Name and Location
Tete pig iron and ferrovanadium project, Mozambique.

Client
Baobab Resources.

Project Description
A prefeasibility study (PFS) completed on the Tete project has confirmed a strategic asset of global significance, based on a one-million-tonne-a-year pig iron operation, with a mine life of 37 years. This will result in the development of 110-million tonnes of ore – 15% of the total 727-million-tonne resource – 553-million tonnes of which is defined to be underlying the 2.5 km² footprint of the Tenge/Ruoni prospect. This highlights the opportunity for expanded production scenarios of two- to four-million tonnes.

The proposed one-million-tonne-a-year pig iron production will result in about 25 000 t/y of vanadium slag by-product, with 3 300 t/y contained vanadium or 5 900 t/y vanadium pentoxide. At a vanadium recovery rate of 78%, this equates to a potential final contained vanadium capacity of 2 590 t/y.

Titanium from the slag is technically not proven and not considered an option at this stage of the project.

The modular character of the plant equipment supports a staged development model, thereby limiting initial financial exposure.

Value
The base-case scenario of one-million tonnes a year of pig iron production estimates a capital expenditure of $1.14-billion.

Duration
Not stated.

Latest Developments
Baobab Resources has reported that it could significantly scale up its Tete pig iron and ferrovanadium project, with an increased production scenario assessing a two-million-tonne-a-year operation.

The new model returned a pretax net present value (NPV) of $2.4-billion, a pretax internal rate of return (IRR) of 26%, capital expenditure (capex) of $1.98-billion and a payback period of three to four years.

Baobab’s initial PFS worked on a base-case one-million-tonne-a-year pig iron production model, which estimated a capex of $1.14-billion, returning a pretax NPV of $1.3-billion at an IRR of 22% and a payback period of four to five years.

The increased production scenario also proposes a modelled mine life of 22 years using about 20% of the global 727-million-tonne resource, which suggests further upside potential.

Baobab states that the coproduction of ferrovanadium alloy adds significantly to the project’s revenue stream and represents a byproduct credit of about $66/t of pig iron, up from the $65/t estimated by the initial PFS.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Baobab Resources, tel +61 8 9430 7151, fax +61 8 9430 7664 or email info@baobabresources.com.