A bankable feasibility study (BFS) on the Wadi Sawawin iron-ore project in Saudi Arabia has indicated that the operation would be feasible at either five-million tons or ten-million tons a year, London Mining said on Wednesday.
Financing for the mining will get under way next year, and is expected to be in place by the end of 2010, the firm said.
UK-based London Mining owns 50% of the project through its interest in the Saudi London Iron joint venture, with the Saudi Arabian National Mining Company.
"The results of the BFS have been presented to the Ministry Of Petroleum and Mines in Jeddah, who continue to be supportive of the project," the company said in a statement.
The Wadi Sawawin project will supply direct reduction pellets for use in the direct-reduced-iron steel plants that account for 90% of steel production in the Middle East and North Africa.
The location of the project is expected to create a competitive advantage over Brazilian and European supply through reduced freight rates from its deep water port in the Red Sea and access to low cost Saudi Arabian oil.
The project also forms part of Saudi Arabia's efforts to diversify its economy.
The BFS assessed two potential scenarios for the project, producing either five-million or 10-million tons a year.
"The project has been shown to be technically and economically sound, scalable with a large resource base and possesses areas of strategic and competitive advantage over alternative sources of DR pellet supply due to market proximity and competitive operating costs," said London CEO Graeme Hossie.
Mining and primary crushing will take place at the mine site, after which ore will be transported 52 km by road to a beneficiation and pelletising plant on the coast, adjacent to the proposed deep-water port and related power and desalination facilities.
Capital for the five-million scenario is estimated at $2-billion, comprising $184-million for the mine and ore transportation, $399-million for processing, filtering and tailings, $246-million for pelletising and $556-million for port, power, desalination plant and other infrastructure.
The balance of the expenditure is for construction, engineering, procurement and construction management services, owners costs, design allowance and contingencies.
In this scenario, the operating cost is estimated at $47,44 per dry metric ton of pellets.
The current Jorc resource will be enough for a mine life of 14-years at a run rate of five-million tons a year, although London expects to add to the resources and confirm a 20-year mine life early in 2010.
If the company were to decide on a ten-million ton a year operation, the total capital expenditure would rise to $3,2-billion, the company said.
The Saudi London Iron joint venture is holding discussions with the Saudi Binladin Group regarding financing and offtake arrangements, London confirmed.
Standard Chartered, Milbank Tweed and Al Sawaf have been engaged to advise on the financing process and the joint venture expects to raise financing to build the project through a combination of funding from local sources, commercial debt and the provision of offtake arrangements in exchange for an equity stake.
The minimum leverage achievable is expected to be 60%, London said.
The next milestone for the project is the completion of an updated resource estimate in the first quarter of 2010.
Once financing is in place construction is anticipated to take 27 months, with commissioning currently targeted for the second quarter of 2013.
Source: Mining Weekly
Showing posts with label Saudi Arabia. Show all posts
Showing posts with label Saudi Arabia. Show all posts
Thursday, December 24, 2009
Thursday, March 12, 2009
Silicon Carbide Plant Planned For Saudi
Saudi Arabia's Algosaibi Group has signed a memorandum of understanding (MOU) with Washington Mills Management of the USA and Sumitomo Corporation of Japan to build and operate a silicon carbide manufacturing plant in Saudi Arabia.
Silicon carbide boasts a high thermal conductivity and thermal shock resistance. It can be used for slicing wafers for the photovoltaic industry and for diesel particulate filters. Products made from the material are also found in the manufacturing process of semiconductors, power lighting, switching and diodes.
“Silicon carbide is a highly added value project to the Saudi Arabian economy and its industrial landscape. It will enhance local manufacturing diversity and promote new industries and expand exports,” said Algosaibi Group managing director Saud Algosaibi.
The plant will originally have a production capacity of 24,000 metric tonnes per year and will be located in Jubail Industrial Park. It is hoped that production will begin in 2011.
“Currently, there is a worldwide shortage of first quality silicon carbide, particularly in the Asian markets. We believe that a Saudi plant will enable us to serve this fast growing market,” added Sumitomo’s general manager of industrial performance materials department, Rei Ito.
Source: Arabianoilandgas.com
Silicon carbide boasts a high thermal conductivity and thermal shock resistance. It can be used for slicing wafers for the photovoltaic industry and for diesel particulate filters. Products made from the material are also found in the manufacturing process of semiconductors, power lighting, switching and diodes.
“Silicon carbide is a highly added value project to the Saudi Arabian economy and its industrial landscape. It will enhance local manufacturing diversity and promote new industries and expand exports,” said Algosaibi Group managing director Saud Algosaibi.
The plant will originally have a production capacity of 24,000 metric tonnes per year and will be located in Jubail Industrial Park. It is hoped that production will begin in 2011.
“Currently, there is a worldwide shortage of first quality silicon carbide, particularly in the Asian markets. We believe that a Saudi plant will enable us to serve this fast growing market,” added Sumitomo’s general manager of industrial performance materials department, Rei Ito.
Source: Arabianoilandgas.com
Saturday, February 21, 2009
London Mining Pushes Ahead With Saudi, Greenland Iron Ore Projects
Oslo listed London Mining has announced positive findings from a combined feasibility and market study into the Wadi Sawawin Iron Ore Project in Saudi Arabia.
London Mining and joint venture partner, National Mining Company of Saudi Arabia, considered a Phase I development which will include a 5 million tonne per annum (mtpa) mining and pelletising operation that is planned to be in production by 2012, assuming early financing can be arranged. The joint venture has already signed a strategic memorandum of understanding (MOU) with Saudi Advanced Production for Iron & Steel Ltd for full off-take and financing of development capital.
Highlights from the studies, released this morning, included a net present value (NPV) of US$1.6 billion and capital expenditure (capex) of US$1.8 billion to develop an 11.6 mtpa open pit iron ore mining operation supplying a benefication and pelletizing operation via a 60 kilometre slurry pipeline to produce 5 mtpa of DR pellets for sale via the Red Sea. The study assumed a long term pellet price of US$115/tonne free on board (FOB), however, the study also noted that the price was considered conservative considering a forecast gap of supply/demand in the Middle East and the premium it could fetch for lower transportation cost due to the close proximity to consumers.
The open pit mine would have an initial life of 14 years and benefit from a low stripping ratio (1.25) with payback anticipated to be 6 years. The iron grade of the open pit is expected to average around 41%, with a pellet grade of 67.2%.
“The proposed port and pellet site in Saudi Arabia offers proximity to customers and pelletising cost advantages, such as low natural gas costs, to maximize margins available in DR pellet production. London Mining's and the National Mining Company of Saudi Arabia's objective are to create a globally competitive low cost, premium product operation,” the company stated.
Phase II and III of the project envisages the joint venture shipping additional feed from a second iron ore project in Greenland which would allow pellet production to eventually reach 15-20 mtpa.
"The feasibility results on the first 5 mtpa phase of the Wadi Sawawin project demonstrate that a new, high tonnage, high margin iron mine and pelletizing operation can be established in the Middle East through the London Mining and National Mining Company joint venture. Given the current commercial situation and trends with suppliers, we will be aiming to reduce the final capex spend and also expect upside in pricing due to the ongoing supply gap in the region and globally. The Wadi Sawain project has the ability to establish a significant new DR pellet production hub in a region with growing steel production and a deficit of supply. Through our partners, we anticipate full funding for the project will be made available on attractive financing terms,” summarised Graeme Hossie, Managing Director of London Mining.
London Mining and joint venture partner, National Mining Company of Saudi Arabia, considered a Phase I development which will include a 5 million tonne per annum (mtpa) mining and pelletising operation that is planned to be in production by 2012, assuming early financing can be arranged. The joint venture has already signed a strategic memorandum of understanding (MOU) with Saudi Advanced Production for Iron & Steel Ltd for full off-take and financing of development capital.
Highlights from the studies, released this morning, included a net present value (NPV) of US$1.6 billion and capital expenditure (capex) of US$1.8 billion to develop an 11.6 mtpa open pit iron ore mining operation supplying a benefication and pelletizing operation via a 60 kilometre slurry pipeline to produce 5 mtpa of DR pellets for sale via the Red Sea. The study assumed a long term pellet price of US$115/tonne free on board (FOB), however, the study also noted that the price was considered conservative considering a forecast gap of supply/demand in the Middle East and the premium it could fetch for lower transportation cost due to the close proximity to consumers.
The open pit mine would have an initial life of 14 years and benefit from a low stripping ratio (1.25) with payback anticipated to be 6 years. The iron grade of the open pit is expected to average around 41%, with a pellet grade of 67.2%.
“The proposed port and pellet site in Saudi Arabia offers proximity to customers and pelletising cost advantages, such as low natural gas costs, to maximize margins available in DR pellet production. London Mining's and the National Mining Company of Saudi Arabia's objective are to create a globally competitive low cost, premium product operation,” the company stated.
Phase II and III of the project envisages the joint venture shipping additional feed from a second iron ore project in Greenland which would allow pellet production to eventually reach 15-20 mtpa.
"The feasibility results on the first 5 mtpa phase of the Wadi Sawawin project demonstrate that a new, high tonnage, high margin iron mine and pelletizing operation can be established in the Middle East through the London Mining and National Mining Company joint venture. Given the current commercial situation and trends with suppliers, we will be aiming to reduce the final capex spend and also expect upside in pricing due to the ongoing supply gap in the region and globally. The Wadi Sawain project has the ability to establish a significant new DR pellet production hub in a region with growing steel production and a deficit of supply. Through our partners, we anticipate full funding for the project will be made available on attractive financing terms,” summarised Graeme Hossie, Managing Director of London Mining.
Monday, February 2, 2009
Citadel Announced Jabil Sayid Update
Citadel Resource Group Limited is pleased to announce that it has completed an updated estimate of the mineral resources at Jabal Sayid. Jabal Sayid (50%) is the flagship project in Citadel's portfolio of Saudi Arabian gold and base metal projects.
The updated Indicated and Inferred Mineral Resource estimate for copper totals 99million tonnes and includes 77 Mt at 1.3% Cu, 0.2% Zn (Cu Stockwork), 21 Mt at 0.9% Cu & 1.8% Zn (Cu/Zn Massive Sulphide) and 0.5Mt at 1.6% Cu (oxide Cu). In addition the gossan on Lode 1 contains 1.4Mt at 1.3g/t Au, 15.8g/t Ag, 0.1% Cu (Oxide gold cap).
The copper stockwork mineralisation contained in Lode 2 and Lode 4 at Jabal Sayid is the subject of a feasibility study for a 3.4 Mtpa underground mine. Upgrading the mineral resources at Jabal Sayid has been a focus of drilling activity throughout 2008. Drilling during this period has been carried out primarily to upgrade the confidence in material previously classified in the Inferred Resource category so that it can be classed as Indicated Resource in preparation for conversion to a mining Reserve. This has been achieved with the Indicated resource now comprising 480,000 tonnes of contained copper with only 7,000m of drilling left to complete the DFS.
Total copper resources using a 1% Cu cut-off now comprise 40 million tonnes at 2.3% Cu, for 926,000t contained copper. This is a 29% increase on the previously reported Lode 2 and Lode 4 high grade material defined in the previous resource statement (31Mt @ 2.3%). This was achieved by extending the zones in Lode 2 and Lode 4 and the inclusion of Lode 1 high grade copper resources following exploration success in 2008.
Citadel will be completing a further mineral resource estimate at the conclusion of the infill drilling needed for the DFS. This further resource will also include updates from the exploration success reported after the resource cut-off date of November 2008 and gold and silver credits for Lodes 2 and 4. The resource remains open at depth and along strike at Lodes 1 and 2 and at depth in Lode 4.
Commenting on the Mineral Resource, Inés Scotland CEO of Citadel said:
"I am extremely pleased with this result, especially given drilling was primarily focused on infill drilling for the DFS rather than resource extension. Twelve months after releasing our first Mineral Resource update we have again upgraded total contained copper by over 20% and the higher grade copper core by almost 30%. This is the second of many anticipated upgrades, as Jabal Sayid remains open in most directions.
The DFS continues to progress to schedule and we are nearing the completion of the revised Feasibility Study by the integrated Citadel/SNC Lavalin team. As flagged in our last project update the team continues to achieve material reductions in capex for Jabal Sayid and I look forward to presenting shareholders with the results of the completed study."
The updated Indicated and Inferred Mineral Resource estimate for copper totals 99million tonnes and includes 77 Mt at 1.3% Cu, 0.2% Zn (Cu Stockwork), 21 Mt at 0.9% Cu & 1.8% Zn (Cu/Zn Massive Sulphide) and 0.5Mt at 1.6% Cu (oxide Cu). In addition the gossan on Lode 1 contains 1.4Mt at 1.3g/t Au, 15.8g/t Ag, 0.1% Cu (Oxide gold cap).
The copper stockwork mineralisation contained in Lode 2 and Lode 4 at Jabal Sayid is the subject of a feasibility study for a 3.4 Mtpa underground mine. Upgrading the mineral resources at Jabal Sayid has been a focus of drilling activity throughout 2008. Drilling during this period has been carried out primarily to upgrade the confidence in material previously classified in the Inferred Resource category so that it can be classed as Indicated Resource in preparation for conversion to a mining Reserve. This has been achieved with the Indicated resource now comprising 480,000 tonnes of contained copper with only 7,000m of drilling left to complete the DFS.
Total copper resources using a 1% Cu cut-off now comprise 40 million tonnes at 2.3% Cu, for 926,000t contained copper. This is a 29% increase on the previously reported Lode 2 and Lode 4 high grade material defined in the previous resource statement (31Mt @ 2.3%). This was achieved by extending the zones in Lode 2 and Lode 4 and the inclusion of Lode 1 high grade copper resources following exploration success in 2008.
Citadel will be completing a further mineral resource estimate at the conclusion of the infill drilling needed for the DFS. This further resource will also include updates from the exploration success reported after the resource cut-off date of November 2008 and gold and silver credits for Lodes 2 and 4. The resource remains open at depth and along strike at Lodes 1 and 2 and at depth in Lode 4.
Commenting on the Mineral Resource, Inés Scotland CEO of Citadel said:
"I am extremely pleased with this result, especially given drilling was primarily focused on infill drilling for the DFS rather than resource extension. Twelve months after releasing our first Mineral Resource update we have again upgraded total contained copper by over 20% and the higher grade copper core by almost 30%. This is the second of many anticipated upgrades, as Jabal Sayid remains open in most directions.
The DFS continues to progress to schedule and we are nearing the completion of the revised Feasibility Study by the integrated Citadel/SNC Lavalin team. As flagged in our last project update the team continues to achieve material reductions in capex for Jabal Sayid and I look forward to presenting shareholders with the results of the completed study."
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