Sherritt International Corp. has been out of the spotlight for most of 2010 as it builds the Ambatovy nickel project in Madagascar, of which it owns 40 per cent. And investors have understood the focus because so much of the company's future rests on the $4.5-billion (U.S.) project.

It was a bit surprising, then, that Sherritt took the plunge Wednesday to invest in Rio Tinto's Indonesian Sulawesi nickel project. Under terms of the deal, local Indonesian residents will own a 20 per cent economic interest, while Sherritt will own 46 per cent and Rio Tinto 34 per cent. Sherritt has also agreed to cough up the $110-million needed to fund a feasibility study because it has taken a controlling equity interest in the project.

Aside from the initial shock value, the new mine fits into Sherritt's strategy of diversifying away from Cuba. Plus, once both Ambatovy and the Indonesian venture are fully developed, Sherritt could be producing about 60,000 tonnes of nickel a year.

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The Sulawesi nickel is very high grade, says Desjardins Securities analyst John Hughes, who added that Rio Tinto has been chasing this asset for more than a decade and finally got approval to develop it in 2010. Mr. Hughes concedes he was a little surprised that Sherritt struck the deal before the Madagascar project starts producing early in 2011, but said the new project certainly has potential for a 30- to 40-year mine life.

He added the joint venture proves how much the mining world is changing. Although the Indonesian government can be difficult to negotiate with, "you have to go where the resources are."