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Heavy minerals miner prioritises energy efficiency, invests in dry mining

14th March 2014

  

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Sierra Leone-based heavy minerals miner Sierra Rutile in December entered into an agreement with power provider Smol Pawa Sierra Leone, a wholly owned subsidiary of Canada-based Smol Pawa Energy, which stipulates that the miner will be the cornerstone purchaser of energy for its Moyamba hydro project.

The 11 MW to 14 MW run-of-river hydropower project is located at the Singimi Falls on the Gbangba river, within 20 km of Sierra Rutile’s existing operations in Sierra Leone’s Southern province.

Sierra Rutile – a primary producer of rutile and ilmenite with one of the largest natural rutile deposits in the world – says the Moyamba hydro project is being developed as a public–private partnership with the government of Sierra Leone and will serve communities in and around Moyamba – the capital of and largest city in the Moyamba district, which is host to Njala University and Sierra Rutile’s operations.

The mining company is currently completing a feasibility study for the project. Construction of the power facility is expected to be completed within 36 to 48 months.

Sierra Rutile CEO John Sisay stated at the signing of the memorandum of understanding that the company was pleased that it would be able to support its government in the provision of long-term sustainable electricity to local communities.

“We continue to focus on reducing costs, and the opportunity to purchase reliable, low-cost power will significantly reduce Sierra Rutile’s cost exposure to potential oil price fluctuations. The power supplied from the hydropower facility will also reduce Sierra Rutile’s operating risk by diversifying our power sources,” he said.

Expansion Activities
Meanwhile, Sierra Rutile also signed a $30- million senior loan facility in December with international financial service provider Nedbank. The facility has a tenor period of four years with an interest rate of Libor plus 5.25% and will be used to support projects that will help expand the mine.

Sisay says the funds will be used to support the development of the Gangama Dry Mining project, an expansion of the Sierra Rutile mine project that mines on dry surfaces.

He adds that the loan is secured against the mine’s assets on condition that the company reaches its financial close by December 31, with an additional 18 months to draw down the funds.

The Gangama project involves the excavation of ore in a dry environment. Excavation will be conducted using a fleet of conventional earthmoving equipment, which will deliver mineralised ore to a concentrator unit at the mine site.

The mineral concentrate will then be processed by Sierra Rutile’s existing mineral separation plant, along with feed from the Lanti Dredge Mine and the Lanti Dry Mining project.

Dry mining the Gangama deposit will provide access to high-grade resources in a shorter development time and with less capital costs than a dredge mining operation.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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