Indo Mines completes test work for export quality at Kulon Progo iron project
Tuesday, January 31 2017 - 09:02 AM WIB
ASX-listed Indo Mines Ltd said that a quantitative testing program has undergone in Indonesia with PT Geoservices, seen as a critical to confirm the scale of a planned iron making facility at Kulon Progo, in Yogyakarta, to produce pig iron and vanadium by-product.
Indo Mines said in a statement on Tuesday that the quantitative test work will allow the company to confirm calculations from the Basic Engineering Design on actual operating costs with a relative level of comfort.
There were four tests under the program;
1. Produce an export grade quality concentrate with an iron (Fe) content of 56.5-57.5 percent, confirm particle sizing and gangue content
2. Produce a smelter grade product of 58.5 percent Fe, confirm particle sizing and gangue
3. Test work on gravels for Fe yields
4. Run a pelletisation program for the smelter grade product using Indo Mines new bench pelletising unit
?Tests 1 and 2 have been completed with samples delivered to potential off-takers. From a technical aspect, the particle sizing of the export test product indicated the concentrate will not have to be ground as fine as initially considered, to the point where one stage grinding may be sufficient to produce the required Fe level,? Indo Mines said in the statement.
The company said test 3 is currently under review, but results are in line with the expectations of Indo Mines technical teams and will be included for independent review by a JORC competent person when assessing the Kulon Progo iron sand resource conversion to reserves.
Test 4 has been put on hold for the time being ? but preliminary pelletising has been completed using bentonite and coal. Pellets were successfully produced, but the bench scale program needs to confirm scalability of these results.
Elsewhere, Indo Mines said its CEO Arran Marshall recently met again with potential off-takers in China and EPC contractors ? taking into consideration plant capacity of 1.6Mt per annum (export grade), Indo Mines would have no issue in placing off-take in China based on the competitive pricing negotiated.
The company said samples produced recently from PT Geoservices were offered to potential off-takers and results of their analysis should be available to the company proceeding Chinese New Year celebrations. But generally there were no issues with the export grade Indo Mines proposed to the potential off-takers, or particle size distribution.
Two potential off-takers have their own fleet of bulk carriers and offered the opportunity to work together in shipping and distribution ? this scenario is ideal for Indo Mines as it manages the issue of providing CFR based contracts to buyers. One issue that Indo Mines will have to manage is the vessel size available for export. Utilising the Cilicap port facility means a maximum draft size of 40,000 DWT can be used for export ? further analysis of transshipment options may have to be considered to provide the company with economy of scale shipping options.
Indo Mines said over the past month request for quotes have been sent to equipment suppliers around the region and locally. Quotes have come in relatively in line with expectations as the equipment is well known to the company and is not considered specialist.
Indo Mines through its 70 percent-owned Indonesian subsidiary PT Jogja Mangasa Iron is planning to develop the Kulon Progo iron plant project.
Editing by Reiner Simanjuntak