JOHANNESBURG (miningweekly.com) – JSE-listed diversified mining company Petmin intends taking another 10% of Canadian company North Atlantic Iron Corporation (NAIC) to give it 40% of the enterprise that is on the cusp of potentially producing the world’s lowest-cost pig iron.

Petmin, which reported to Mining Weekly Online in a video interview in 2012 of a potential listing on the TSX, in Toronto, and a concomitant secondary listing on the JSE, in Johannesburg to facilitate unbundling, said on Monday that it was contemplating exchanging the 40% in NAIC for 40% of the shares in a Canadian company that would be listed in both Toronto and Johannesburg.

The South African company, which has already invested R144-million in NAIC, with which it has joint management control of Grand River Iron Sands, will use its own financial resources to invest a further $8-million in NAIC to increase its stake to 40%.

It is envisaged that the first NAIC plant will be able to produce at a rate of 810 000 t of merchant pig iron a year using concentrate from Goose Bay in Canada’s Labrador province, or 874 000 t a year using higher-grade concentrate from other sources.

Petmin – which is headed by CEO Jan Du Preez and business development director Bradley Doig and which is best known for its Somkhele metallurgical anthracite operation in Kwazulu-Natal – indicated that NAIC’s production costs would be 25% lower than the current lowest cost deliverer to electric arc furnace steel industries of the United States and Europe.

Both Du Preez, a chartered accountant with a master’s degree in mergers, and Zimbabwe-born Doig, who began in mining with Samancor, now BHP Billiton, in 1988, have been with Petmin since 2006.

Petmin has an option to take up to 49.9% of the private Canadian company, which has performed three successful Hatch-overseen smelt campaigns in Forks, Pennsylvania, using concentrate produced from Goose Bay iron sands and a number of different grades of coal.

The company’s low cost is the result of low raw material and electricity input costs as well as proximity to markets, the favoured first location being the Great Lakes region of North America.

Potential garnet and zircon credits in the Goose Bay iron sands is also said to have the potential to increase “significantly” the value of the iron sands deposit

“We believe we can produce the lowest-cost pig iron on the planet,” Doig told Mining Weekly Online in the attached video interview in 2012.

“Ultimately, we think this project is so scalable that it can be a standalone TSX listing,” Du Preez added to Mining Weekly Online in the same video interview at the time.

Grand River has local community members among its shareholders and both Petmin and Grand River will draw on its experience with near-mine communities in South Africa to engage the local Canadian communities and make them part of the business.

Some 2 000 MW of hydropower at the unbelievably low cost of US2.5c/kWh has been available to the investors.