Indo Mines updates Indonesian iron project
Friday, July 29 2011 - 04:13 AM WIB
Jogjakarta Iron Project
In line with the Company?s strategy to become the supplier of choice to the growing Indonesian and Asian Steel and Metals Industry, the planned staged development of the Jogjakarta Iron Project continued to take shape during the quarter with the Company continuing to progress the Feasibility Study for the 2 million tonne per annum iron concentrate facility.
The Company is currently completing the process and engineering design required to finalize the Feasibility Study, which is anticipated for completion in mid August 2011.
The Company has also progressed the development of a commercial trial plant at the western end of the Contract of Works area. This plant will target production of 20,000 tonnes per month, of iron concentrate. Plant and equipment had been sourced and is currently being refurbished in country. Significant enquiries for trial volumes have been received from international steel makers.
This activity will allow the Company to generate modest early cash flow from the Iron Project while also building its operating expertise ahead of full-scale production of the 2 million tonne facility.
Concurrently, the Company is continuing negotiations with a number of potential long-term customers to secure off-take arrangements for the full-scale production of iron concentrate.
As part of the separate Pig Iron Feasibility Study, sample iron concentrate from the Company?s existing pilot plant facility at the Jogjakarta Project has arrived at the Outotec Ausmelt pilot smelting furnace in Dandenong, Victoria, to enable Outotec to complete a series of smelting trials using Direct Reduced Iron (DRI) produced from the iron concentrate to quantify the potential of producing 1 million tonnes? of pig iron a year based on the Outotec Circosmelt@ process. The results will enable the preparation of a conceptual plant design and capital estimates.
Discussions continued to progress with the leading Japanese Trading House Mitsui to explore the future development of the pig iron facility at the Iron Project.
Also during the quarter, the Company signed a Memorandum of Understanding (?MoU?) with a privately owned Indonesian group, PT Berat Anugerah Tama Sejati (?PT BATS?), that has access to a number of iron sands holdings and other mineral projects in the east of Indonesia, particularly the Halmahera region.
Prior to signing the MoU, the Company completed an initial high level field evaluation programme of an area prospective for iron sands in Halmahera and based on this initial work it will seek to complete a more detailed evaluation of the geology, environmental and social aspects of the prospective area.
Subject to a commercial arrangement being finalized between the Company and PT BATS and the findings of a more detailed exploration programme covering the area of interest, Indo Mines will seek to develop this project in parallel with the Jogjakarta Iron Project to enable additional early cash flows from iron concentrate production. (end of excerpt)