Latest issue of International Mining Project News available (June 5): Gold is nearing the $1,000/oz mark. Copper is above $5,000/t. Oil is almost reaching $70/bbl. Does this show we are in the midst of a recovery or is this a temporary illusion? Whether or not prices deflate back to previous, unprofitable, rates investors and project managers are both starting to look at the market with optimism. This is reflected in a 30+ page report of Project News that sees no mention of projects on hold or project cutbacks.
There is some big news in iron ore, with Shougang Hierro Peru planning to complete its expansion program by end 2010 at a cost of $1,000 million, which will more than double its current annual production of iron ore from 8 Mt to 18 Mt. Also in iron ore, Moly Mines has the maiden JORC-compliant resource estimate for the Spinifex Ridge iron ore project, located 170 km east of Port Hedland in Western Australia. The company has now commenced mining and processing feasibility studies based on a minimum five-year direct shipping ore operation with an annual production rate of at least 1 Mt of direct shipping hematite ore Resources for the project are 6.11 Mt at 58.9% Fe, 8.5% SiO2 and 1.7% AL2O3 Indicated, and 1.16 Mt at 57.2% Fe, 12.8% SiO2 and 0.9% AL2O3 Inferred. Preliminary mining and process modelling have demonstrated a low cost capital start-up of about A$12-$15 million for the project, based on simple conventional open pit mining followed by crushing and screening to produce lump and fines.
Still in Western Australia, BC iron has reached an agreement with Fortescue Metals Group (FMG) for the provision of rail haulage and port services for its Nullagine iron ore project. The agreement provides for an initial production target of 3 Mt/y escalating to 5 Mt/y when port and rail facilities are expanded. The project currently hosts a DSO resource of 50.7 Mt at 57% Fe (64.8% CaFe) within an overall channel iron deposit of 89.1 Mt at 54.1% Fe. Importantly, the resource occurs at surface, resulting in low stripping ratios, and is very low in contaminants. FMG can earn a 50% interest by meeting its joint venture obligations. The agreement ensures that, subject to completion of the feasibility study and securing all relevant statutory approvals, BC Iron could commence production at Nullagine in early 2010.
Moving to a rarer project in Egypt, Gippsland has completed a definitive feasibility study on its Abu Dabbab tantalum/tin/feldspar project based upon a mill feed rate of 2 Mt/y producing in excess of 650,000 Ib of tantalum pentoxide (Ta2O5) and around 1,530 t/y of tin metal. Within around two years of start-up, the project is also scheduled to produce in the order of 1.5 Mt/y of ceramic grade feldspar which in turn will result in a tailings stream of less than 0.5 Mt/y greatly minimising the environmental impact of the project. The project is designed to produce a high-grade SynCon having a Ta2O5 content in excess of 50%. The company sees that with a resource base in excess of 140 Mt, there is a high probability of expanded production.
There is also news from the coal sector, with Homeland Energy Group issuing an update on its Kendal Colliery in South Africa. Plans for Kendal include a further production expansion in 2010 to increase the monthly run of mine from some 120,000 t to about 180,000 t/month. In Indonesia Churchill Mining has raised £5 million through the placing of ten million new ordinary shares with the proceeds helping to advance its East Kutai coal project. There is also news of gold, lithium, potash and bauxite amongst the 60+ reports.
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