Modern Mining August 2015

IRON ORE

or near the town of Thabazimbi for the pro- duction of 6 Mt/a of Direct Reduction (DR) and blast furnace grade iron pellets for export or domestic sale. InMay this year, FerrumCrescent announced it had signed an MoU with Principle Monarchy Investments (PMI) – described as “a BEE con- trolled South African company with extensive commercial interests in South Africa.” In terms of the MoU, PMI will acquire a 39 % stake in the project for a consideration of R142 million, with the incoming funds to be directed towards the BFS, with the next key stages to include large scale pit design and sampling work and assessment of the need for a bulk sample, as well as definitive metallurgical testing for full process design. In its latest quarterly report (issued at the end of July), Ferrum Crescent said it was expecting the first R2 million interim funding payment shortly (upon receipt of which the MoU will become legally binding). A major advantage that South African proj- ects have as opposed to those further north in Africa is that (current power constraints notwithstanding) they have access to gener- ally good infrastructure. In the rest of Africa, developing iron ore deposits often means that mining companies have to address huge infrastructure deficits. This is the case with Sundance’s Mbalam-Nabeba project, for exam- ple, which – to get into Stage 1 production of 35 Mt/a of Direct Shipping Ore (DSO) – needs a 510 km rail line from Mbarga in Cameroon (and a 70 km rail spur connecting to Nabeba

through the production of lump products.” Kumba also announced in July that it had instituted closing procedures for its Thabazimbi mine in Limpopo Province, by far the smallest of its three mines. It has given several reasons for this decision including the fact that the mine is now more than 80 years old and has – over the past 15 years – had its closure post- poned six times; difficult mining conditions; high operating costs due to high waste stripping requirements; and a recent slope failure. One suspects, however, there might have been some chance of keeping the mine operating if the iron ore price environment were more buoyant. Kumba and Assmang (which owns the Beeshoek and Khumani mines in the Northern Cape) are the two main players in South Africa’s iron ore mining industry but there are several aspirants, among them Ferrum Crescent, listed on the ASX and AIM, which has the Moonlight project in Limpopo Province, and AIM-listed Ferrex, which is developing the 1,8 Mt/a Malelane project. Ferrex announced earlier this year that Malelane had been placed on hold because of the low iron ore price (it is now con- centrating its energies on its Nayega manganese project in northern Togo) but Ferrum Crescent appears to be hard at work on the development of Moonlight, now in the BFS phase. The project involves the mining and ben- eficiation of the Moonlight magnetite deposit – which was explored in the 1980s and 90s by Iscor – to produce a high-grade concentrate for transport to a pellet manufacturing facility at

The Canga camp of Rio Tinto’s Simandou project in Guinea (photo: Rio Tinto).

A major advantage that South African projects have as opposed to those further north in Africa is that (current power constraints notwithstanding) they have access to generally good infrastructure.

August 2015  MODERN MINING  39