Chief executive officer Andrew Cole said today investment in the high-potential West Musgrave copper and nickel project in Western Australia is set to generate $9.8 billion over its 24-year operating life.

“We are planning for first production in the second half of 2025,” Cole said following the board investment announcement.

The company rejected a $8.4 billion takeover bid by global mining giant BHP recently, and is now forging ahead with what Cole flagged as a world-leading plan to operate the mine with a renewable energy plant and support of traditional owners the Ngaanyatjarra people.

“Investment approval for West Musgrave unlocks one of the largest undeveloped nickel projects in the world and, with expected lowest quartile costs, it is set to generate about $9.8 billion undiscounted cashflow over its 24-year operating life,” Cole said.

“Our vision is to build a carbon-free copper and nickel mine using more than 80 per cent renewable energy (from wind and solar generation) in a safe jurisdiction and in partnership with land-connected people.”

World-wide demand for nickel and copper used in renewable energy systems and electric vehicle batteries is soaring as countries rally to de-carbonise, projections are for a shortage in the next four to five years.

OZ Minerals is now immediately moving onto signing contracts with major partners for the project, shifting new equipment onsite to begin earthworks for the renewable energy plant and to build a living hub for 250 people by early 2023.

In South Australia, OZ Minerals owns the Prominent Hill copper-gold mine along with the Carrapateena copper-gold mine in the state’s Far North.

The company expects West Musgrave, once owned by BHP Billiton, to produce an average of 35,000 tonnes a year of nickel and 41,000 tonnes a year of copper over the first five years of operation.

Over the 24-year mine life, it expects annual production of 28,000 tonnes of nickel and 35,000 tonnes of copper.

“We are also considering the option to selldown a minority interest in the project to a strategic partner building on the significant in-bound interest we have received over the past six months,” he said.

“We’ve been having a number of conversations with downstream potential partners from the automotive and battery manufacturing sector… with the potential of producing clean, green nickel all the way through the value chain.”

Cole said the project included scope to achieve net zero emissions by 2038 with the potential transition to an electric haulage fleet after the first engine change out, along with exploring other possibilities to reduce diesel and using offsets.

The Ngaanyatjarra people this week signed the land access agreement following more than five years of discussions, with Cole saying elders would “assist in where the infrastructure will be built”.

OZ Minerals chair Rebecca McGrath said board approval was “a fundamental step towards realising OZ Minerals’ strategy to evolve into a modern minerals producer set to supply global copper and nickel markets as the world moves into the de-carbonisation and electrification era”.

The project is in the West Musgrave Ranges of WA, about 1,300km north-east of Perth and 1,400km north-west of Adelaide near the state border, the site was once owned by BHP Billiton in 2005.