19 November 2012

Mozambique: Baobab Seeking Partner for Pig Iron Smelter

Maputo — The British company Baobab Resources has announced that it is looking for a joint venture partner to build a massive pig iron smelter in the western Mozambican province of Tete.

According to Baobab’s Managing Director, Ben James, test drilling by the company across its deposits in the province has found 482 million tonnes of iron ore. Further drilling is expected to increase this by between 120 and 260 million tonnes.

James told AIM that preliminary results indicate that the iron ore can be separated relatively cheaply and will not need to involve high energy milling and wet separation (instead using coarse crushing and dry magnetic separation in a process known as coarse cobbing).

He said that this would “represent significant savings in both capital and operational costs”.

Baobab is looking to smelt the iron ore into pig iron, and James said that there is enough iron ore on site to support a 1 million tonne per annum (Mtpa) pig iron operation lasting over a hundred years, adding that “we are looking at a range of production scenarios up to 4 Mtpa”.

James stressed that “it is important to note that the world’s single largest pig iron operation produces 2.5 Mtpa”.

Baobab is working on a model with initial production of 1 Mtpa, expanding to 2 Mtpa by year seven and possibly even 3 or 4 Mtpa by year fourteen.

As a result, “Baobab’s project will, without doubt, become a world class pig iron operation, firmly establishing Mozambique as an iron and steel hub in the SADC region”.

Ben James emphasised the support the company has had from the Mozambican government. He said “we have received unparalleled support from the Ministry for Mineral Resources (MIREM) and have had the honour of hosting the Minister, Esperanca Bias, on site on a number of occasions”.

He added that “MIREM is very proactive, with a ‘hands on’ approach that encourages collaboration with the private sector. We are also working with the Ministry of Energy and CFM (Mozambique’s publicly owned ports and rail company), all of whom understand the immense potential and importance of adding value in Mozambique through the beneficiation of iron ore, coal and power to generate the higher value, higher demand pig iron product”.

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