Rio Tinto to spend $2 billion in Orissa iron ore mining project

Tue, Mar 06, 2012

New Delhi : Australian mining major Rio Tinto is planning to invest around $2 billion (Rs 9,886 crore) in setting up a major iron ore mining project in Orissa. The investment, largest so far by the miner in India, would help it establish a strong foothold in the country’s mining space.

“It is a $2-billion project. We expect ramping up the project’s capacity quickly to 15 million tonnes per annum (mtpa) to cater to clients ,” Sam Walsh, chief executive of Rio Tinto’s iron ore division said during a press conference. Walsh is part of a group of chief representatives of Australian and Indian companies. The chief executive officers’ (CEOs) forum, that held its meeting today, has been formed to build bilateral economic partnerships across sectors. Total foreign direct investment (FDI) from Australia between April 2000 and December 2011 stood at $486.5 million (Rs 2,402 crore), a mere 0.3 per cent of the country's total FDI flows, according to the commerce ministry's data.

While Walsh did not share details of the project, he said the company has applied for mining approvals with the state government. Rio Tinto has 51 per cent stake in a joint venture (JV) it holds with the state government-owned Orissa Mining Corporation (OMC) to develop iron ore deposits in Keonjhar district. OMC has a 44 per cent stake in the JV while the rest is held by India’s state-owned miner NMDC Ltd.

According to the initial plan, the JV called Rio Tinto Orissa Mining Company, set up in 1995, had plans to build supporting infrastructure of rail links and port capacity. Walsh said the project would be commissioned as soon as the “government approvals” are received.

The CEO forum also indicted on plans to raise the concerns of Australian companies over the proposals of the new Indian mining legislation being worked out by the government. A Bill to revive the mining sector, that proposes mandatory sharing of royalty with locals, is currently pending in the Indian Parliament.

“The issues of infrastructure bottlenecks in mineral trade with Australia will also be put up before the government,” said Naveen Jindal, a Congress Member of Parliament and Chairman of Jindal Steel and Power Ltd during the press briefing of the CEO Forum organised by industry chamber Ficci. Jindal is the Indian co-chair of the forum. Taking up the issue of facilitating temporary entry of skilled labour and professionals into Australia is also on the agenda.

(sourced BS)

Beneficiation of Low grade iron ore fines

Since a decade the Institute of Minerals and Materials Technology has been engaged in Iron ore research to enhance raw material quality for Iron and Steel industry. Consequently, from our experience we discuss the characterization and beneficiation aspects of five different types of Iron ore samples—Barbil, Bailladilla, Goa, Barajamda and Hospet (Banded Hematite Quartzite, BHQ). The characterization studies in general indicate that hematite and goethite are the major Iron bearing minerals, where as kaolinite, gibbsite and quartz are present as the gangue minerals. Particle counts of the close sized fractions indicate that the degree of liberation of hematite is about 87% at 53 micron size.

The chemical analysis of the hematite ores on an average conform to 57.8 to 64.5% Fe, 1.56 to 6.5% SiO and 1.3 to 6% Al3O2. These ores subject to beneficiation yield a concentrate containing 61.5 to 66% Fe at 62 to 86% yield. In case of BHQ ore, column flotation technique has been adopted to obtain a concentrate of 66% Fe at 44.7% yield. It has been observed that beneficiation of low grade ores invariably pose specific challenge due to the presence of clayey/earthy materials rich in aluminum. For both hematite as well as BHQ ores proven flow-sheet with material balance has been developed and satisfactorily implemented through our clients. The processes that have been developed are ideal for pellet making where the future of Steel industry rests.

1. Introduction

India occupies sixth position in the world's Iron-ore reserves and is one of the major Iron-ore producer and exporter due to availability of quality ore and skilled mining personnel. India's Iron ore reserve is around 25,249 million tonnes (MT) apart from Banded Hematite-Quartzite (BHQ) and Banded Hematite Jasper (BHJ). Although India is blessed with large reserves of Iron ore containing average grade around 58% Fe, the performance of blast furnaces has been at lower levels in comparison with the developing countries.

This has been mainly due to the presence of high levels of impurities such as silica and Alumina in the raw material contradicting to the blast furnace chemistry. In order to increase the efficiency of blast furnace, some of the issues relating to Iron ores include chemical composition of Iron ore with low Fe content and high Al:Si ratio, low strength, high temperature break down, lower reducibility, low temperature softening and melting behavior of the Iron ores, etc. Normally Iron ores with Fe content above 65% are desirable to achieve better productivity either in blast furnace or direct reduction.

The other impurities level such as Na, K, S and P should be as low as possible. Alumina and Silica content should be within permissible limit for better fluidity of slag. Due to non availability of quality Iron ore, the run-off-mne (rom) needed to be beneficiated to lower the impurities to improve the strength of sinter and pellet quality. The physical, chemical and metallurgical properties of lumps, sinters and pellets are important as they have a significant impact on furnace performance.

For economics reasons, quality raw material is not only required for blast furnace operation but also for the emerging technologies such as smelting reduction and direct reduction route. Beside that, India has set itself a target of achieving production capacity of 110 MT of Steel by 2020 and the required quantity of Iron ore is projected at 190 MT. Over the next few years, demand for Indian Iron ore is expected to rise by more than 200 million tonnes per year to meet the internal demand and export. Two major shifts in Iron ore supply for the Indian Iron and Steel industry have occurred. First the export to foreign market owing to liberalization in the economy and second the adaptation of beneficiation and pelletization practices to utilize low-grade ores and fines.

In India for economic and industrial growth, a number of Steel plants have been planed in the states of Orissa, Jharkhand, Chhattisgarh, Karnataka and Maharastra. As the quality of raw materials declines, the impact of Iron making processes on pollution control and energy required will worsen in days to come. Most of the rom Iron ore contains lot of impurities that needs beneficiation prior to use. Therefore research on utilization of low grade Iron ore to produce quality raw material would play a key role in future which is a fact acknowledged by the Iron and Steel industry. Iron ore is being beneficiated all round the world to meet the quality requirement of Iron and Steel industries. However, each source of Iron ore has its own peculiar mineralogical characteristics and requires the specific beneficiation and metallurgical treatment to get the best product out of it.

The choice of the beneficiation treatment depends on the nature of the gangue present and its association with the ore structure. Several techniques such as washing, jigging, magnetic separation, advanced gravity separation and flotation are being employed to enhance the quality of the Iron ore. Washing, jigging and classification are being carried out for the beneficiation of Iron ores in India. During washing and sizing of the ore, slimes with less than 0.21 mm size are generated and discarded into the tailing pond. It is estimated that around 10 million tonnes of slimes are being generated in every year during the processing of hematite ore and lost as tailings containing around 48-62% of Fe. However beneficiation and utilization of these slimes still remains as a challenging task.

The ever increasing need to utilize the slimes is being reflected in the shift in Steel production from basic blast furnaces to electric arc furnace technology. In the USA, around 40% of Steel is produced in electric arc furnaces by using Iron ore pellets. Pellets are also used in traditional blast furnaces in some parts of the world. Pellets are ideal material as a feed to direct-reduction Iron plants. However the use of pellet in our Steel plant is very limited. Lot of low grade Iron ore fines are generated during preparation of lumps, calibrated ores and sinter-fines. In addition to these fines, 10-15% of ore mined is generated as slimes and are discarded as tailings.

These fines and tailings are potential sources to produce pellet grade concentrate after suitable beneficiation. Another source of pellet feed concentrate is from low and off grade ores such BHQ & BHJ. All these materials can be beneficiated to yield quality pellet feed. Keeping this in observation, detailed studies have been carried out on different source of materials to produce quality concentrates for pellet feed. The results of four different types of hematite ore fines covering from Barbil , Balladilla, Goa, Barjamada have been discussed in this paper. Increasing worldwide demand for Iron ore triggering the development of India's magnetite and BHQ ores of Karnataka for effective utilization is also highlighted.

2. MATERIALS AND METHODS
2.1 Ore samples

Five different types of representative Iron ore samples from Iron ore mines of India through Barbil, Balladilla, Goa, Barjamada and Hospet area were collected and brought to the laboratory for the detail investigation studies. The as received hematite samples which are either fines or slimes were thoroughly mixed and representative sample of each was drawn by conning and quartering method for different characterization, mineralogical and beneficiation studies. The BHQ sample was lumpy variety with little amount of fines. The sample is very hard in nature and compact. The sample colour is grayish black. Similar coning and quartering method was applied to draw a representative sample from the bulk sample for different investigations.

2.2 Experimental
2.2.1 Physical and Chemical Characterization Studies:

The size analysis of the received Iron ore sample, were carried out by wet sieving techniques to know the average particle size of the sample. The different size fractions thus obtained were subjected to chemical analysis to ascertain the different quantitative elemental composition of the sample. The complete chemical analysis of the rom ore and different size fractions were carried out by X-ray florescence technique and wet chemical analysis. The XRF analyses were carried out against the standard calibrated samples of similar values. The loss on ignition (LOI) of Iron ore samples was determined by igniting around 2.0 gm of sample at about 1000 C for four hours in a muffle furnace in silica crucible.

Closed sized classified samples were examined under stereomicroscope by preparing the corresponding grain slides for identification of different minerals. The X-ray diffraction studies of selected samples were also carried out using a Philips model diffractmeter with CuK radiation. The bulk sample was crushed to below 1 mm size and wet sieved into different size fractions. The size fractions were mounted in resin with hardner and polished following standard procedures. The polished sections were studied under reflected light microscope and the particles of different typologies were counted.

2.2.3 Grinding Studies

In order to increase the grade of Iron ore and for the subsequent liberation of Iron values from the locked particles, the samples were subjected to wet grinding to generate different size particles. A standard ball mill of 12”x12” with required weight of balls as per Bonds formula at 45% filling was used. The grinding was carried out in batch prior to different beneficiation studies. The objective is to achieve the maximum liberation of the Iron particles from the associated gangues due to reduction in size. The large-scale continuous grinding studies were also carried out using 24?x 24? ball mill to produce samples for further investigations and to establish grinding parameters. All the grinding studies were carried out at 40% solids consistency in the ball mill.

2.2.4 Beneficiation Studies

Beneficiation studies using various techniques such as hydrocyclone, spiral, magnetic separation, flotation etc. were carried out to develop a suitable process flowsheet as a step towards the up-gradation of Iron values and to reduce the gangue content. The required separation technique was selected based on particle size and the properties for effective separation. Initially, the hematite ore fines were ground to required size and then subjected to separation. The sample was ground to below 1.0 mm size for hematite ore fines and less than 100 microns for BHQ ore. However, the tailing samples from Goa ore have been treated without further grinding.

2.2.4.1 Hydrocyclone

Hydrocyclone was used as a step towards the up-gradation of Iron values as well as for de-sliming of slime parti­cles present in the sample. Since the ground samples contained large amount of slime materials comprising of particles down to sub micron size, de-sliming was also thought of prior to flotation. The effect of some of the variables namely apex diameter, vortex finder diameter, operating pressure, solids concentration etc. were optimized. The throughput of hydro-cyclone during the experiments was 240 to 780 kg/hr solids and the solid concentrations of ~10-20 % by weight were main­tained during the course of the experiments. The underflow and overflow materials were collected at a steady state for a fixed time, dried, weighed and analyzed for the desired Iron and other constituents. The overflow & underflow samples collected at optimum operating conditions were used for further studies

2.2.4.2 Spiral

The spiral concentrator of 100 mm dia. was used to enrich the Iron content of the classified sample (hydrocyclone underflow). The spiral is an energy saving gravity equipment where large quantities of sample can be fed for pre-concentrations. In the spiral study, the Iron ore sample was fed to the centrifugal pump at the required solids consistency and the slurry was kept re-circulating for a predetermined time. The entire concentrate and tailings were collected after attaining the steady state. The concentrates in some cases were cleaned to improve the grade of products. All the products thus obtained were dried, weighed, and analyzed.

2.2.4.3 Wet High Intensity Magnetic Separation

The wet high intensity magnetic separator (WHIMS) and high gradient magnetic separator (HGMS) were used at different magnetic field intensities to recover the fine Iron values from the hydrocyclone over flow or spiral tailings. Both the separators have provision for different magnetic groves of width and matrix with variable currents to provide different magnetic intensities. A desired concentration of solids was passed through the magnetic separator. In some cases the magnetic products were cleaned in second stage to enhance the quality of the product from first stage separation.

2.2.4.4 Flotation

Batch flotation studies were carried out to select either direct or reverse flotation technique to optimize reagent combination and to establish the number of stages of operations. Denver D-12 sub-aeration flotation machine was used for the batch flotation studies. Both cationic (dodecylamine) and anionic (oleic acid) reagents were used as collectors while MIBC was used as the frother. The flotation conditions were optimized to get good grade concentrate with high recoveries. The column flotation studies were carried out by using 100 mm diameter glass column designed and fabricated at our laboratory. The column was operated at nominal capacity of 20 kg of Iron ore fines per hour with the help of a peristaltic pump. Both the concentrate and tailings were collected separately after attaining the steady state and analyzed for Iron content.

(From steel world)

Investment in low grade iron ore ore mines i.e laterite mines in India. Contact us

Tag: low grade iron ore, mines for sale, investment in iron ore mines
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Beneficiation of Low grade iron ores

Process	Beneficiation of Low grade iron ores
Area	Mineral Processing
Uses	The technology developed is for beneficiating low grade iron ores. The calibrated lumps, fines & concentrate so produced are used for iron & steel making.
Salient Features	The process so developed basically involves crushing, classification, processing of lumps, fines and slimes separately to produce concentrate suitable as lump and sinter fines and for pellet making. The quality is essentially defined as Fe contents, Level of SiO2 and Al2O3 contamination. The process aims at maximizing Fe recovery by subjecting the rejects/tailings generated from coarser size processing to fine size reduction and subsequent processing to recover iron values.
Scale of Development	Pilot Scale
Major Raw Materials	Low grade iron ores, Flotation reagents
Major Plant Equipment/Machinery	Crushing, screening, scrubbing, classification, gravity separation, magnetic separation, froth flotation, Dewatering, Conveying Systems.
Details of specific application	The process is applicable to low grade iron ore, however, the process is to be tailored to suit specific ore application
Status of Development	Pilot scale
Ecological/Environmental Impact (if any, specify briefly)	The process is environment friendly. No toxic/hazardous waste is discharged. Arrangement for tailings disposal is needed.
Patenting details	Nil
Commercialisation Status	The technology is sample specific being commercialized for ore from Bolani and Gua Mines of SAIL.
Techno-Economics	Available on demand
Key words	Low grade Iron ore, Gravity and Magnetic Separation, Iron ore beneficiation.

NMDC drops acquisition plan for Tacoa coal mine in US

Sunday, 08 Jan 2012

The Indian Express reported that NMDC has dropped the takeover bid for Tacoa coal mine in the US owing to the high accident rates and adverse geological conditions there.

This development comes soon after the company dropped its bid for the Vince coal project in Russia and the Greystone iron ore mine in Brazil.

The NMDC board, after extensive deliberations on December 2, shot down the proposal to acquire the Tacoa mine for USD 90.74 million. The directors observed that legal consultants hired for due diligence have advised against the acquisition bid as the mine has definite legal issues.

In addition, the reserves do not meet the guidelines of the concerned US agencies and have not been estimated through scientific mining methodologies. The board also expressed the apprehension that NMDC is a known iron ore mining firm and has no expertise in mining coal.

The Board observed that “As per the diligence reports, several companies have previously mined coal from Tacoa’s leased property and the adjacent one. However, it was observed that each company experienced financial loss as a result of encountering adverse geological conditions, as Tacoa has, and ceased their operations.”

In view of the adverse mining conditions and high accident rates, the board expressed its objections to the takeover bid.

(sourced Indianexpress.com)

AFISCO to invest INR 375 crore for exploration at Hajigak in Afghanistan

Saturday, 07 Jan 2012

ET reported that a consortium of Indian steel companies led by Steel Authority of India Limited will invest about INR 375 crore in initial exploration for iron ore at Hajigak in Afghanistan.

The exploration will give the Indian consortium, called Afghanistan Iron & Steel Consortium, an indication of the size and grade of reserves, which were last explored in the 60s.

The outlay, which will cover exploration over two years, will be a prelude to an investment of INR 55,000 crore to develop mines, build a steel plant and create infrastructure.

A working level team from AFISCO will visit Afghanistan shortly for talks with the government on the final agreement. The Indian team will also seek the Afghan government's active role in providing road and rail infrastructure outside the mining area, in securing licensing rights and housing for project workers.

Mr CS Verma chairman of SAIL said “We will seek the Afghan government's role in providing safety and security cover to Indian personnel. Since Afghanistan is on a negative list, the security factor will weigh critically before we make any investments. It will also help when the consortium seeks funding from multilateral financial institutions.”

Mr Verma said “While road and rail links within the project area will be our responsibility, we would want the Afghan government to provide infrastructure support outside the project area up to the nearest international port.”

The consortium, which has JSW Steel, JSW Ispat, JSPL, RINL, NMDC and Monnet Ispat as the other members, will hold a separate meeting to work out the issues.

(Sourced from ET)

Legacy Iron Ore to acquire 60% of Hawthorn Resources

Tuesday, December 27, 2011 sourced: Proactive Investors

Legacy Iron Ore (ASX:LCY) will acquire a 60 per cent stake in Hawthorn Resources (ASX:HAW) and so enable the Mt Bevan iron ore joint venture in Western Australia to be developed under one entity.

Investors may recall that India's NMDC, the largest iron ore producer and a Government of India owned enterprise, committed to developing Mt Bevan through Legacy. NMDC has cash reserves of A$4 billion.

Legacy and Hawthorn signed a term sheet for the deal which is expected to be finalised following an upgrade to the current inferred resource at Mt Bevan, which is likely to be announced in mid-January 2012.

Key deal points are:

- Legacy agreeing to subscribe for a placement of $5,000,000 at an issue price of $0.015 in Hawthorn, being a premium over the last ASX trade of $0.009, upon completion of the transaction.
- Hawthorn agreeing to acquire the interest currently being earned in the Mt Bevan project by Legacy, and agreeing to terminate the Joint Venture agreement, in return for scrip consideration in Hawthorn.
- Upon completion, 100% of Mt Bevan will remain in Hawthorn for development and commercialisation
- Legacy will have the right to appoint a majority of directors to the Hawthorn board

The deal is subject to the completion of satisfactory due diligence by Legacy, and obtaining the necessary regulatory and shareholder approvals.

The $5m placement into Hawthorn will be funded by Legacy, out of current cash reserves. Legacy shareholders recently approved an $18.9m placement to NMDC for 50 per cent of Legacy. Three NMDC directors have joined the Legacy board including NMDC chairman Rana Som.

Australia’s Foreign Investment Review Board (FIRB) as well as the Legacy shareholders have given their approval to the NMDC-Legacy deal.

Analysis

Clearly, this is a significant step forward for Legacy and allowing an accelerated development of Mt Bevan, as this deal paves the way for effective control of Mt Bevan to reside with Legacy. It would also have likely been a key point for NMDC to open its wallet further with project financing and access to debt funding of Mt Bevan.

In a plus for Legacy shareholders, subject to successful completion, Legacy is likely to look to an in-specie distribution of the 60% shareholding in Hawthorn back to Legacy shareholders.

Legacy and NMDC are on record as seeking to secure additional resource projects using Legacy as its investment vehicle. Sources in India told Proactive Investors that high on NMDC's list is to acquire a stake of up to 50 per cent stake in phosphate company Minemakers (ASX: MAK) and its Wonarah phosphate project. This could occur as soon as the Legacy deal is wrapped up. However, it is understood that due diligence has not yet been completed on the Wonarah project.

NMDC has put aside up to $400 million for overseas investments like Legacy and Minemakers.

NMDC not to buy stake in Greystone iron ore mine in Brazil

Fri, December16, 2011

The Indian Express reported that India’s state run mineral giant National Mineral Development Corp is all set to drop its proposal to pick up 50% equity of Greystone Iron ore Limited’s mine in Brazil, as the firm’s holding company Zamin Resources is listed in the British Virgin Islands, a known tax haven.NMDC was planning to pick 50% equity in Greystone for USD 40 million to take the project to Bankable Feasibility Study stage and initiate exploration, drilling and allied activities after the equity transfer.

As per report, NMDC is exercising caution, given that the government is under pressure to unearth black money stashed in tax havens by both individuals and companies.The move comes barely a month after the company shelved a proposal to acquire the Vinci coal project in Russia as one its owners were listed in North Korea.
(sourced:Indianexpress.com)

India SAIL-led consortium sees $11 bln investment in Afghanistan

Wed Nov 30, 2011

* Consortium plans to build 6 mln T steel plant in Afghanistan
* Was awarded rights to develop three blocks of huge Hajigak mines
* Steel plant to cost $7 bln-$7.5 bln-SAIL chair (Adds details)

NEW DELHI, Nov 30 (Reuters) - A consortium of Indian companies led by Steel Authority of India will need a total investment of $11 billion in a planned steel plant and to develop iron ore mines in Afghanistan, the steelmaker's chairman said on Wednesday.

The Afghan government awarded the rights to develop three blocks of the huge Hajigak iron ore concession in central Afghanistan to the consortium, while a fourth block at the deposit was won by Canada's Kilo Goldmines Ltd.

The Indian consortium plans to build a steel plant in Afghanistan with an annual capacity of 6 million tonnes, SAIL Chairman C.S. Verma told reporters in New Delhi, adding the plant would need investment of $7 billion to $7.5 billion and the remainder would be for developing the mines.

State-run SAIL is the biggest steelmaker in India, with an annual capacity of about 15 million tonnes.

The other members of the consortium are: state-run miner NMDC Ltd and steelmaker Rashtriya Ispat Nigam Ltd (RINL), and private sector steelmakers JSW Steel Ltd, JSW Ispat Steel Ltd, Jindal Steel & Power Ltd and Monnet Ispat & Energy Ltd.

"We'll need to borrow some from financial institutions. We'll need some facilities and assistance from both the Indian and Afghan governments," Verma said.

The Hajigak deposit contains an estimated 1.8 billion tonnes of ore, with an iron concentration of 64 percent, the Afghan mines ministry has said. The figures are based on a survey carried out in the 1960s.

The huge investment necessary to develop Hajigak will be welcomed by the cash-strapped Afghan government, but the deal could cause problems with neighbouring Pakistan, which fears closer cooperation between India and Afghanistan.

The United Nations said this year violence across Afghanistan is at its worst since the Taliban regime was toppled 10 years ago, although the NATO-led alliance of foreign troops says attacks on its forces by insurgents are now falling.

(sourced Reuters)

Canada’s Salmon River Resources signs iron ore partnership with Chinese holding company

Sunday, 06 November 2011

Vancouver, British Columbia-based Salmon River Resources announced Friday that it has signed a non-binding Memorandum of Understanding (MOU) with Beijing, China-based General Steel Holdings Inc. regarding rights to purchase part of any future iron ore production from properties currently under option to and/or to be acquired by Salmon River, and to provide assistance to Salmon River in raising up to C$110 million (US$108 million) in private placement financings as well as committing to fund future capital expenditures and other development costs.

The MOU is intended to lay the groundwork for Salmon River to fund the exercise of its exclusive option to acquire 100 percent of Treppo Grande Iron Pty Ltd. and to fund future development costs of the Treppo Grande iron ore project. Under the MOU terms, the GS Group has also committed to fund future capital requirements as well as provide project management and coordination services to the Company in return for compensation equal to up to a 51 percent profit interest in the Treppo Grande project, on terms to be mutually agreed in the final definitive agreements.

In return for providing financing and management assistance, the GS Group will be granted a right to acquire up to 2 million metric tons per annum of hematite ore production from the properties acquired by Salmon River under the Treppo Grande Option or other properties acquired by Salmon River in the future, at 95 percent of prevailing market prices once production has commenced.

Tags: iron ore , Canada , China , raw mat , East Asia and Pacific , Far East , North America , mining , M&A

Bobab JORC resource in Tete region of Mozambique rises by 100 million tonnes

Wednesday, 02 Nov 2011

Baobab Resources has added more than 100 million tonnes to the JORC compliant resource at its iron ore project in the Tete region of Mozambique. It rises to 267 million tonnes from 160 million tonnes following the completion of resource estimates on the Ruoni North and Chitongue Grande.

This is phenomenal progress for a company which started 2011 with a JORC resource of 48 million tonnes and puts it tantalizingly close to its 300 million tonne target which it hopes to achieve by the year-end.

Mr Ben James Managing director said "Ten months into the year and the global inventory is now sitting at more than a quarter of a billion tonnes with the high grade Ruoni South resource still to come in and Tenge beginning to flex its muscle.

He said that "This would not have been accomplished without the unswerving dedication of our technical team in Mozambique. The scoping study is progressing at pace and is assessing development routes that will capitalize on the project's unique proximity to abundant coal and water resources and some of the lowest tariff hydro-power in Africa.”

He added that "Importantly these are the critical complementary resources for establishing a fully integrated iron and steel industry."

The Tete project splits into two distinct parts the Singore area and directly to the north of this, the Massamba Group. Massamba can then be split into a number of target areas Chitongue Grande, Chimbala, the Tenge-Ruoni prospect and finally the rather blandly named South Zone.

Ruoni North inferred resource is 93 million tonnes with a head grade of 35% iron ore (Fe) and an indicative concentrate grade of 58% Fe, 0.8% vanadium oxide and 13% titanium dioxide. Chitongue Grande’s inferred resource base increased from 48 million tonnes to 61 million with a head grade of 25% Fe and an average concentrate grade of 64%.

Baobab said drilling at Ruoni South, meanwhile has defined broad packages of mineralization delivering some of the best quality concentrate grades in the Massamba Group. These included a consistently high grade of vanadium. Independent consultant Coffey Mining is on schedule to deliver a resource estimate by the end of November.

The company revealed that the high mass recoveries recorded at the Ruoni North deposit means that it will yield more than double the concentrate per tonne of ore processed than its South Zone or Chitongue Grande counterparts. Drilling is progressing steadily at Tenge, outlining substantial zones of strong mineralization. First analytical results are expected during December.

Finally the group reiterated that the compilation of a scoping study on the project is at an advanced stage with preliminary results expected in the latter half of November. The plan in the next three-and-a-half to four years is to create an operation that will initially export magnetite and an increasingly more profitable ilmenite concentrate. It will then move into the production of pig iron using well established rotary hearth furnace technology successfully employed in South Africa and New Zealand.

The capital costs of such a project are substantial, at anywhere between USD 500 million to USD 750 million but off-set by the staggering revenue potential of pig iron, magnetite and ilmenite concentrate production. When compared to some of the iron ore projects planned for West Africa that requires a huge investment in infrastructure, Baobab Tete project looks much more affordable.

(sourced from Proactiveinvestors)

SAIL led consortium may win mining contract in Afghanistan

Tuesday, 01 Nov 2011

TNN reported that shortly after it signed a strategic partnership pact with Afghanistan, India's engagement with Kabul is all set to blossom further with two Indian companies, one of them a government backed consortium led by SAIL, likely to win the contract for iron ore mining at Hajigak in Bamiyan province.

According to US government estimates, in a country where there are untapped mineral resources worth USD 1 trillion, the Hajigak iron ore mining entails the single largest foreign investment by any country for such a project in the war torn country.

SAIL and NMDC are heading a consortium of seven companies which has bid for the contract as a part of the Dr Manmohan Singh led government's initiative to further enhance India's role in Afghanistan, a country in which India has pledged investment worth USD 2 billion. Another Indian company which has bid separately is corporate Ispat Alloys.

According to Afghanistan's minister of mines Mr Wahidullah Shahrani, the two Indian entities have emerged as the most potential companies for Hajigak. The final decision is likely to be taken by Afghan authorities in early November. Other companies from Canada, US and Iran too are in the fray.

Foreign secretary Mr Ranjan Mathai had met Mr Shahrani during his visit to Afghanistan last month during which he is said to have pushed the case for Indian firms.

If the SAIL led consortium does indeed win the contract, the deal will surpass the USD 4 billion contract signed by China for copper mining in the Logar province four years ago. In fact, the contract can help India dispel the notion that it is reduced to playing catch up with China which has won most of the major mining contracts in Afghanistan.

The SAIL led consortium has bid for all four Hajigak mining blocks. Government authorities have backed the bid maintaining that it makes strategic as well commercial sense to have a presence in mining in Afghanistan.

(sourced TimesofIndia)

India, China in line for Afghan mine, oil contracts

Thu,Oct27, 2011

LA HULPE, Belgium (Reuters) - Indian and Chinese bidders are front-runners to be awarded contracts for iron ore and oil projects in coming months, the country's mining minister said on Wednesday.

The winner of the Hajigak iron ore project will be announced in early November, Minister of Mines Wahidullah Shahrani told Reuters on the sidelines of a conference in Belgium.

"Two Indian bidders have emerged as the most potential companies for Hajigak," he said, adding that the bids came from one individual Indian company and one Indian consortium.

The winning bid for oil and gas exploration in northern Afghanistan's Amu Darya field will be decided in early December, Shahrani said.

"China has emerged as the most potential bidder for Amu Darya, and we will announce this in six weeks' time," he added.

(sourced Reuters)

Australia still attracts investments in iron ore despite tax issues

Sunday, 23 Oct 2011

Commodity Online reported that carbon tax introduced in Australia affects little over the investments in the iron ore sector, the major players like BHP Billiton and Rio Tinto continues with their investment in the mineral resource.

Mr Martin Hoffman acting secretary, Department of Resources, Energy and Tourism said "In our contact with them we have seen no change in those plans to continue the substantial expansions in port facilities and mines in the iron-ore sector."

According to BHP's September Quarterly reports, its Western Australian iron ore shipments rose 28% higher than the previous corresponding period to a record annualized rate of 173 million tonnes a year in September 2011.

The Chinese demand for iron ore has been the driver for the Australia major producers.

(sourced commodityonline)

Australia Indo Mines plans USD 1 billion Indonesia iron project

Saturday, 22 Oct 2011

Reuters reported that Australia Indo Mines is to start construction of a USD 1 billion project on Indonesia Java Island in December to begin operations in at least three years to produce 9 million tonnes to 15 million tonnes of iron ore a year.

Mr Mudrajad Kuncoro a local government official in Yogyakarta, central Java said the joint venture will involve PT Jogja Magasa Iron which will own a 30% stake in the project. He said that "We expect the ministry of energy and mineral resources to issue the permit to PT Jogja Magasa Iron in mid-November this year so the company can start its project in early December."

Indo Mines was not immediately available for comment.

Mr Kuncoro said the project will consist of a plant with production capacity of 1 million tonnes of pig iron and 2 million tonnes of iron concentrate per year, as well as a port a coal fired power plant, oxygen plant and water treatment facility.

He said that when it starts operations in three to five years time the project will produce 9 million tonnes to 15 million tonnes of iron ore annually and will consume around 1.2 million tonnes of coal annually.

The world fourth most populous country drew in a record USD 9.6 billion in foreign direct investment in first-half 2011 lured by its relatively stable politics and strong economy plus abundant resources and consumer spending power.

Despite issues over infrastructure, corruption and labour disputes, that trend is expected to continue as global firms look to take advantage of cheap labour and Indonesia huge mineral wealth.

(sourced from Reuters)

India and Afghanistan ink pact for cooperation in mining

Thursday, 06 Oct 2011

PTI reported that further cementing bilateral ties, India and Afghanistan on Tuesday signed three pacts including an agreement on strategic partnership in mining.

The Strategic Partnership agreement was signed by Indian Prime Minister Dr Manmohan Singh and Afghan President Mr Hamid Karzai.

The MoU signed between the Indian and Afghan ministry of mines on cooperation in the field of mineral resources development aims at promotion of private and public sector investment in mining and mining-related activities as well as mineral exploration and exploitation and capacity building in the field of geosciences and mining in Afghanistan.

(Sourced from PTI)

Expanding iron ore supply weighs on price

Tue, Oct04, 2011

There is a growing rift between the major mining companies and investor forecasts for the future of iron ore prices. Investors are worried that a faltering economic recovery a slowing Chinese economy coupled with increasing supply of iron ore will cause a drop in price. While mining companies, the likes of BHP Billiton, Rio Tinto and Vale SA are still confident that demand will remain high supporting prices through 2015.

Most analysts point to flattening demand from China, the world largest producer and consumer of steel as a major factor. Iron ore makes up the bulk of revenue for these major mining firms. However, the lack of investor confidence concerning the Chinese and global economy is affecting steel demand and the share prices for iron ore mining firms are on a downward trajectory.

1. Iron Ore Supply Increases

The increased supply of iron ore will come from Brazil and Australia. For instance, BHP’s Pilabra projects in Western Australia are set to increase production dramatically over the next decade.

Mr Ian Ashby President of BHP’s iron ore division stated his company is setting a long term production target of 450 million tonnes of iron ore a year to full exploit the potential of his division assets. He added that BHP is well positioned for a drop in prices as the company’s production costs remain below USD 40 per tonne.

Rio Tinto has targeted increasing production in the region to 433 million tonnes from an existing capacity of 225 million tonnes per year.

2. Price Outlook

The increase in supply, estimated to increase 53 percent by 2015 has prompted analysts to take a bearish outlook for iron ore prices, and consequentially the earnings potential for the mining firms.

According to the median estimates of 10 analysts surveyed by Bloomberg News “Global prices may fall 29% to an average USD 123 a metric ton in 2015 from a record USD 173 this year. The survey also stated that reduced ore prices will cut the income of BHP and Vale as much as 50 percent by mid-decade.”

However, the dramatic increases in supply have not changed the optimistic outlook of the mining companies.

Mr Sam Walsh head of Rio Tinto iron ore division recently commented on the demand for iron ore “They are still very good price and we are shipping flat out.”

He added that he has had to smile at recent reports pointing to falling iron ore prices. Walsh also cited that the bulk of the new capacity will not come online until 2015, supporting prices over the next four years.

(sourced from ResourceInvestingNews)

Legacy Iron Ore expounds on rationale for NMDC proposed investment

Saturday, 01 Oct 2011

Proactive Investors reported that Legacy Iron Ore said that India’s National Mineral Development Corporation, which has proposed an equity investment in Legacy, was committed to using Legacy for further acquisitions in bulk commodities.

Several projects have already been reviewed by NMDC and Legacy, including an established JORC compliant coal project. The strategy behind the proposed cornerstone 50% investment by NMDC in Legacy was outlined today.

NMDC also had the capacity to deliver large scale financing through lines of credit and off-take financing, provides Legacy with unrivalled long-term development security and access to additional opportunities.

Mr Rana Som NMDC Chairman said recently "With our expertise in iron ore mining and steel-making and their exploration expertise, we will make a perfect synergy for both the companies. Simultaneously, it will provide us a ready-made foothold in Australia."

Mr Sharon Heng Chief executive of Legacy said there were considerable benefits to shareholders. He said that “Legacy Iron Ore has taken a first mover advantage in securing a highly desirable cornerstone investor who can contribute significantly to the company ability to grow value and develop ongoing assets and acquisitions regardless of financial market conditions.”

The proposed equity participation by cornerstone investor NMDC is a critical enabler and first step in executing on this strategy.

The investment by NMDC is an Australian first providing Legacy with first mover advantage to drive shareholder value.

Since this investment and strategic alliance, Jupiter Mines' market capitalization has increased from approximately USD 42 million to USD 528 million at present.

Specifically, the benefits for Legacy shareholders from the NMDC strategic plan were seen as:
1. Unlocking hidden shareholder value, through the spin-off of core and non-core assets
2. The acquisition of new projects. Potential projects are currently being assessed
3. Project financing in general, but in particular, the potential to take the Mt Bevan Iron Project from exploration to production, once Legacy has secured its 60% Joint Venture interest from Hawthorn Resources Limited, after spending USD 3.5 million. Significant work is underway to underpin this outcome, which will be the subject of a later release
4. Ability to develop the necessary infrastructure in the Central Yilgarn area
5. Development funding for a range of existing and potential projects
6. Underwriting of future capital raisings to ensure funding is available to move projects forward, irrespective of global financial market cycles
7. Practical experience in large scale iron ore resource development and production
8. Mineral research and development capabilities
9. Off-take access to proven and ready purchasers in Japan, South Korea and China

Mt Bevan is a joint venture between Legacy and Hawthorn Resources hereby Legacy will earn a 60% interest in the project by expending a minimum of USD 3.5 million to develop the project to a pre-feasibility status.

(sourced from ProActiveInvestors)

Race for resources - NMDC confirms bidding for 50pct stake in Legacy Iron Ore

Thursday, 15 Sep 2011

Press Trust of India reported that Indian state owned miner NMDC today said it has submitted a formal binding bid to acquire 50% stake in Australian exploration firm Legacy Iron Ore for an undisclosed amount.

Mr Rana Som chairman of NMDC told PTI over phone from Istanbul that “We have submitted a formal binding bid for acquiring 50% stake in Legacy, as was envisaged in the MoU inked with them and if Legacy's Board approves it, we will be taking stake in the Australian firm.”

He, however, declined to comment on the deal size by saying that it is still confidential".

However, according to industry sources, the deal size is in the range of AUD 32 million to AUD 40 million (INR 150 crore to INR 200 crore).

Legacy said in a filing to the Australian Securities Exchange yesterday that it has received a formal proposal from NMDC to form a strategic alliance. Trading of its shares on the ASX has been halted till tomorrow.

(Sourced from PTI)

Rio Tinto to invest more in Pilbara iron ore expansion

Thursday, 15 Sept 2011

Rio Tinto is to invest USD 833 million (Rio Tinto share USD 706 million) in major power and fuel supply projects as part of its drive to substantially increase iron ore production capacity in Western Australia.

Rio Tinto's integrated Pilbara power and gas network will be upgraded with a USD 520 million investment and a further USD 313 million will be allocated to fuel infrastructure facilities.

The projects are needed to support annual production capacity of 283 million tonnes per annum, a milestone Rio Tinto has targeted for 2013. The fuel infrastructure project will also help support the next phase of potential expansion, to 333 million tonne per annum in 2015.

Mr Sam Walsh CEO Iron Ore and Australia said "This investment marks yet another significant step towards the expansion of iron ore production by 50 per cent in the five years to 2015, a timeline we recently brought forward by six months. These projects provide certainty in meeting our power and fuel supply requirements, both now and into the future."

Power infrastructure
A USD 520 million (Rio Tinto share USD 417 million) upgrade of the integrated power and gas network will deliver an additional 120 MW to sustain the current 230 million tonne per annum capacity and support expansion to 283 million tonne per annum. Two 40 MW open cycle gas turbines will be installed as part of a new power station near the West Angelas mine site and a 40MW open-cycle gas turbine will be built at the existing Yurralyi Maya Power Station near Dampier. The investment also provides for associated power infrastructure such as substations, gas pipelines and transformers.

Fuel facilities
The USD 313 million investment (Rio Tinto share USD 289 million) in fuel infrastructure will support the expansion programme to 283 million tonne per annum, and provide some of the capacity needed for expansion to 333 million tonne per annum. On completion, the fuel network will have a total storage capacity of 100ML, with 56ML additional capacity at Parker Point port terminal at Dampier. Two new inland distribution hubs will also be created, removing the requirement for two trains to transport fuel from Port Hedland, some 400 kilometres to the north.

Rio Tinto's schedule for expanding its integrated Pilbara operations is as follows
225 million tonne per annum - current operating capacity
230 million tonne per annum by end of Q1 2012 - Dampier port incremental (in implementation)
283 million tonne per annum by end of H2 2013 - Cape Lambert 53 million tonne per annum increment (in implementation)
333 million tonne per annum by end of H1 2015 - Cape Lambert 50 million tonne per annum increment (in feasibility study)

Indian investment in Hajigak iron ore mine in Afghanistan

Saturday, 27 Aug 2011

Mr Dinsha Patel minister of state for mines informed the Lok Sabha that the government of Afghanistan had invited offers for commercial exploitation of Hajigak Iron Ore Deposit through the process of competitive bidding.

The ministry of mines convened a meeting of Indian mining companies, both private and public sector, on January 6th2011 and requested them to participate in the Expression of Interest.

The ministry of steel thereafter held a series of meetings to address the concerns expressed by the companies. The last date for bidding is September 4th 2011. The final decision of participation in the competitive bidding process, is a commercial decision of the individual companies.

WPG Resources sells iron ore assets to OneSteel

Monday, 22 Aug 2011

OneSteel Ltd has bought iron ore assets in South Australia including Peculiar Knob from WPG Resources Ltd for AUD 346 million, as it focuses more on iron ore exports.

OneSteel will also expand its export port facilities at Whyalla in SA to 12 million tonnes per annum by the fourth quarter of calendar 2012, from the current capacity of 6.5 million tonnes to 7.0 million tonnes, the company says.

The port expansion will cost about AUD 200 million.

The proposed sale of WPG Resources iron ore assets represents a return on WPG’s iron ore investment of AUD 70 million of about 400% and equivalent to AUD 1.40 per share in a market where cash is king. WPG will distribute the after-tax proceeds of the sale to shareholders upon requisite approvals.

The transaction will deliver a distribution of cash that exceeds WPG’s current share price, with the additional benefits of franking credits.

The transaction will be effected by the sale of WPG’s subsidiaries Southern Iron Pty Ltd, Central Iron Pty Ltd and Coober Pedy Resources Pty Ltd on a cash and debtfree basis.

Southern Iron’s principal project assets are the Peculiar Knob mining lease and the Buzzard mineral claim and all of the approvals and tenements in the Coober Pedy area necessary to develop the Peculiar Knob project. Central Iron owns the Hawks Nest exploration licence, while Coober Pedy Resources owns the Mt Brady and Windy Valley tenements.

The sale does not include WPG’s subsidiary Spencer Gulf Ports Pty Ltd which owns land in Port Pirie and the right to develop a bulk commodities export facility pursuant to the development consent previously announced. Neither does it include Southern Coal Holdings Pty Ltd, the joint venture vehicle with Evergreen Energy Inc that owns the Penrhyn and Lochiel North coal deposits and which has the exclusive rights to use Evergreen’s coal upgrading technology in Australia for the first 15 mtpa of product coal from any project, not just from tenements that it currently holds.

The sale is contingent on a number of items including approval by WPG’s shareholders. In the absence of a superior proposal
1. WPG’s Board will unanimously recommend that WPG’s shareholders vote in favour of the sale; and
2. Each director of WPG will vote (or procure the voting) of all shares held or controlled by him or her in favour of the sale.

The general meeting of shareholders that will be convened to consider the sale will be held on or about 4 October 2011.

The Company’s iron ore deposits lie in the Peculiar Knob and Hawks Nest tenements in the Gawler Craton south of Coober Pedy with a resource of 19.2 million tonnes at 64.0% iron that the company intends to bring into production in 2011 at a rate of 3.3 million tonnes per year for an approximate five year mine life. The coal projects are located in the Coober Pedy region and in the southern part of SA at Lochiel and Pidinga.

(sourced proactiveinvestors)