Aim-listed Zanaga Iron Ore Company (ZIOC) had made considerable progress at its Zanaga iron project, in Congo-Brazzaville in 2018.
Reporting on the company’s results for the year ended December 31, 2018, on Thursday, ZIOC stated that the environment for tier one iron-ore projects had also improved considerably.
“The combination of a rise in benchmark iron-ore prices, as well as a simultaneous expansion in premiums for high-quality iron-ore products, driven by China’s push to reduce environmental pollution, has led to more favourable conditions for the Zanaga project,” ZIOC nonexecutive chairperson Clifford Elphick commented in a statement on Thursday.
He pointed out that the project team had been actively preparing the project for this resurgence in iron-ore prices, while its focus on the need to position Zanaga’s iron-ore product at the higher end of the global iron-ore market was yielding results.
“The focus of Zanaga’s early production project remains to produce iron-ore in a shorter period of time, at low capital cost, using existing brownfield logistics solutions.
We look forward to providing further updates to shareholders as results are received from the current study work programmes and conclusion of joint venture partner Jumelles' evaluation process on the early production project (EPP).”
The EPP is aimed at producing one-million tonnes a year of high grade iron-ore pellet feed concentrate. The project has a two-year construction timeframe.
The evaluation process is progressing well and is expected to be finalised during the second half of this year.
Substantial plant technical work has also been completed.
The preferred mining contractor has been selected and contract discussions are under way.
The brownfield logistics solution is entering the final stages of definition and the potential production of direct shipping ore (DSO) is under investigation.
On completion of the assessment and evaluation work, the outcomes will be presented to the board of Jumelles for consideration.
Meanwhile, in terms of the 30-million-tonne-a-year staged development project at Zanaga, there have been positive indicative results from an internal review of the economics of the development project as outlined in the 2014 feasibility study.
The model was reviewed internally to illustrate the potential impact of a 65% iron concentrate index pricing formula.
Value engineering opportunities have been identified, with potential to provide significant capital and operating cost reductions, including the potential to incorporate a low-cost milling solution that was tested in the second half of 2018.
The project team is engaging with third-party contractors and consultants to evaluate options to investigate savings achievable on the 30-million-tonne-a-year staged development project to a higher degree of confidence.
In terms of port access, a nonbinding letter of intent (LOI) has been submitted to China Road and Bridge Corporation (CRBC) by Mining Project Development Congo and other mining companies to support CRBC’s current discussions with Chinese funding institutions for the development of a new bulk mineral port at Pointe-Indienne.
Meanwhile, cold pelletisation technology tests have successfully achieved production of a pellet of sufficient quality to meet industry standards as determined by third-party laboratories. A process is under way to ascertain commercial acceptability with steel mills.
A work programme and budget for this year and a funding agreement have been agreed with Glencore Projects, a subsidiary of Glencore.