Win for Axiom in nickel legal row

axiom

Axiom plans to develop the deposit on Isabel island itself and export the nickel ore unprocessed. Picture:Bloomberg

Rowan Callick | The Australian

JUNIOR Australian explorer Axiom has gained further ground in its four-year battle to cement control of a large laterite nickel deposit in the Solomon Islands.

Axiom has also formed a groundbreaking alliance with a Papua New Guinea landowner company to develop the project.

The Solomons’ High Court yesterday announced that Japanese industrial and trading giant Sumitomo should pay Axiom $4.8 million in costs incurred by the Australian firm in obtaining a judgment in September confirming its right to ownership.

The deposit, on Isabel island at the centre of the archipelago, was first explored in the 1960s by Canadian miner Inco and then by ­California’s Kaiser Engineering.

Axiom also owns a gold target in the west of Guadalcanal, the ­island that contains the capital, Honiara.

Sumitomo will be required to complete the payment of costs only if and when it loses its appeal against the High Court verdict.

The Court of Appeal, whose panel includes Australian judges, will set the date for the hearing next month.

Solomon Islands has in recent decades proven a difficult environment in which to operate a successful mine.

Melbourne-based St Barbara, which in September took over the only substantial mine there — Gold Ridge, near Honiara — is the sixth owner in 20 years, and continues to encounter considerable problems.

The mine, which once provided 20 per cent of national income, is not operating at present.

But Axiom chief executive Ryan Mount told The Australian that the chief reason for former troubles was that “the international mining industry has failed to take the time to understand the unique culture and customs of the various provinces” of the country.

“Once you understand it, the next step is to respect it and ensure you are integrated into the community,” he said. “The issues are not geological but social.”

Axiom had concluded an equity agreement to give the Isabel project landowners 20 per cent of the mine.

Mr Mount said Axiom would develop the mine itself, looking to produce the first nickel — obtained simply by bulldozing, since it is at the surface — at the end of next year.

The company plans to export the ore unprocessed. Among the options is the prospect of shipping it to RamuNiCo, the mine operated in neighbouring PNG by China Metallurgical Group.

Axiom yesterday entered into a “strategic partnership” with one of the most prominent of PNG’s increasingly ambitious landowner companies, Anitua, owned chiefly by landowners of the Lihir mine.

Anitua has lent Axiom $5m, repayable in cash or in Axiom shares before July 7.

Anitua will provide services to the Isabel project.

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Filed under Exploration, Financial returns, Mine construction, Solomon Islands

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