Name of the Project
Mutamba mineral sands project.

Location
The project is located in the Inhambane province of Mozambique.

Project Owner/s
The project is being developed by Savannah Resources and Rio Tinto.

Savannah is the operator of the Mutamba project, which it is developing in a consortium with Rio Tinto.

Savannah holds a 20% interest in the consortium and can increase its equity to 35% upon the delivery of a prefeasibility study (PFS), and to 51% upon the delivery of a definitive feasibility study.

Savannah has a consortium agreement with diversified mining company Rio Tinto, which combines Savannah’s Jangamo project with Rio Tinto’s adjacent Mutamba project, which includes three deposit areas – Jangamo, Dongane and Ravene – and the Chilubane deposit, which is located 180 km south-west of the Mutamba project.

Project Description
A scoping study on the project has concluded that there is potential for a financially robust, long-life mineral sands project that is expected to provide excellent life-of-mine financial returns with relatively modest capital requirements. The project combines Savannah’s Jangamo project with Rio Tinto’s adjacent Mutamba project, which includes the Jangamo, Dongane and Ravene deposits, as well as the Chilubane deposit, which is located 180 km south-west of the Mutamba project.

Mutamba has a global mineral resource of 4.4-billion tonnes at 3.9% total heavy minerals (THM) comprising indicated and inferred category material and containing ilmenite, rutile and zircon. This includes a high-grade portion of 92-million tonnes at 6.2% THM, which has been defined at Ravene. Significant potential remains to expand the resource beyond its current boundaries, which will be the focus of future prospecting activities.

The initial life-of-mine of 30 years is based on a resource of 451-million tonnest at 6% THM, based on a conceptual mine plan using 33% indicated resource and 67% inferred resource.

Average yearly production, following ramp-up to a 15-million-tonne-a-year mining rate, has been estimated at 456 000 t of roasted ilmenite and 118 000 t of nonmagnetic concentrate (rutile and zircon).

Dozer trap mining methods have been selected for the project. Mined ore will be slurried and pumped to the nearby primary concentrator plant (PCP). The PCP has been sized for a nominal feed rate of 2 000 t/h to produce 800 000 t/y of heavy mineral concentrate (HMC), with a heavy mineral grade of more than 90%.

The PCP tailings will be pumped directly back into the mine void. The HMC will be trucked to the mineral separation plant (MSP), where it will be fed into the mineral separation circuit for processing to produce a magnetic roasted ilmenite product and a zircon-rich nonmagnetic concentrate. 

The MSP has been sized to process HMC at 105 t/h to produce about 70 t/h of roasted ilmenite and 15 t/h of nonmagnetic concentrate. Products will be trucked to the export facility and stored in a shed adjacent to the barge-loading facility before being exported.

Potential Job Creation
The project will have an expected final workforce of 332 people, with more than 1 000 indirect jobs expected to be created. The consortium is targeting 95% local participation once operations become established.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $245-million and an internal rate of return of 23%, with a payback of four years.

Capital Expenditure
Preproduction capital expenditure has been estimated at $152-million, plus contingency of $74-million.

Planned Start/End Date
Production is targeted for 2020.

Latest Developments
Diversified resources company Savannah Resources is eagerly awaiting the last outstanding mining lease approval for the Mutamba project.

The consortium includes an offtake agreement on commercial terms for the sale of 100% of production to Rio Tinto and will likely go to Rio Tinto’s Richards Bay Minerals operation in KwaZulu-Natal, South Africa.

Meanwhile, the PFS for Mutamba has been delayed because Savannah awaits the granting of the mining lease. Without a granted operative tenement, the required confirmatory drilling to feed into the study cannot be completed.

Key Contracts and Suppliers
AML (turnkey reassembly and commissioning of the pilot plant, including site survey; installation of a site security fence with an access lockable gate and security post; bulk earthworks; preparation of the old railway line to be used as the construction access road; and civil works, structural reassembly and processing equipment assembly) and TZMI (Phase 1 PFS).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Savannah Resources, David Archer, tel +44 20 7117 2489.