TORONTO (miningweekly.com) – Oregon Resources Corporation, the US subsidiary of ASX-listed Industrial Minerals Corp, plans to start operations in April from its Coos Bay mineral sands mine and nearby processing facility, ramping up to full production by July, Oregon COO Dan Smith said in an interview.
Oregon will supply chromite and zircon sands for the foundry industry; the sands are used to make molds for the castings into which molten metal – mainly iron – is poured.
The firm will mine mineral sands from an openpit in south-west Oregon, and separate the heavy and non-heavy minerals at a processing site about 18 miles away.
Once things are up and running, the company is forecasting average production of 70 000 t/y of chromite, 15 000 t/y of garnet and between 2 000 and 5 000 t/y of zircon, Smith said.The operation will also produce high-iron ilmenite.
The firm expects to generate revenue of some $43-million from the Coos Bay operation in its financial year ended June 30, 2012.
All of the chromite used in the US is currently imported, largely from South Africa, where mines in the Bushveld Complex produce much of the world's chrome for ferrochrome, a key ingredient in stainless steel. Kazakhstan is also a significant chrome producer.
When the chrome ore is crushed, it also generates crusher fines - smaller, angular particles that are used for molds by the foundry sector.
Oregon's chromite sands will be used in a similar way, but the particles are round, unlike the crushed rock fines, and are also a lot cleaner, Smith said.
“Rounded rock has less pore space, so when they bind the grains together to make the molds they need less binder,” he said.
“And then the inside of the mold is also smoother, so you get a better finish on the casting, which is important to the foundries.”
Oregon has been actively marketing and working to develop customers for its production, and the response from foundries has been positive, Smith said.
“It's all already been washed and crushed by nature, we're just separating the heavy minerals from the non-heavy minerals,” he commented.
The chromite sands can be used as a replacement for higher-priced zircon, which makes it even more attractive as buyers look to cut costs.
Oregon expects to rail a third of its chromite production to buyers in the US, a third will go to Europe, and the balance will be shipped to Australia, China and Japan. The garnet - used for water-jet cutting - and zircon produced at the mine will be sold in the US, Smith said.
Oregon expects to start performance warranty commissioning at Coos Bay operation before the end of April, and will ramp up production to full capacity by July, “if we can't bring it up faster”, Smith told Mining Weekly Online.
The company has faced challenges to its permits from local residents, who sued the Army Corps of Engineers and the National Marine Fisheries Service, alleging that approvals for the project were inappropriately granted.
Applications for injunctions against the project were unsuccessful, however, and all injunctions have now been denied and/or removed.
Oregon is waiting for a district court judge to isse a final summary judgment this summer, Smith said.
The mine itself will be a moving openpit, with the company mining one face and backfilling the other end as it goes.
The firm has received all the permits it needs, including approval to replace the waste sand in the pit without any liners or monitoring, Smith said.
About 70% by weight and 95% by volume of the sands mined will be returned to the pit, which means the topography of the site will only change by about four or five percent, he said. The sand will be recovered with topsoil and trees will be planted on the reclaimed land.
The company has also worked with FLSmidth to develop a process that allows the plant to consume just 40 to 50 gallons a minute of water.
“It's a huge saving, usually a plant of this size would consume anywhere between 600 and 700 gallons a minute of water,” Smith said.
Industrial Minerals raised $35-million in debt and $15-million equity in 2010 to build the project. The financing was split equally between Macquarie Bank and the Sentient Group.
The ASX-listed company also started trading American depositary receipts on the OTCQX International market this month.