13/02/2008 - 22:00

Strong interest in West Africa

13/02/2008 - 22:00

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While the Pilbara might be considered among the world’s premier iron ore regions, there is significant iron ore potential in West Africa

While the Pilbara might be considered among the world’s premier iron ore regions, the significant iron ore potential of West Africa is being pursued by a growing number of Western Australian mining companies.

Mining giant Rio Tinto has already committed $US145 million to its Simandou project in Guinea, which it says is on track to become one of the world’s great mining provinces.

Rio’s pre-feasibility study into the 70 million tonne per annum mine is well advanced, with the project expected to cost in the order of $US6 billion.

It recently announced the appointment of current Pilbara Iron managing director and now-former Chamber of Minerals and Energy WA president, David Smith, to head up the project.

Perth-based Sundance Resources Ltd last week released an updated capital and operating cost estimate for its 35mtpa Mbalam Iron Ore project in Cameroon.

The estimates showed a potential operating cost of $US20.68/t on assumed production of 35mtpa direct shipping ore hematite, a 20 per cent increase on operating margin estimated in the 2006 scoping study.

Capital costs, including plant and development of port and rail infrastructure, have been estimated at $US3.27 billion, higher than the previously estimated $US2.5bn indicated in the 2006 scoping study.

Sundance Resources Ltd managing director Don Lewis said that, while the update reflected cost increases across the resources industry as a whole, the current cost estimates still remained competitive for a project of such a scale.

The Mbalam project is located close to the $3 billion Belinga Iron Ore project in Gabon, which is being developed by the China National Machinery and Equipment Import and Export Corporation.

Further north, in Mauritania, West Perth-based Sphere Investments Ltd also released interim results of a bankable feasibility study into its Guelb el Aouj iron ore project last week.

The study has estimated the capital cost for the project at $US1.9 billion, plus $US250 million for contingency and cost escalation, with operating costs coming in at between $US39.50 and $US41.50/t.

Sphere has formed joint venture partnerships with the state-owned Mauritanian iron ore miner Société Nationale Industrielle et Minière (SNIM) and Qatar Steel to develop the project.

The project is planned to produce 7mtpa of iron ore pellets for over 30 years from one deposit, with a total of five deposits in the joint venture area.

The parties also plan to develop additional pellet plants based on the resources within the joint venture area.

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