Poseidon Nickel is buying the Black Swan mine from Russian giant Norilsk Nickel.

The move is part of Poseidon’s mission to get its Windarra nickel mine back into operation.

Poseidon, a firm backed by Andrew “Twiggy” Forrest, says the deal will end worries over where ore could be processed, as Black Swan comes with a nickel sulphide plant.

The purchase will also slash capital expenditure for Windarra by up to $250 million.

“It’s the answer we needed. It probably takes a quarter of a billion dollars out of our capital requirements and a year out of the schedule, so for us it’s a huge step forward,” Poseidon chief David Singleton said.

Poseidon will either recommission Black Swan’s nickel sulphide plant in its current location - about 53km north-east of Kalgoorlie - or relocate it to Windarra. The Black Swan mine comes with some existing nickel resources as well.

The company must weigh the benefits of the current location – connection to a power grid, and a workforce ready and waiting in Kalgoorlie - against the cost of moving ore from Windarra to the plant.

The Windarra deposit sits about 260 kilometres north-east of Kalgoorlie, and was in operation between 1974 and 1995.

Insiders expect the site to produce about 9600 tonnes per year over a 10-year life span, if it can be brought back to operation.

Poseidon will not say what it is paying for Black Swan, but has indicated it will need to drum up some additional funds.