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Mining & Resources

IMX interview: Mt Woods and the impact of magnetite on iron ore mining

25 Jul 2013, by Informa Insights

Neil Meadows, Managing Director, IMX Resources
Neil Meadows

IMX Resources’ Mt Woods Project is a unique opportunity in the Australian magnetite industry as the infrastructure required to develop the project is already in place and being used by the company’s Cairn Hill mine. We had the chance to speak to Managing Director Neil Meadows about the current status of the magnetite project and the factors that determined the company’s choice of beneficiation process.

IMX Resources is actively developing the Mt Woods Magnetite Project. Can you tell us how the project has progressed so far? What are the next stages to advance the project further?

Neil Meadows: The project has so far seen the completion of:

  • Resource drilling at the Snaefell deposit yielding an inferred resource of 569 million tonnes at 27.1% iron;
  • Completion of a Concept Study on the project last year that gave us the impetus to continue on;
  • Diamond core drilling at Snaefell which produced sufficient samples for an extensive metallurgical testwork program which supported the completion of a Scoping Study;
  • Release of the Scoping Study results as a Preliminary Economic Assessment summary report last month which was followed by the release of the full report on the 19th July 2013;
  • Further exploratory drilling completed late last year to gain some understanding of some of the eastern magnetic anomalies on our ground in the Mt Woods inlier together with some preliminary metallurgical work that was reported on during July of 2013;
  • Commencement of a process of engagement with Azure Capital to find a partner for the project.

We will now continue on with planning and pre-commitment work that we can do in support of the next step which will be commencement of a pre-feasibility study once the partnering process has been completed.

What magnetite beneficiation process will you be using and what factors determined your decision? Do you anticipate additional costs for processing magnetite iron ore?

Neil Meadows: The great advantage with regard to the magnetite ore that can be found in the Mt Woods region in South Australia is the coarseness of its grain size from a mineralogical point of view.  We have determined that we can produce a saleable concentrate from the ore at a grind size of approximately 130 microns while grinding to a size of 75 microns will yield a product exceeding 68.5% iron.  All of these points have led to the development of a project that employs a very low risk flowsheet in terms of three stages of conventional crushing, dry magnetic separation, wet grinding in a ball mill followed by wet magnetic separation, thickening and filtering.  This flowsheet is also light on in terms of water and power consumption thanks to the ability to do a dry pre-concentration step after crushing to give a mill feed of around 35% iron, as well as wet grinding to a very coarse size by Australian standards although it is typical of Chinese magnetite flowsheets.

Regarding costs, mining magnetite is more expensive because it is rare to find magnetite of such a grade to be direct shipped as is the case with our Cairn Hill ore although that is assisted through the value of the copper contained within the ore.  So with magnetite you can generally assume that you will move more ore to ship a tonne of iron units than with most hematite ore bodies.

You also have to process magnetite so there are costs associated with that processing that are not experienced in hematite operations. For example, everything in the flowsheet post crushing which add costs but in the case of the Mt Woods project, not as much as is the case with finer grained magnetite deposits processed elsewhere.

Those two points being made, you can’t lose sight of the fact that the product produced from a magnetite processing facility will usually be superior to hematite products in terms of grade and therefore price achieved for its sale.  In some cases where magnetite concentrate can be compared with hematite direct shipping ores, a massive price differential will exist.

In your opinion, what impact will magnetite have on iron ore mining?

Neil Meadows: In the coming years there will be a gradual increase in the demand for magnetite concentrate as the benefits of feeding such a pure feedstock into steelmaking become apparent, and as steel producers improve their ability to get the relatively fine materials into furnaces without incurring huge costs in pelletising.  These are factors that are on the move already.  I believe that much of the Chinese steel industry will remain on the lookout to replace their depleting magnetite feedstocks with magnetite sources from countries such as Australia as they understand the benefits to their processes and in time they will be looking to minimise their energy costs in steel production which are exacerbated through feeding relatively impure feedstocks into their furnaces. Those factors coupled with environmental pressures and costs from process emissions whether they be gaseous or solid eg slag will ultimately generate a compelling case for feeding cleaner materials into steelmaking processes.

Considering current market conditions, what are the main challenges to successfully develop a new project?

Mining SANeil Meadows: Probably the size of the projects being contemplated at the moment would be the biggest challenge.  We believe that there will be little appetite in the foreseeable future for projects costing several billion dollars as the risk profiles of such large projects are considered too high now.  We aim to generate belief that the Mt Woods project is of a sufficient size that it can be effectively managed through the construction phase, commissioned systematically and then operated consistently producing consistent revenue streams and product outflow.

As always, the availability of existing infrastructure is also very important but probably more so now than a few years ago.

IMX Resources has supported many projects within the community. Why is it important as a miner to engage with local communities?

 Neil Meadows: If the tide of public opinion is not with you then you are in for a long hard struggle to get a project of the ground or later on get any support for not only operating but importantly any changes that you may want to make.  Any change of scale or essentially any change of significance to an existing operation must be approved by external bodies who listen to community concerns. So even if you have successfully built a project if you lose the faith of the community within which you are working during the operating phase of a development it may limit your ability to make significant changes such as increasing production or extend the life of a project.

Besides all of that however, and given some of the operating roles that I have had in the last ten or more years where I have experienced this, it’s actually more gratifying to be part of the community than being an outsider so I am always an advocate of getting involved as much as your organisation and resources allow you too.

Considering the current state of the resource sector in SA, what kind of discussions would you like to have with the industry peers at the conference?

 Neil Meadows: I would simply like to stay in touch with the peers who I already know and meet others that I am yet to meet.  Not living in South Australia puts me at somewhat of a disadvantage so it is important for me to take every opportunity that I get to have such contact.  It will also be a good way to keep up with the developments being contemplated or completed by other companies and the South Australian government in the region.

*Neil Meadows will be speaking in detail about IMX Resources’ successful diversified development and exploration projects at the 7th Annual Mining South Australia conference to be held on the 26th & 27th November 2013.

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