Nickel deposits are generally found in two forms: sulphide or laterite. About 73% of the world's known nickel resources are laterites found mainly in tropical areas such as Indonesia, Cuba, Columbia and New Caledonia. The remaining 27% are sulphide deposits with notable locations in Canada and Russia. Like Australia, Brazil has both sulphide and laterite nickel deposits.
Currently, the majority of today’s nickel is produced from sulphide deposits, as it is easier and cheaper to mine and process than lateritic ore. However, known sulphide deposits, which are large in scale and of high nickel grade, are depleting. As a result a higher proportion of future production is expected to come from laterite deposits.
Sulphide type nickel deposits are formed in essentially the same manner as platinum deposits. These sulphide ores are generally found hundreds of metres below surface, and generally require underground mining infrastructure. The Santa Rita sulphide deposit is close to surface and able to be mined via open cut techniques. The main benefit to sulphide ores is that they can be concentrated using a simple physical separation technique called flotation.
The process of forming laterite deposits is essentially similar to the formation of gold laterite deposits. Laterites are traditional to the surface, about 15 to 20m deep, and occur where nickel sulphides have been converted to oxide ores. Being closer to the surface, laterites can be mined via open-cut methods. However, there is no simple separation technique for nickel laterites. The rock must be completely molten or dissolved to enable nickel extraction. As a result, laterite projects require large economies of scale at higher capital cost per unit of capacity to be viable. They are also generally much higher cash-cost producers than sulphide operations.