London Aim-listed Ironveld, which has nailed its colours firmly to South Africa’s mineral beneficiation mast, last week out- lined its plans to build a pilot smelter in Lim-popo province as a precursor to a far larger pig iron plant, which will be fed by magnetite from the northern limb of the Bushveld Complex.

Ironveld expects to mine 2.4-million tons of magnetite a year as feedstock for its eventual million-ton-a-year pig-iron plant, which will also produce vanadium and titanium by-products.

The initial mid-2015 investment will be $60-million, with the eventual larger plant requiring capital expenditure of $938-million.

“Essentially, what Highveld Steel & Vana-dium has been doing for more than 50 years is what we are going to be doing. We are just going to be doing it with a lot more modern equipment and more modern processing technologies have been developed,” Ironveld CEO Dr Peter Cox told the International Mining & Metals inaugural iron-ore benefici-ation conference in Johannesburg last week.

The pilot plant will require 12 MW of capacity, available from a substation in the area, and the full-scale plant will require the construction of four 75 MW direct-current smelters that will receive the raw material from a resource which has 32-million tons of recov- erable iron.

Power for the pilot plant is available imme-diately from an electrical substation 12 km away, into which 20 MW of power was being delivered but not used, and the 300 MW will be provided by Eskom from late 2018.

“We align ourselves with the drive to beneficiate our ore and not just export it,” Cox said, adding that the company had engaged the Treasury in discussion and would have significantly reduced mineral royalty payments as a result.

The company says that the proposed plant, which is close to logistics networks, has both domestic and international offtake potential.

“We have a very healthy foundry industry in this country, which is desperate for good- quality iron, so we have offtake potential there,” Cox said.

The company will start with the 12 MW pilot plant because it matches Eskom’s energy upgrade programme over the next three years, when it will be able to step up production.

The 12 MW pilot plant, which will initially produce pig iron, will eventually be used to produce ferrovanadium.

“We’ll build that first and then, when more power is available from Eskom from late 2018, we will build the big smelters. At that stage, we’ll have staff who are trained and a technology that’s proven and well understood, and, most importantly, we will have generated some cash, which will contribute to the building of those big smelters,” he said.

The pilot plant will have produced about 46 000 t of pig iron by mid-2015, as well as associated vanadium by-products.

“South Africa has world-class vanadium grades. There’s not another deposit in the world that matches the Bushveld when it comes to vanadium,” he added.

The Ironveld project is situated 80 km north of Mokopane and 60 km north-west of Polokwane.

It is made up of a group of seven adjacent farms, with the rights covering a total area of 165 km2.

Exploration is being done by MSA, assaying by Setpoint Laboratories and metallurgical testwork by State minerals research organisa-tion Mintek.

Ironveld has a titanium-magnetite iron-ore resource, and pig iron is used by steelmakers as a scrap supplement.

The main use of vanadium is in alloys, with overwhelming volumes used to toughen steel.

It is usually added in the form of ferro-vanadium in gears, axles and crankshafts.