Developing coal miners in the Waterberg are not the only players dependent on rail and water infrastructure to start mining and moving product, writes Laura Cornish.Fortunately, the schedule for iron ore and steel-driven company, Ferrum Crescent’s Moonlight project in the area fits in neatly with the proposed infrastructure upgrade and expansion time frame. The necessity for rail, water, energy and transmission infrastructure has been identified by the government’s National Development Plan as one of 18 strategic integrated projects (SIP 1) to “transform South Africa’s economic landscape” and unlock the northern mineral belt, the Waterberg region being the catalyst. South Africa’s future coal and energy demands are dependent on this project. Rail capacity – first and foremost It is a well-known fact that Lephalale’s Waterberg region will emerge as the next generation coal fields as Mpumalanga’s coal resources approach depletion. The reality is that this is less than 10 years away. Coal, however, is not the only mineral in the Waterberg region – platinum and iron ore are ‘hot’ minerals within the area – further driving the necessity for the approval and construction of the SIP 1 project. ASX/AIM/JSE-listed iron ore junior Ferrum Crescent is one such company keen to take its Moonlight magnetite iron ore Limpopo-based project up the value chain and into production. Strategically, its development path has been well thought out as it anticipates production start-up around the same time a number of new rail upgrades and expansions are completed and capacity constraints alleviated – scheduled for completion around 2018. The company is aiming to reach production start-up in 2018. “And this is no small project for a junior,” says Ferrum Crescent’s COO, Vernon Harvey. “We need to complete a bankable feasibility study (BFS) and raise capital – about US$1 billion (R9.09 billion) for the development of the entire project. A pelletising plant located at Thabazimbi is most suitable to our beneficiation needs, which will take about three years to complete. This means we need to start construction in 2015. If we achieve all our goals, our project will come on-stream around the time the necessary infrastructure is completed.” The current active line from Lephalale (solely used by Exxaro’s Grootegeluk coal mine [1.5 Mtpa]) joins Thabazimbi where approximately 2 Mtpa of iron ore is transported to Vanderbijlpark (about 2 Mtpa). “This entire system is due for upgrade by Transnet to cope with future coal demands from Waterberg. The first upgrade, in various phases, will expand the rail line’s capacity to 23 Mtpa. The Phase 2 upgrade will entail an entirely new heavy haul line from Thabazimbi to Ermelo, which starts at 40 Mtpa. We are banking on acquiring capacity for rail transport of the product to be exported through Richard’s Bay from Transnet as iron ore capacity becomes available on the existing line. There is currently some spare capacity on the existing line from Thabazimbi to Rustenburg and beyond,” explains Harvey. The Lothair/Swaziland rail line connection and upgrade will also take some capacity off the coal line to Richards Bay. The upgrades involve construction of bypassing loops and also electrification of line between Thabazimbi and Lephalale once Medupi power is available. The Richards Bay port is also being upgraded for additional iron ore capacity. The Moonlight project The Moonlight deposit (or farm) is not a new discovery, Harvey outlines. It was drilled by Iscor in the 1980’s and 1990’s and forms part of a larger property across two contiguous farms – Gouda Fontein and Julietta. Ferrum Crescent acquired its new order mining rights for all three farms in October 2012. “Between 2008 and 2011, we undertook an infill drilling programme on the Moonlight farm and determined Iscor’s historical data to be accurate,” says Harvey, who describes the project as a “unique” magnetite banded iron ore deposit containing material capable of producing a high quality metallurgical pellet feed concentrate.
Its JORC code-compliant resource, 308 Mt, has an average grade of 26.9% (16% cut-off) iron. It comprises a coarse grain product that can be easily upgraded – to about 70% iron content. Coupled with its low phosphorous, silica and alumina content, the opencast project becomes increasingly attractive. There are several mineral zones at or near surface with a low strip ratio that equates to low mining cost benefits. Based on beneficiated grades and quantities, the project has a minimum 20-year lifespan.Sidebar: The Moonlight mineral resource categories
- 172 Mt inferred at a grade of 25.3% iron
- 83 Mt indicated at a grade of 27.4% iron
- 52 Mt measured at a grade of 31.3% iron