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By Shapi Shacinda

LUSAKA (Reuters) – Australia’s Albidon Ltd. plans to expand its concentrator at its Zambia nickel mine after it is fully commissioned in 2009, the company said on Thursday.

Albidon Ltd., which operates the Munali Nickel mine in Zambia, said it intended to expand the concentrator to 1.2 million tonnes capacity per year from 900,000 tonnes capacity to achieve nickel output of 10,000 tonnes per year.

Albidon said in a statement its board of directors had approved the expansion of the Munali concentrator, where the first nickel concentrate was produced in July, and production exceeded expectations.

“The first nickel-copper-cobalt PGM (platinum group metals) concentrate has been produced at the Munali Nickel Project. The focus at Munali is now to complete commissioning of the concentrator and to increase production to full capacity in early 2009,” Albidon said in a statement.

It said mining at the Munali Nickel Project was above expectations, with 134,662 tonnes of ore stockpiled at the end of the second quarter.

“Mining at the Munali Nickel Project continues to exceed budget with (over)100,000 tonnes at 0.7 – 0.8 percent Ni produced since the commencement of ore production in the March 2008 quarter,” Albidon said.

The nickel, copper and cobalt concentrate stockpile would be sold to China’s Jinchuan Group.

Albidon said it had initiated a strategic review of its growth options and appointed the Royal Bank of Canada to assist it in “assessing potential corporate opportunities and to progress its ongoing growth strategy.”

Munali is Zambia’s first nickel producing mine in the mainly copper and cobalt producing country.