of process equipment. Construction work for block 1 was completed in 2018.
Investments in the hydrogen line and emergency shelter were finished
Construction work of the hydrogen sulphide plant 3 and the connected lines was started in early summer 2017. The production line was completed and commissioned in the summer of 2018, when the project’s capital expenditure was finished. At the previously completed hydrogen sulphide plant 2, investments were made in the modifications and maintenance work to improve the reliability of the plant. The new emergency shelter located next to the main gate was also completed, and the facilities were commissioned in the summer.
The largest investments in sustaining capital expenditure included a dumper truck, excavator and wheel loader, as well as the modifications to the relocation of the ore transportation line of the secondary leaching area.
In 2018, EUR 37.9 million was used to improving productivity and capacity.