With visible signs of a global economic and commodity revival, renewed focus will be placed on commodities that are key to fast-tracking infrastructure projects significantly affected by the global economic crisis.

One such commodity is iron-ore, which is a key ingredient in steel production.

Prior to the onset of the economic crisis, countries such as China and India showed economic growth of between 9% and 11%. However, the economic crisis had a significant effect on these countries, notably China. However, growth is set to pick up in 2010 and, owing to this, there is renewed interest being shown in iron-ore projects, particularly
in China.

SRK China, part of the SRK Consulting group, a firm of 
engineers and scientists, was commissioned by mining com-
pany Hua Yi Copper Holdings to conduct a full due diligence 
review of the Longxin project, in Chengde Hebei province.

Hua Yi contracted SRK China to produce the independent 
expert report required for major transactions on the Stock Exchange of Hong Kong .

The Longxin project is located close to China’s capital, Beijing. The mine contains low-grade ore where an average total iron grade is 21,46% and the average magnetite content is about 11,29%. 
That is about 53% of the average total iron content.
 It is a typical magmatic deposit, 
a product of late-stage magma segregation.

The Longxin project operates four openpits inside the mine boundary. During SRK China’s site visit, only two pits were 
operating. 
One hydraulic shovel, with a capacity of 1,2 m3, and one front-end loader were assigned to each mining face. 
The truck fleet consisted of ten 20-t trucks and thirty-five 25-t trucks.

The operation runs on 12-hour-day shifts. Each truck has the 
capacity to make 20 return trips from the mining area to the ore processing plant daily. The surrounding rocks are primarily feldspar or pyroxene diorite and the pit walls appear to be moderately 
stable. While SRK considers the current parameters proposed for the Beipuzi openpits to be
appropriate, more work is 
needed to better understand the geotechnical conditions at the mine and to confirm that the pit wall design criteria meet those conditions. SRK notes that 
double-benching would only be practical if rock conditions are good, and attention has been given to forming final walls with minimum damage.

SRK has assisted mine management to formulate a detailed mine design by the end of the year for the next five years. 
The mine does have measures in place to blend ores with various grades to optimise production. In 
addition, further geological 
exploration work is under way and ore resources are expected to
increase to provide a basis for the mine’s sustainable development. The company reports that long-term planning should be com-
pleted as soon as possible.

Mine production primarily 
uses the contract mining and shallow-hole blasting technique, which SRK reports is labour 
intensive and inefficient.