Ausenco has been awarded a Front End Engineering and Design (FEED) contract for the Phase 2 expansion of Tonkolili Iron Ore’s iron ore project in Sierra Leone. The Phase 2 expansion involves the development of a process plant and related infrastructure, targeting additional production of up to 10 Mt/y of concentrate. The Innovate phase work will commence immediately and is anticipated to be completed by mid-2014. Tonkolili Iron Ore is a subsidiary of African Minerals Ltd (AML). The scope of the works will also include the raw water and tailings dam design and the power supply requirement.
The establishment of the flowsheet will allow the optimisation of mass yield and concentrate grade – key components in establishing capital schedules, operating costs, resource life, and also the expected revenue per tonne from this portion of Tonkolili’s production. It is expected that these parameters, and those of the ancillary services including power, will be established in Q2 2014 such that the long lead time elements of equipment can be ordered in good time.
It is expected that earthworks for the construction of the concentrator will begin at the end of this year, once the 2014 wet season has ended, such that the concentrator will be in production in 2016. Initial expenditure for the construction of the concentrator and associated facilities will be funded from existing restricted funds of some $300 million, with the balance sourced through project level debt finance.
Bernie Pryor, CEO of African Minerals, said: “I am pleased to announce the appointment of Ausenco, who already has a long history and familiarity with our project. Together with the incremental infrastructure growth that we plan to achieve, the freezing of the optimum flowsheet will allow us to confidently embark on this next exciting phase of the development of the Tonkolili deposit, with a higher value product.”
Ausenco CEO Zimi Meka said “Tonkolili is amongst the most advanced new iron ore projects of significant scale in recent years and is operating on one of the largest iron ore deposits in the world, with associated 200 km rail and port infrastructure.
“This contract award further increases Ausenco’s work on hand in the APAC/Africa region, builds upon our experience in West Africa and expands our global experience in the iron ore sector” Meka said. “We are very pleased to be continuing our relationship with African Minerals and our long involvement in the Tonkolili project as it enters this important next phase of development.”
Ausenco previously operated and maintained Phase 1 of the project from 2011 to 2012, as well as carrying out engineering and procurement for Phase 1b plants. The expansion will take annual production above current production target of 20 Mt/y of iron ore so as to include the production of a high grade concentrate from 2016. Tonkolili has a JORC compliant resource of 12,800 Mt.
The project, which currently has a 60+ year mine-life, is being developed in a number of staged expansions. The current operations are expected to produce 20 Mt/y at full capacity, with this run-rate of production having first been achieved in June 2013. The next stage of Project expansion, Phase II, now intends production to increase further and include the production of a high grade concentrate with the first concentrator plant expected to enter production in 2016.
The company has also developed significant port and rail infrastructure to support the operation of the project, via its subsidiary African Rail and Port Services (SL) Ltd (ARPS), in which the Government of Sierra Leone (GoSL) has a 10% free carried interest.
The project companies are currently owned 75% by AML, and 25% by Shandong Iron and Steel Group (SISG), except for ARPS, which is currently owned 75% by AML and 25% by SISG, with the GoSL having the right to a 10% free carried interest from AML.