Strike and Apurimac plan 20 MTPA iron ore mine in Peru

August 7th (Steel Guru) – BNamericas reported that Australia’s Strike Resources along with Apurímac Ferrum and two other Peruvian partners are planning to launch a 20 million tonnes per annum iron ore mine in Peru in mid 2012.

A recent pre feasibility study on the project in south central Peru’s Apurímac department laid out a USD 2.6 billion CAPEX, 15 year mine life and 20 million tonnes per annum production, making it the largest iron ore mine in Peru.

But before a positive final feasibility study can be carried out for the mine, it must increase the roughly 172 million tonnes of inferred resources grading 62.3% iron ore to at least 300 million tonnes and upgrade the category of mineralization.

Mr Federico Schwalb GM of Apurímac Ferrum said that the study contemplates construction of an open pit, processing plant, a port and a roughly 360 kilometers long pipeline to transport the product from the mine to the port. He added that the companies involved are also considering transporting the product by train.

In addition, the project’s partners are involved in a dispute concerning their respective stakes in the property, but which does not impact Apurímac Ferrum and also is not obstructing the advance of the project.

Strike Resources is also involved with Apurímac Ferrum in a project in Cuzco department, which is at a conceptual stage, although exploration is being carried out. Presently Shougang Hierro Perú, which operates in Ica department, is the country’s only iron ore producer. Shougang sold 7.71 million tonnes of iron ore in 2007 and is planning to double capacity to 16 million tonnes per annum by mid 2010.

Guinea rattles Rio on iron ore project

August 4th (The Age) – POLITICAL intrigue and rising resources nationalism has raised fresh doubts over Rio Tinto’s grip on its $US6 billion ($A6.46 billion) Simandou iron ore project in Guinea.

Rio has portrayed the proposed development of the huge iron ore deposit as a Pilbara in the making.

And because of its importance as a growth project, it is a key plank in Rio’s defence against BHP Billiton’s $170 billion takeover bid.

But a rattled Rio has revealed that it has received correspondence from Guinean President Lansana Conte purporting to rescind the Simandou mining concession.

Along with its partner in the project, the World Bank’s International Finance Corporation, Rio is studying the issues raised in the correspondence.

Rio said it was “confident that its arrangements are in all respects in conformity with Guinean laws and that it has complied with its obligations”.

It said it had negotiated and executed the mining concession in “full transparency with the Guinean Government”.

Rio’s potential loss of Simandou came as President Conte sacked Secretary-General Mamady Sam Soumah. State TV said Mr Soumah would be replaced by Alpha Ibrahima Keira, the president’s son-in-law.

It was Mr Soumah who first raised tenure concerns for Rio over Simandou in May when he said the Government would be reconsidering the concession because of irregularities in the original agreement. Just as ominous, Guinea’s latest threat to Rio’s Simandou ownership follows the return to Beijing of a Chinese trade delegation offering billions of dollars of investment in Guinea in return for Chinese ownership of resource projects.

There is long-running unease among foreign resource companies in Guinea because of a special committee set up to renegotiate all mining agreements, ostensibly to capture a bigger share of the boom in commodity prices.

Even so, Guinea’s Mines Minister, Ahmed Kante, said early last week that Rio’s Simandou iron ore mine was on track and would benefit Guinea and the company.

The question over Simandou ownership could not come at a worse time for Rio. In May, Rio called on the market to start ascribing some value for the project in valuations of the company — an effort to close the widening gap between the imputed value of BHP’s 3.4-for-1 conditional scrip bid and Rio’s share price.

But shortly after Rio’s call to the market, the first query on Simandou’s mining concession from the Guinean Government surfaced. Somewhat ironically, it was BHP managing director Marius Kloppers who some time later warned about getting too excited too early about projects subject to high levels of sovereign risk. He used BHP’s bauxite-alumina project plans in Guinea as an example.

Rio has spent or committed to spend $US300 million on Simandou.

Polaris iron project to cost AUD 130 million

July 30th (Steel Guru) – It is reported that a pre feasibility study for West Perth based Polaris Metals’ Carina deposit has valued initial capital costs at between AUD 120 to AUD 130 million.

Polaris in an announcement said that it would make a formal decision on that recommendation once it completed studies of the preferred option for rail and port infrastructure by the end of 2008. It hopes to have two reverse core drilling rigs and one diamond rig on the site by August 2008, with work on flora and fauna studies also ongoing.

FMG seeking to move into New Zealand

July 30th (ABC News) – The Fortescue Metals Group, headed by Andrew Forrest, is making its first foray into international mining by applying to test for minerals in a vast area in New Zealand.

Fortescue Metals Group (FMG) has made several applications to test for iron ore sands on the west coast of the South Island in an area covering 4,000 kilometres.

The venture has upset a group of miners who claim their century old gold mining business could be jeopardised.

Bluescope Steel is already dredging iron ore sands along the North Island.

It is understood other miners including Rio Tinto and China’s Sinosteel also have interests in the region.

FMG’s Graeme Rowley says if its applications for permits are approved it will consult with concerned groups.

“At this stage it is so early in the process that we are not aware of some of the challenges that obviously through the consultation we will be involved in all of the issues that are raised by local community,” he said.

“Obviously through the consultation we will be involved in all of the issues that are raised by local community and obviously if certain things become prohibitive then obviously the tenders will not be granted.

 

Too large

 

Keith Brodie from New Zealand’s mining lobby Minerals West says FMG’s application is too large and the governing body needs to scrutinise it closely.

“[To] make sure it complies with the minerals program that covers the whole of New Zealand,” he said.

“Also to make sure that they’re not sacrificing one part of the minerals industry for another so it has to be carefully considered.”

Rio to Spend $2.15 Billion on Brazil Iron Ore Mine

July 29th (Bloomberg) – Rio Tinto Group, the world’s second- largest iron ore producer, plans to spend $2.15 billion raising output of the steelmaking raw material sixfold at its Corumba mine in Brazil.

Production will rise to 12.8 million metric tons a year, from 2 million tons currently, London-based Rio said today in a statement. The company will conduct a study, which will be completed next year, into expanding to 23.2 million tons.

Rio, which also operates mines in Australia and Canada, is seeking to triple output to 600 million tons in a bid to repel a hostile $148 billion offer from BHP Billiton Ltd. Contract iron ore prices rose to a record this year on soaring steel demand in emerging economies including China, the largest consumer.

Output from the enlarged Brazilian mine is expected to commence in the fourth quarter of 2010, Rio said. Two ports will be built, including one in neighboring Uruguay. The ore from the mine will be moved along the River Paraguay before being loaded onto ships.

Rio produced 179 million tons of iron ore last year. Corumba will supplement output from its Pilbara mines in Australia, the 59 percent owned Iron Ore Co. of Canada and the Simandou project in Guinea.

Brazil’s Cia. Vale do Rio Doce is the world’s biggest iron- ore producer.

Boskalis bags iron ore port contract from Rio

July 29th (Steel Guru) – It is reported that Royal Boskalis Westminster has been awarded a EUR 145 million contract by Rio Tinto for the expansion of its iron ore port facility at Cape Lambert in Western Australia. The contract is due to be completed in the second half of 2010.

The assignment includes the dredging of new berth pockets, turning and departure basins and an access channel and will be executed with a combination of cutters and hoppers. The contract is conditional on Rio Tinto obtaining various approvals, including environmental.

Boskalis officials said that “Global demand for maritime infrastructure continues to be strong. Specifically, large scale projects in such as Cape Lambert are driven by the strong demand for energy and natural resources. Boskalis can successfully capitalize on these developments through its global presence and its selective contracting policy.”

Mr Peter Berdowski CEO of Boskalis said that “As a consequence of the recently acquired projects in Dubai and Australia, our fleet is well utilized through 2009. The margins on these new projects are healthy despite increases in operational cost items such as fuel and steel. Furthermore, the margin development on current projects is in line with our previous expectations.”

MMX plans sevenfold iron production increase by 2013

July 27th (Steel Guru) – BNamericas reported that Brazilian company MMX Mineraçao is projecting a sevenfold increase in its iron production to 40 million tonne per year by 2013, with 6.3 million tonne coming from its operations at Corumbá and 33.7 million tonnes from new unit MMX Sudeste.

MMX in a statement said that this and other expansions will require investments of USD 1.5 billion in the 2008 to 2015 period, which have been approved by MMX’s board of directors.

Currently MMX Sudeste made up of MMX’s Serra Azul unit and a Greenfield project called Bom Sucesso produces 4.3 million tonne per year and Corumbá 1.9 million tonne per year.

MMX added that the projects at MMX Sudeste will require USD 1.1 billion and Corumbá USD 62 million. Most of MMX Sudeste’s production is headed overseas.

MMX is also planning to build a USD 333 million billet plant in Mato Grosso do Sul state that will start up at 34,000 tonne per year in 2010 and reach 452,000 tonne per year in 2012.

TISCO Yuanjiacun iron ore project starts construction

July 25th (Steel Guru) – Shanghai Securities News reported that the cornerstone laying ceremony of TISCO’s Yuanjiacun iron ore project was held on the Jul 22nd 2008 in Lvliang of Shanxi Province.

It is not only a symbol that some 1.25 billion tonne of reserve in this area will be utilized, but more importantly, it will help pin down the rising international iron ore prices, soften domestic dependence on overseas resources and enhance the speaking right of Chinese steelmakers in the world arena.

It is learned that the mine is mainly deposited with magnetite and hematite, boasting desirable mining conditions which make opencast working preferable. But many ore types, high hardness and complicated components, as well as difficulties in grinding and separating have made the mine unable to be prospected and developed on a large scale until now.

The mine is reported to serve 40 years, 34 years as stable serving term, and can produce 7.418 million tonne concentrate with grade of above 65% with a metal recovery rate of more than 70%.

The project is funded by Taiyuan Iron & Steel Company Ltd with a total of over CNY 10 billion of which CNY 8.8 billion is for main work. TISCO will take the construction work and it is expected the project will be completed in three years.

Iron Mountain Mine Readies for Q3 Startup

July 24th (Mainstreet Business Journal) – Palladon Iron Corporation has signed a five-year contract with Gilbert Development Corp. to be the company’s contract miner on the Iron Mountain project near Cedar City.

Gilbert will perform all mining duties at the site. Palladon personnel will oversee Gilbert’s operations and will conduct all operations for the mix of ores to be hauled to the stockpile, survey primary elevations of the benches, toe and crest limits for the mining pit, and percentage grade on all roads, based on permitting requirements.

Start of operations is expected in the third quarter of 2008. Final construction of facilities and pre-production activities at the site are currently underway.

Palladon has acquired 100 percent of the project and has in place financing more than adequate to fund all capital and operating costs to commence production of run-of-mine ore to fulfill Palladon’s contract to deliver iron ore to China Kingdom International.

Palladon Iron has signed a contract with GSL Electric to provide secondary power at the site. All power poles, wire and switches for the 138kVA line are installed and ready for power. Power should be operational by August 1, 2008.

“This has been a very exciting last few months with the signing of the long-term contract with CKI and buying out Luxor Capital Group’s stake in the iron mine. Palladon now controls the entire project, has sufficient working capital, and is at a tremendous pace to begin shipping by Q3 of this year,” said Donald G. Foot Jr., president and CEO of Palladon Ventures, Ltd.

Gindalbie starts $1.8bn spending spree

July 22nd (WA Business News) – Perth-based Gindalbie Metals Ltd has started its spending spree for its $1.8 billion Karara iron ore project in Western Australia by placing a $70 million order for key long lead items. Gindalbie and its joint venture partner, Anshan Iron & Steel Group Corp, have placed equipment orders with Polysius Australia, part of the Germany’s ThyssenKrupp group, with delivery expected by March 2010.

The orders are for two high pressure grinding rolls and four large ball mills for the crushing and grinding phase of the process plant. Earlier this year Gindalbie expanded the scope of its iron ore business with its feasibility study to look at a 12 million tonne per annum start up operation, up from 8Mtpa, at Karara.