Mining Weekly

JOHANNESBURG (miningweekly.com) – South Africa-based engineering and project management company DRA on Friday announced that it had been awarded the study of the process plant for the next phase of the Zanaga iron-ore project in the Republic of Congo (RoC).

The award was made by MPD Congo, which is owned jointly by the London-, Hong Kong- and now also Johannnesburg-listed GlencoreXstrata and the Zanaga Iron Ore Company.

DRA reported that previous studies had focused on the viability of a large-scale 30-million-ton-a-year mine.

However, Glencore’s review of these earlier studies identified the potential for developing the Zanaga project in stages, with the first stage involving a smaller 12-million-ton-a-year operation as well as a yearly one-to-two-million-ton direct shipping facility using existing infrastructure.

DRA said Glencore expected the revised approach to potentially more than halve the project's previous initial capital-cost estimates.

DRA’s study into the staged development of the project, which is due to be completed by the end of this month, will form part of the basis of a mining exploitation licence application.

DRA CEO Paul Thomson said the Zanaga project had the potential to become a large-scale producer within RoC’s burgeoning iron-ore province.

DRA, which worked for Assmang on South Africa’s large Khumani iron-ore project, is also engaged at the Mayoko-Moussondi iron-ore project, in the RoC, for South Africa’s JSE-listed and black-controlled Exxaro Resources.

In its report last March on the RoC-Cameroon-Gabon region often being likened to Australia’s iron-ore-rich Pilbara, Mining Weekly Online quoted Investec Securities analysts Hunter Hillcoat and Marc Elliott as punting the increased involvement of Glencore to champion the development of this significant expanse of iron-ore mineralisation, which has potential for meaningful direct shipping ore (DSO) volumes.

The analysts said at the time that the area needed a champion to assemble companies, governments, financiers and end-users in a region that could give the iron-ore top-three of Vale, Rio Tinto and BHP Billiton a run for their money and boost Africa at the same time.

Hillcoat and Elliott wrote of the area offering one of the few opportunities globally for a substantial iron-ore production base outside of big-three control, with the downside of it still being a long way from production.

The key issues include the almost complete lack of infrastructure and the vast amount of capital required to install it; the relatively small sizes of the companies involved and the high sovereign risks, exacerbated by multiple borders, demanding operating conditions, assorted ownerships and generally lower ore quality relative to other product available on the seaborne market.

Consolidation of the assets could provide the critical mass to stimulate a development decision, which could generate 50-million tons a year of DSO production and place a newcomer firmly on the iron-ore producer map.

Although Glencore does not produce any iron-ore directly, it markets iron-ore sourced from various operations globally, which totalled 19.8-million tons in 2012, up from 10.3-million tons in 2011.