New study lowers Southdown costs
PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Southdown magnetite project, in Western Australia, has identified a lower cost development option, compared with a 2012 definitive feasibility study (DFS).
ASX-listed Grange Resources completed the PFS earlier this year, and found that a smaller five-million-tonne-a-year concentrate production operation, would require a capital investment of A$1.39-billion.
This was compared with the 2012 DFS which considered a 10-million-tonne-a-year operation, with a mine life of 14 years and a capital cost of A$2.9-billion
Grange said on Tuesday that this alternative case extends the life-of-mine from 14 years to 28 years for the western zone, and potentially more than 50 years for the total resource. The pit-to-port operation will consist of an opencut mine with contract mining, a concentrator, a transhipping operation and renewable energy.
The 10-million-tonne-a-year DFS 2012 remains the base option, and the decision as to whether the alternative option is further studied to definitive feasibility will be an issue considered together by the joint venture partners.
“PFS 2022 considers innovation in the process to enable a reduction in the capital required to enable the project to proceed,” said Grange CEO Honglin Zhao.
“Southdown is a world-class magnetite deposit that is becoming increasingly relevant as steel markets continue to demand premium iron-ore products. At almost 70% iron content, Southdown’s concentrate product will be one of the highest-grade seaborne iron-ores in the world.”
The PFS estimated an all-in sustaining cost of A$84.12/t, with the project’s net present value estimated at A$243-million and its internal rate of return at 12%. C1 costs for the project have been estimated at A$60.61/t.
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