You have to be pragmatic about mining in Africa

David Russell, Argosy Minerals

A declaration in April 2000 of 'force majeure' which froze a feasibility study had been lifted at the Musongati nickel project, Argosy manager of corporate strategy David Russell said.

A United Nations study of the site estimated the nickel deposit contained about 6% of the known global supply of the metal.

Exploitation has been restricted due to the civil war between the ethnic Hutu majority and the army led by the Tutsi minority which has raged since 1993, killing at least 250,000 people, most of them civilians.

Fighting continues

Mr Russell said political changes in Burundi, initiated by former South African president Nelson Mandela and the deployment of South African peacekeepers in October last year, created a more secure environment.

Fighting between Tutsi and Hutu groups continues

A power-sharing government was installed in November under a peace accord signed in August 2000.

But Argosy's decision comes despite fierce fighting in and around the capital Bujumbura, which has killed at least 29 civilians in the past three weeks.

"You have to be pragmatic about mining in Africa," Mr Russell said.

The mine site is located some 120km from Bujumbura.

Previous studies also suggested the site may contain commercial quantities of platinum group metals, Mr Russell said.

Under a funding deal, the Burundi government would end up owning 15% of the mine, he said.