The project, which will require an investment of around A$1.7bn ($1.13bn), includes the Nebo and Babel nickel-copper deposits along with the Succoth copper deposit.
The firm plans to achieve first concentrate on the project in the second half of 2025.
Furthermore, the mining company has signed credit-approved commitment letters with major relationship banks for a syndicated term loan facility of A$1.2bn ($790m) to support the project development.
OZ Minerals chairman Rebecca McGrath said: “The board’s approval of West Musgrave is a fundamental step towards realising OZ Minerals’ strategy to evolve into a modern minerals producer set to supply global copper and nickel markets as the world moves into the de-carbonisation and electrification era.”
Commenting on the decision, OZ Minerals CEO Andrew Cole said: “Investment approval for West Musgrave unlocks one of the largest undeveloped nickel projects in the world and, with expected lowest quartile costs, it is set to generate ~$9.8bn undiscounted cash flow over its 24-year operating life.”
Cole revealed the company is also weighing the option of divesting a minority stake in the West Musgrave project to a strategic partner.
The miner expects the project to have an average annual production of around 28,000t of nickel. It is estimated to produce 35,000t of copper over its operational life of 24 years.
The project’s processing plant, which will be delivered by GR Engineering Services, will have an initial capacity of 12 million tonnes per annum (Mtpa).