State metals and minerals research body Mintek is working on two different studies for establishing a R3,5-billion ferro-nickel smelter at Coega.

Mintek’s annual report says the first project would use ore from Cuba, with the other bringing in ore from New Caledonia, an island in the South Pacific.

Earlier this year the head of Mintek’s Mindev commercial arm Nic Barcza said that funding for a ferro-nickel project could be raised through a listing of the project on the Johannesburg Securities Exchange.

Mintek had completed a prefeasibility study based on ore from New Caledonia.

“The initial results look promising,” said Mintek.

It also reported that last year it had signed a deal with Commercial Caribbean Nickel “to conduct a prefeasibility study for ferro-nickel production from pretreated ore from Cuba”.

“If the results are positive, funding for a bankable feasibility study will be sought from potential joint venture partners and investors.

“The Industrial Development Corporation and Trade and Industry SA have shown an interest in contributing to the prefeasibility study,” said Mintek.

It said an undertaking of a detailed study of the ore resources and material handling logistics for the project was being finalised. If a ferro-nickel smelter was developed at Coega, this would help to revive plans for a stainless steel plant there, because ferronickel is an important feedstock for stainless steel production.

It would also be a boost for Coega, due to considerable uncertainty about plans to build an aluminium smelter there.

Mintek was more encouraged by studies on a $50-million electrolytic manganese dioxide plant, which could be built at Coega.

Initial studies suggest that the project “would be viable”.

Mintek was also looking at the potential for an independent platinum group metals smelter.