JOHANNESBURG (miningweekly.com) – The raising of R800-million capital is under negotiation for the next stage of the iron-from-waste plant in South Africa’s Limpopo province, where a prototype plant is on track to be operational in the first half of 2013.
This follows a major breakthrough in the process used, which is now energised by its own offgases only and does not require electrical power, as originally envisaged.
Iron Mineral Beneficiation Services (IMBS) CEO John Beachy Head tells Mining Weekly Online – see also video attached – that the next stage of the project at Palabora Mining Company will be for a 500 000 t/y plant.
On budget and on track to produce metallic iron next year, the initial 50 000 t/y prototype plant is being built at a capital cost of R120-million.
In anticipation of the prototype plant being successful, the R800-million capital raising has already begun for the next stage of the pioneering project, which is attracting international interest.
“We’re already in negotiations to put that money together to roll that plant out.
“At the moment, the people we’re talking to are mezzanine and debt funders,” Beachy Head reports.
The shareholders of IMBS – a company which is being partnered by South Africa’s State-owned Industrial Development Corporation and which is also receiving strong support from the Limpopo government – include Jonah Capital, headed by Sir Sam Jonah, with 40% and OAO Severstal of Russia with 33%.
The metallic iron – referred to as super scrap, which replaces traditional ferrous scrap in steelmaking – is being targeted at the 700-million-ton-a-year global scrap-replacement market.
A feasibility study is under way for the construction of two plants of 500 000 t/y each and Beachy Head anticipates one-million tons of super scrap being produced in South Africa in the next five years, a large portion for domestic steelmaking and the rest for export.
IMBS has secured a 20-year agreement with Rio Tinto-managed Palabora Mining Company for the supply of 800 000 t of material from the company’s large 240-million-ton surface stockpile of 58%-iron magnetite content, which has arisen from decades of mining activity.
The company is targeting production of metallic iron at under $200/t to compete against ferrous scrap, which is selling at $400/t.
The technology to produce the cold-briquetted metallic iron has been licensed to International Iron Beneficiation Group (IIBG), which will deploy it globally and pay royalties to IMBS, which intends operating the iron-making plants with IIBG, an OAO Severstal subsidiary.
News is also imminent on the study into the construction of a two-million-ton-a-year iron plant at Sept-Iles, in Quebec, Canada, where there is a nearby iron-ore export port into the heart of the US steelmaking region.
The development of the Canadian plant has been programmed one year behind the Palabora plant, the process for which was originally based on 50% offgases and 50% electricity, but which will now use only offgases.
“It’s been the biggest breakthrough for us. What we are now is 100% gas-fired, so we can go anywhere in the world and with the process offgas, we can run our technology. We don't need any electricity other than to drive pumps, electric motors and instrumentation,” Beachy Head tells Mining Weekly Online.
The process also uses thermal coal, giving the technology the flexibility of operating in the remotest of locations.
The big saving in production cost is based on being able to operate where the ore is located.
Iron recovery takes place on the ore site with logistics then based on a product worth $400/t rather than one worth $150/t.
The company is, however, still in a period of transition from being a technical development business to being an operational iron-making business.
But if that transition is successful, strong demand is expected to follow.
“The demand we’ve had so far from people talking to us is in the region of 15-million tons,” Beachy Head adds.
The company has had enquiries from India, Indonesia and South America.
The application of the modularised process is wide-ranging and can be adopted by small run-of-mine iron-ore juniors to iron-ore majors.