Kanyika gets initial thumbs up
Staff reporter, 23 June 2008
A COFFEY Mining scoping study on the Kanyika niobium-uranium project in central Malawi has indicated a $US177 million openpit mine and smelting operation producing up to 4000 tonnes per annum of niobium metal could achieve payback on invested capital within two years, without uranium revenues.
Globe Metals & Mining says the 100%-owned project, with a JORC-compliant inferred resource of 56 million tonnes also containing tantalum and zircon, could support a 20-year mine supplying up to 3.5mtpa of mill feed. It added the Kanyika resource had considerable expansion potential, remaining open at depth and along strike, “most importantly, to the north of the high-grade Milenje Zone”.
The Coffey/Globe $US3 billion revenue and $US1.1 billion free cash flow projections over 20 years use average ferro-niobium alloy (FeNb) prices of $US35/kg – compared with the current spot price of more than $US20/kg; $US45/lb for tantalum oxide (US47/lb spot); and $US600/t for zircon ($US800/t). “The scoping study does not include any potential revenues from uranium oxide production,” Globe said. “The metallurgical process adopted in the study assumes that uranium reports to the slag during smelting of the pyrochlore concentrate and is not recovered. Significant economic upside for the project exists if uranium can be economically extracted from the slag. Metallurgical testwork to ascertain whether this is feasible is proposed to commence shortly.”
Globe’s proposed metallurgical flowsheet has crushing followed by gravity concentration (to concentrate pyrochlore and zircon and remove waste minerals) and then conventional flotation to produce a pyrochlore concentrate grading about 25% Nb2O5 and 1% Ta2O5. Smelting to produce a FeNb alloy is expected to be via aluminothermic reduction in which the niobium combines with iron to form FeNb and the uranium separates into the alumina-dominant slag.
“Globe has not at this point carried out pyrometallurgical/smelter testwork in relation to the production of saleable FeNb from pyrochlore concentrate,” the company said.
“The proposed process route is aluminothermic reduction, which is the same process used by some of the other ferro-niobium producers. In addition to metallurgical testing and validation of this part of the proposed process flow sheet, market acceptability of the products proposed to be produced has not yet been demonstrated, which is typical for rare and specialty metal deposits of this type at this stage of development.”
The Coffey Mining study points to most of the FeNb being sold to the steel market and the balance as an intermediate product to producers of high-purity niobium and tantalum oxides.
Processing costs indicated at this stage are $US16/t at 1.5Mtpa, down to $US13/t at 4Mtpa, with mining and other sites costs at about $US7.60/t (at 1.7Mtpa).
Globe says its power requirement of an estimated 9MVA with mill throughput at 1.5Mtpa would most likely be met through on-site HFO or diesel generators, while access to raw and potable water “is not expected to be problematic”.
“This is another significant milestone towards the development of a mine,” said Globe managing director Mark Sumich.
“Both revenues and cash flows are substantial over the life-of-mine, and just as importantly, the capital expenditure is modest and the capital payback period short.
“There is also significant additional upside potential to the financial returns – this could come from improved metallurgical recoveries from testwork which is presently underway, the extraction of uranium if feasible or further exploration success at Kanyika.
“There is no doubt the company should and will forge ahead with this project.”
Sumich said last week demand for niobium, used in the steel industry as an additive to make high-strength, low-alloy steel products, was growing while the supply side of the equation – dominated by the “800-pound gorilla in the niobium world, Brazil-based CBMM’s Araxa mine – lacked exposure to pure ferro-niobium producers.
“[CBMM] supplies around 75-80% of the [world] market,” he said. “That has been the historical line in the sand for the steel smelters, who won’t accept any greater market dominance, with no desire to be beholden to a single supplier.”
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