JOHANNESBURG (miningweekly.com) - Investor consortium Rare Metals Industries (RMI) on Thursday announced the launch of a project aimed at constructing a titanium and other metals beneficiation complex in South Africa, which would cost between $1,2-billion and $1,5-billion.
The shareholders and partners in the project; the National Empowerment Fund, the Industrial Development Corporation, Magnesium & Metals and, TJTI, have committed to equally fund the R40-milllion for the prefeasibility study for the project, which is currently under way.
The agreement between the partners is structured in an unincorporated joint venture, which would later be converted into a shareholding company. RMI is a venture with South African, Russian and US investors.
RMI chairperson Donovan Chimhandamba told Mining Weekly Online that the prefeasibility study would be completed in the next six to eight months. "Out of that study, we will then make a decision based on a scenario of different options. The route that we choose, will eventually lead into our bankable feasibility study (BFS)."
The finalisation of the BFS was likely to take another year, while the financing of the $1,2-billion plant was expected to take anything between six and 12 months.
Chimhandamba noted that it was unlikely that such a large sum could be raised within South Africa and, added, that different capital raising strategies were being considered. "Pending on the gap left by private equity and project financing, we would consider listing some shares," he said.
The proposed plant would be the world's first integrated metals plant producing titanium, zirconium, magnesium and silicon.
It is envisaged that at full operational capacity, the plant would produce 50 000 t/y of magnesium, 15 000 t/y of titanium, 8 000 t/y of silicon and 2 000 t/y of zirconium, coupled with some derivative products.
Speaking in Johannesburg, Chimhandamba said that South Africa had the second-largest reserve of titanium and zirconium in the world, but had never really reaped the full benefit of this industry. "By only beneficiating 3% of the products that South Africa export, the country would generate an additional $500-million in export value from titanium alone."
It was expected that the project would generate at least 2 800 skilled jobs during the construction phase and more than of 5 000 permanent jobs once the plant was fully operational.
The consortium expects first production in the second quarter of 2015.
The consortium indicated that it hoped not to be entirely dependent on State-owned power utility Eskom for its electricity supply. The project would need about 150 MW of power, depending on the configuration chosen during the prefeasibility study.
"As part of the prefeasibility study, we are considering a cogeneration plant or copartnering with another project, which would make this project energy positive," concluded Chimhandamba.