Aim-listed Ironveld notes that progress has been made by its subsidiaries Ironveld Smelting and Ironveld Mining towards production, with pre-operations power at the Rustenburg smelter now fully installed and systems and equipment testing under way.
As announced in September, Enernet Global has successfully installed a pre-operations power supply at the Rustenburg smelter that is being used to test and recommission the plant.
Further temporary additional power will be added to this facility to enable scaling up of plant operations in the coming months prior to full completion of Enernet’s optimised power solution, which includes solar, battery storage and gas generation, in the third quarter of 2023.
The Rustenburg smelter will not be reliant on the South African electricity grid at any stage of production, thereby removing any risk to operations caused by State-owned utility Eskom’s loadshedding.
Moreover, Ironveld and Enernet have agreed to incorporate certain aspects of the required refurbishment upgrades to the electrical system at the smelter into Enernet’s project installation, thereby enabling Ironveld to make savings in planned short-term capital expenditure.
A planned programme of systems and equipment testing and upgrades is now under way at the smelter and orders have been placed for critical long lead time components.
Where specialist skills have been identified as being needed for the refurbishment work, specialist contractors have been engaged and are active on site. Based on a review of work successfully completed to date, Ironveld Smelting expects first production of its suite of products (high-purity iron, vanadium in slag and titanium in slag) in the first quarter of 2023, in line with its original estimate of a six- to nine-month refurbishment programme.
Since completion of the placing in August, which enabled the company to proceed with the Ferrochrome Furnaces (FCF) acquisition, Ironveld Smelting says it has taken rapid steps to recruit appropriately skilled operational and maintenance staff for the smelter operation.
Around 40% of envisaged total employees have started work or have accepted employment offers. These staff members are currently engaged in the refurbishment work.
On August 31, Ironveld announced that the share purchase agreement (SPA) to acquire 100% of FCF had been signed by its subsidiary company Ironveld Smelting.
The only condition precedent in the SPA is the signing of a debt purchase agreement (DPA) between Ironveld Smelting and the sole creditor of FCF for a total of R115-million.
Ironveld and the sole creditor have agreed all commercial issues in the DPA and it is expected to be signed in the next two weeks.
The sole creditor has also confirmed Ironveld’s exclusivity remains in place until the DPA is signed. Following completion of the DPA, Ironveld and the business rescue practitioner will proceed with the formal steps to remove FCF from business rescue.
The start of mining operations has been scheduled to begin in the current quarter to cost efficiently supply a feedstock of magnetite ore for the smelter as the three furnaces are brought into operation sequentially.
Necessary contractors have been selected and recruitment of key operational staff is substantially complete.
When fully operational the smelter will require about 40 000 t/y of ore - a relatively modest amount that can be effectively mined with a small equipment fleet.
Based on current demand in the South African mining industry, Ironveld Mining is currently investigating options to produce a product from the ‘fines’, which are not suitable for the smelter, for third party purchasers and thereby reduce average mining costs per tonne.