JOHANNESBURG (miningweekly.com) – Aim-listed Baobab Resources on Thursday said a definitive feasibility study was under way at its proposed Tete pig iron and ferrovanadium project, after the positive outcome of a preliminary study.
The Mozambique-focused mineral resource development company said the prefeasibility study (PFS) revealed the potential development of a low-cost one-million-ton-a-year pig iron openpit operation with a mine life of 37 years.
This would result in the development of 110-million tons of ore – 15% of the total 725-million-ton resource.
Scoping level assessments into two-million and four-million-ton-a-year operations were ongoing.
The group said the region, a 2.5km2 area of the Tenge/Ruoni prospect, held a Joint Ore Reserve Committee-compliant resource of 550-million tons of ore.
The resource could be developed at an estimated initial capital cost of $1.4-billion, including $1-billion for the pig iron plant, with the study estimating a payback period of four to five years.
The Tenge Stage 1 pit would be mined first over the next 23 years, followed by mining activities in the Ruoni North Stage 1 and 2 pits starting from the eighteenth year and twenty-fifth year respectively until the end of the study period.
The operation would also produce about 3 000 t/y of ferrovanadium alloy, which was expected to deliver by-product revenues of $75-million a year, as well as additional vanadium and titanium by-products.
“With the results of this PFS, we now have independent confirmation of the Tete project's viability and, more importantly, its compelling economics,” commented Baobab MD Ben James.
The Tete project would benefit from the significant infrastructure investments already being made in the region as Mozambique ramps up to a globally significant mining and industrial hub.
“The project is strategically located to access abundant, low-tariff hydroelectric power and thermal coal, two critical components in the beneficiation of iron-ore and downstream smelting,” he explained.
Mozambique continued to develop its electricity and power cogeneration, ports, rail and mine-to-rail infrastructure.