China’s Jinchuan Group has resumed production at its Munali nickel mine in Zambia and is looking to increase output to 1.2 million tons by 2012.

The mine currently produces 900,000t a year.

Production was halted last year following a fall in metal prices.

Ore output in early 2009 was recorded at 74,000t below the forecast of 87,000t, due to a lack of equipment and lower grades.

The Munali mine, which was previously owned by Australia’s Albidon, was taken over by Jinchuan which invested $37m into the mine.

The Chinese firm also reportedly invested $12.6m to purchase underground mining equipment, according to Reuters.