Mineral resources exploration firm Highlands Pacific has confirmed that its partner on the Ramu nickel and cobalt project in Papua New Guinea (PNG) is considering expanding the project at a cost of $1.5bn.

The announcement was made in response to recent media reports regarding the expansion.

Highlands holds an 8.56% interest in the project. The company did not reveal specific details of the project’s expansion plan.

Furthermore, Highlands noted that the Ramu project achieved record rates of production and strong profitability in recent quarters.

Last month, the miner reported an increase in the project’s mineral resource and ore reserve estimates to 136 million tonnes at an average grade of 0.9% nickel and 0.1% cobalt.

In May this year, Highlands signed a streaming transaction with Canadian firm Cobalt 27 over the Ramu project. Under the terms of the agreement, Cobalt 27 has the right to buy 55% and 27.5% of Highlands’ attributable share of cobalt and nickel production, respectively.

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By GlobalData

Highlands is currently working on the completion of the transaction, which is subject to the receipt of the approval of the joint venture partners in the Ramu project, including MCC and the Mineral Resources Development Company of PNG (MRDC).

“The Ramu project achieved record rates of production and strong profitability in recent quarters.”

MCC completed the construction and commissioning of the $2.1bn Ramu mine in 2012.With an estimated mine life of more than 30 years, the mine is reported to have total estimated reserves of one billion pounds of nickel and 100 million pounds of cobalt.

The company can increase its stake to 11.3% once it repays project loans to partner Metallurgical Corporation of China (MCC).

In addition, the miner has the option to increase its interest to 20.55%.