Iron-ore miner Ironveld’s subsidiary, Ironveld Mining, has entered into a joint venture (JV) agreement with mining and industrial supply chain solutions provider Pace as equal partners to produce and sell dense media separation- (DMS-) grade magnetite from Ironveld’s mine in Limpopo, South Africa.
The JV agreement states that Ironveld Mining and Pace will establish a newly incorporated company to be called IPace, in which each party will own a 50% interest.
Pace will fund all necessary capital equipment and establishment costs of a beneficiation plant to produce the DMS-grade magnetite, currently estimated at about R35-million, which will be located on Ironveld’s Lapon mining area.
Ironveld Mining will sell magnetite ore to the JV at cost for processing into DMS-grade magnetite and be responsible for operating the beneficiation plant, while Pace will be responsible for trading the DMS-grade magnetite to end-customers.
The companies have agreed to share all profits arising from the JV (after mining costs, production costs and management fees) on a 50:50 basis, save for an initial period whereby Pace will recoup its capital funding on a 60:40 profit share basis.
The beneficiation plant will have a maximum capacity of about 27 000 t/m of DMS-grade magnetite, based on a design throughput of 60 t/h. The plant equipment includes screens, crushers, a mill and a low-intensity magnetic separator.
Feedstock for the beneficiation plant will be delivered directly from Ironveld Mining’s operations, which are also providing material for the Rustenburg smelter.
Notably, about 30% of the normal run-of-mine material is classed as “fines” which are unsuitable for the smelter but can be processed into DMS-grade magnetite, thereby enabling Ironveld to earn a revenue stream from what was previously a waste product.
All operations will take place under Ironveld Mining’s existing permits and no further regulatory approvals are required.
Pace anticipates selling the DMS-grade magnetite to a number of customers in the market.
Ironveld and Pace expect site preparation, plant procurement and construction will take about four to five months, with first sales of DMS-grade magnetite expected by midyear.
“This is an exciting and value-additive transaction for Ironveld, which will use our existing mining infrastructure to supply extra quantities of ore, at multiples of the expected smelter requirements per month, to the JV from which we expect profitable cashflow within months.
“We would like to thank Pace for funding the initial capital contribution at a time when we are focusing our resources on the Rustenburg smelter ramp-up, and we look forward to working with them,” comments Ironveld CEO Martin Eales.
Edited by: Chanel de Bruyn
Creamer Media Senior Deputy Editor Online
EMAIL THIS ARTICLE SAVE THIS ARTICLE ARTICLE ENQUIRY
To subscribe email firstname.lastname@example.org or click here
To advertise email email@example.com or click here