Name of the Project
Ferrochrome Furnaces (FCF) smelting complex refurbishment.

Location
Rustenburg, in South Africa’s North West province.

Project Owner/s
Aim-listed iron, vanadium and titanium developer Ironveld plans to raise up to £5-million to acquire the remaining stake in the mothballed FCF business it does not already own, and to refurbish the FCF smelting complex.

Ironveld has agreed with FCF’s business rescue practitioners, Tayfin Forensic and Investigative Auditors, to acquire the share capital of FCF for a nominal fee and to buy outstanding debt from the sole creditor.

Project Description
Ironveld announced in July 2022 plans to refurbish the FCF smelting complex comprising four 2.5 MW tilting electric arc furnaces (EAFs), four convertors with ladles, cranes and associated buildings and equipment. The project will bring three of the four EAFs into production on a phased basis.

It proposes to start processing from the first furnace while the others are being brought back into production, thereby accelerating cash flow from sales.

The plans allow for upgrading the high-purity iron product to a higher-value powder form.

Once three furnaces are fully operational, the complex will be capable of processing about 40 000 t/y of Ironveld’s magnetite ore, which, in turn, will provide finished products of 20 000 t/y of high-purity iron, 190 t of vanadium in slag and 3 800 t/y of titanium in slag. Ore will be stockpiled at the smelter complex while the furnace refurbishment is taking place.

The smelter complex uses electricity from the national grid, but Ironveld has signed a letter of intent with energy solutions provider Enernet Global Inc to build, own, operate and maintain a hybrid power plant using renewable energy.

This should provide Ironveld with security of power supply on a capital expenditure-free basis.

The completion of the installation of the independent power supply by Enernet will be broadly in line with the company’s overall refurbishment timetable.

Based on current demand in the South African mining industry, Ironveld Mining is investigating options to produce a product from the ‘fines’, which are not suitable for the smelter, for third-party buyers and, thereby, reduce average mining costs per tonne.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
The project is estimated at R40-million, including contingencies. Further upgrades to the plant totalling an estimated R25-million are planned in future when funding allows.

Planned Start/End Date
Ironveld has a planned refurbishment programme of up to nine months. Mining of ore can start within six weeks of completion of the acquisition of FCF.

Latest Developments
Ironveld has reported that progress has been made by its subsidiaries Ironveld Smelting and Ironveld Mining towards production, with pre-operations power at the Rustenburg smelter now fully installed, and systems and equipment testing under way.

Further, temporary additional power will be added to this facility to enable plant operations to scale up in the coming months prior to full completion of Enernet’s optimised power solution, which includes solar, battery storage and gas generation, in the third quarter of 2023.

The Rustenburg smelter will not rely on the South African electricity grid at any stage of production, thereby removing any risk to operations caused by State-owned power utility Eskom’s loadshedding.

In addition, Ironveld and Enernet have agreed to incorporate certain aspects of the required refurbishment upgrades to the electrical system at the smelter into Enernet’s project installation, thereby enabling Ironveld to make savings in planned short-term capital expenditure.

A planned programme of systems and equipment testing and upgrades is now under way at the smelter and orders have been placed for critical long lead-time components.

Based on a review of work successfully completed to date, Ironveld Smelting expects first production of its suite of products (high-purity iron, vanadium in slag and titanium in slag) in the first quarter of 2023, in line with its original estimate of a six- to nine-month refurbishment programme.

Since completion of the placing in August, which enabled the company to proceed with the FCF acquisition, Ironveld Smelting has taken rapid steps to recruit appropriately skilled operational and maintenance staff for the smelter operation.

About 40% of envisaged total employees have started work or have accepted employment offers. These staff members are currently engaged in the refurbishment work.

On August 31, Ironveld announced that the share purchase agreement (SPA) to acquire 100% of FCF had been signed by its subsidiary Ironveld Smelting.

The only condition precedent in the agreement is the signing of a debt purchase agreement between Ironveld Smelting and the sole creditor of FCF for a total of R115-million.

Ironveld and the sole creditor have agreed on all commercial issues in the debt purchase agreement and it is expected to be signed in the next two weeks.

The sole creditor has also confirmed that Ironveld’s exclusivity remains in place until the agreement is signed. Following completion of the DPA, Ironveld and the business rescue practitioner will proceed with the formal steps to remove FCF from business rescue.

The start of mining operations has been scheduled to begin in the current quarter to cost efficiently supply a feedstock of magnetite ore for the smelter as the three furnaces are brought into operation sequentially.

Necessary contractors have been selected and the recruitment of key operational staff is substantially complete.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Ironveld, tel +44 20 7138 3204 or email contact@ironveld.com.