Saldanha Bay. $2,1bn titanium, zirconium project decision pending.March 15, 2011 by: admin
Investor consortium Rare Metals Industries (RMI) shareholders and partners will decide on whether to continue with the estimated R15,3-billion ($2,1-billion) project over the next three months.
The shareholders and partners in the project, broad-based black economic- empowerment (BBBEE) transformation solutions company the National Empower- ment Fund, development finance institution Industrial Development Corporation and light metals trader Magnesium & Metals, equally funded R40-million for the prefeasibility study, which was completed by Russian engineering company SME Engineering.
RMI operations director Tim Victor tells Mining Weekly that, although pre- feasibility studies have an accuracy of about 30%, the results were positive with the project looking to be economically and strategically viable.
“South Africa has rich heavy mineral sands deposits, including ilmenite, rutile and zircon. Rutile and zircon are exported in their raw mineral form, while ilmenite is smelted for the recovery of its iron content and its titanium-rich slag is exported,” he says.
International companies beneficiate the minerals, produce various metal components and sell them back to global markets, including South Africa, at higher prices.
Victor says that RMI has secured a conditional agreement with mining giant Exxaro for the supply of the necessary zircon sand and titanium slag feedstock from Exxaro’s Namakwa Sands smelter, in Saldanha Bay, in Western Cape province.
The yearly turnover for the beneficia- tion plant is expected to be between R11,6-billion ($1,6-billion) a year and R13-billion ($1,8-billion) a year. The plant’s operating costs are estimated to be between R7,9-billion ($1,1-billion) and R8,7-billion ($1,2-billion).
“Should the decision be made to continue the development of the plant, these figures will be confirmed or adjusted as needed during the bankable feasibility study (BFS),” he says.
An agreement has also been reached with steel giant ArcelorMittal South Africa for the purchase of land in Saldanha for the construction of the plant.
First production is expected in the second quarter of 2015 and, at full opera- tional capacity, the plant will produce an estimated 15 000 t/y of titanium and 2 000 t/y of zirconium, as well as derivative products.
A portion of the prefeasibility study was dedicated to identifying alternative means of power supply. RMI is interested in reducing its dependence and reliance on State-owned power utility Eskom for electricity supply and is considering establishing a cogeneration plant to feed the plant’s electricity requirements, Victor says.
Further, reviews of viable alternative power options will be examined in the BFS.
The Next Step
“The next stage of the project is the BFS, which, at a cost of about R320-million, will likely conclude at the end of 2012. The BFS will include a comprehensive front-end engineering and design package,” says Victor.
Simultaneously, RMI will apply for environmental approvals and raise the funds needed for construction. This is to ensure that, on completion of the BFS and confirmation of the figures estimated in the prefeasibility study, construction could start immediately.
The Importance to South Africa
There are many benefits to establishing such a plant in South Africa, Victor says.
“The plant will employ between 2 500 to 2 800 permanent employees at full production, in addition to implementing a minerals beneficiation strategy. “A potential downstream industry development is also likely to emerge,” he says.
Further benefits can include much- needed skills transfer through RMI’s partnerships with various Russian technology institutes, the creation of new manufac- turing and industrial capacity, invest- ment in new fixed capital and increased BBBEE participation in the early stage of the project.
Another benefit is the increase of South Africa’s export earning potential, the reduction of import dependency, as well as increased coinvestments and links with foreign direct investment.
The proposed plant, should it materialise, will be the world’s first integrated metals plant producing titanium, zirconium and possibly silicon, says Victor.
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