PERTH (miningweekly.com) – The advanced feasibility study into the Townsville Energy Chemicals Hub (TECH) base metals project, in Queensland, has confirmed the Stage 1 economics, prompting owner Queensland Pacific Metals (QPM) to start formal debt funding negotiations with potential lenders.
The Stage 1 TECH project is based on a nameplate capacity of 1.05-million-tonne-a-year throughput rate, with a ramp-up time of 2.25 years and a design life of 30 years. The Stage 1 project would produce 15 992 t/y of nickel sulfate, 1 746 t/y of cobalt sulfate, 607 395 t of hematite pellets, 4 000 t/y of aluminium and 28 856 t of magnesium oxide.
The advanced feasibility study estimated that the project would require a capital investment of A$2.1-billion, with the Stage 1 operation to have a post-tax net present value (NPV) of A$1.6-billion and an internal rate of return (IRR) of 15%.
The study estimated that the project would generate average revenue of $1.06-billion, at an operating cost of $515-million, and earnings before interest, taxes, depreciation and amortisation of $546-million.
“We are pleased to present the results of the feasibility studies for the TECH project. The outputs of these studies represent a moment in time and the culmination of hard work from the QPM team, Hatch and our other consultants. However, the work does not stop here as we now continue to work on the project and advance towards a final investment decision in parallel with our funding initiatives,” said MD and CEO Dr Stephen Grocott.
In addition to the feasibility study on the Stage 1 project, QPM has also undertaken a scoping study on the Stage 2 expansion of the TECH project, duplicating the Stage 1 operation.
The scoping study identified a number of synergies for the TECH project, including a A$350-million reduction in capital cost compared with the Stage 1 capital cost, as a result of synergies and no expansion of the high-purity alumina production, a near 7% reduction in operating costs based on economies of scale, increased purchasing power and shared services, and increased plant availability across the entire project.
The combined Stage 1 and Stage 2 operation is expected to produce 32 784 t/y of nickel sulfate, 3 579 t/y of cobalt sulfate, 1.24-million tonnes a year of hematite and 4 000 t/y of aluminium. The combined project would have an estimated post-tax NPV of A$3.3-billion and an IRR of 16.8%, generating revenues of A$2.1-billion.
First production from TECH is currently scheduled for the fourth quarter of 2024, and between now and a final investment decision, QPM will work with its equipment suppliers and engineering service providers to bring forward commissioning and first production.