JOHANNESBURG (miningweekly.com) – Work is expected to begin in September on a pilot plant that will convert stockpiled magnetite fines into metallic iron at Palabora Mining from the end of June next year.

Iron Mineral Beneficiation Services (IMBS), in which South Africa’s State-owned Industrial Development Corporation holds shares, plans to grow the initial 50 000-t/y R120-million pilot plant in modules to 500 000 t/y.

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.

IMBS intends operating the iron-making plants with IIBG, a subsidiary of Russian steelmaker OAO Severstal.

The two companies are currently conducting a prefeasibility study into the construction of a two-million-ton-a-year iron plant at Sept-Iles in Quebec, Canada, where there is access to hydropower at 4c/kWh and where there is a nearby iron-ore export port into the heart of the US steelmaking region.

The development of the Canadian plant is programmed one year behind the Palabora plant, which has access to 240-million tons of 58%-iron magnetite on surface, which has arisen from decades of mining activity at Palabora Mining, which is run by large diversified major Rio Tinto and partly owned by Anglo American (see also Mining Weekly of October 8, 2010, and video).

While a steel plant with blast furnace costs some $1.5-billion a million tons to build – and the most economic minimum capacity is two-million tons a year – it is economically viable to build an electric arc furnace starting at 50 000 t/y.

While electric arc steelmaking is growing, ferrous scrap supply has a finite horizon and IMBS technology is tailored to supply a ferrous scrap supplement to the growing electric arc furnace steelmaking market.

IMBS intends accessing the substantial volumes of iron-oxide fines that are stockpiled on surface, as at Palabora, and which are increasing by 5% to 12% a year.

“There’s no technology that we have come across at this stage that can process without agglomeration,” IBMS CEO John Beachy Head tells Mining Weekly Online in a video interview at the company’s base at Thermopower Process Technology in Olifantsfontein.

Other key participants in the new venture are IMBS director Paul Yammin and Thermopower head Derek Oldnall.

The IMBS process does not require the use of expensive coking coal and is able to make do with far cheaper thermal coal.

The prototype pilot plant to be built at Palabora is expected to confirm that the process self-generates sufficient energy to run the total process.

“We, therefore, can go to any remote place, bring coal in and take iron out,” Beachy Head tells Mining Weekly Online.

The briquettes can also replace scrap used in blast furnaces, which represents another market.

“There’s no shortage of markets for what we’re trying to do,” he says.

Currently, the iron-ore mining companies, using the unsophisticated technology, and the scrap suppliers are making the best profits.

Three-quarters of world steel is currently produced from blast furnaces and 25% from electric arc furnaces.

Because blast furnaces are environmentally unfriendly, the US and Europe are no longer granting licences for the building of blast furnaces.

Other issues are the scarcity of coking coal required for blast-furnace steelmaking, rising energy costs and iron-ore shipping costs.

Currently, 800-million tons of iron ore are being shipped a year globally and if current steel production of 1.3-billion tons a year were to double to 2.5-billion tons a year in the next 20 years, much more than that would have to be shipped.

Metallic iron’s bulk density is 4.4 g/cm³ compared with only 1.8 g/cm³ for iron-ore and 93% of the metallic product is iron compared with only 63% for iron-ore at the same shipping cost.

Fundamentally, 1.5 times more metallic iron can be moved, with the worth of that iron 3.5 times the value of iron carried in ore and with it taking up only 40% of the space required on ships for the transport of iron-ore.

“Electric steelmaking is the preferred option; availability of scrap is the dictator,” says Beachy Head.

Although iron-ore is selling at $180/t and scrap at $430/t, overall iron-making costs from iron-ore exceed those from scrap.

IMBS's five-year vision is to be producing one-million tons of metallic iron in South Africa with a plan for another million tons, and internationally a two-million-ton-a-year plant in operation, going to ten-million tons.

“From the South African perspective, once we have a lot of metallic iron available, we can base an entire steel industry on it.

“We can create massive employment downstream from that and instead of selling iron-ore, we can sell a highly valuable product.

“Effectively, if we produced the equivalent of the 35-million tons of iron-ore being produced a year in South Africa as metallic iron, it would change the face of what we do,” he adds.

To watch a video on IMBS CEO John Beachy Head, go to www.miningweekly.com and click on 'Multimedia' and then on 'Video Clips'

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