British firm Consolidated Nickel Mines (CNM) plans to restart production at Zambia's Munali nickel mine in the first quarter of next year, its local subsidiary said on Saturday.
The decision to restart output at the mine comes despite plans by the government to hike mining taxes to bring down mounting public debt.
The tax increases in Africa's second-largest copper producer have been strongly criticised by mining firms, which say they will hobble the industry.
The Munali mine was placed on care and maintenance at the end of 2011 due to low nickel prices and poor operational performance.
CNM's local subsidiary, Mabiza Resources Ltd, said in a statement that it had developed a new geological model and mining method that would enable it to extract nickel from the ore body at Munali more efficiently.
"These changes have the potential to reduce operating costs to make the mine economical at low nickel prices," the statement said, adding that finance of around $40 million had been secured to restart the mine.
The Munali mine, which is 75 km (45 miles) south of the Zambian capital Lusaka, was expected to produce around 56,000 tonnes of nickel concentrate in 2011.
(Reporting by Chris Mfula Editing by Alexander Winning).