Modern Mining August 2015

IRON ORE

Realising possibilities...

achieve commercial production in the second half of 2016. In Liberia, Australian explorer Tawana Resources has slowed engineering and direct design work associated with the PFS on its Mofe Creek project with the aim of conserving cash. It did announce recently, however, that the discovery of Direct Shipping Ore on one of its newly acquired tenements offered “a potential strategic opportunity to mine and supply high-grade feed to an early start-up, low capital intensity proj- ect at a significantly reduced OPEX and CAPEX cost, due to very simple crushing and screening requirements only (i.e. no beneficiation).” Although it is not normally considered an iron ore destina- tion, Nigeria reportedly has iron ore resources amounting to around 3 billion tonnes (and some limited production). There is also at least one iron ore project under development. This is Agbaja , owned by ASX-listed Kogi Iron, headquartered in Perth. Kogi has completed a PFS which confirmed the viability of a 5 Mt/a project (with a capex of nearly US$500 million). Kogi, however, has said this year that it is actively pursuing a “value realisation process”, which means that it is open to selling the asset or alternatively securing some sort of joint venture. Moving further north to Mauritania, the country is the sec- ond biggest producer on the continent after South Africa. All of its production– roughly 13 Mt/a – is through SNIM (Société Nationale Industrielle et Minière), mainly owned by the state, which operates several mines. Glencore (through its subsidiary Sphere Minerals) was planning to build the US$900 million Askaf mine in the country, with an initial capacity of 7,5 Mt/a, but the project has now been put on hold until the iron ore price provides some relief. Summing up, Africa clearly has tremendous iron resources which have – by some estimates – the potential to support an annual production of 400 Mt, which is in excess of what is cur- rently being produced by Brazil and Australia’s Pilbara region, the two biggest sources of iron ore in the world. The problem is that many of the African projects outlined here would need an iron ore price at least US$30/tonne better than what it cur- rently is (around US$60/tonne) to make economic sense. This being the case – and with many forecasters predicting further falls in the price – it seems fair to say that Africa’s emergence as the world’s next big supplier of iron ore is still years away.  Drill rig working at Ferrum Crescent’s Mooonlight iron ore project in Limpopo Province, South Africa (photo: Ferrum Crescent).

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August 2015  MODERN MINING  43

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