2.7
|
Heavy Minerals
Exxaro’s Heavy Minerals interests comprise a 100% interest in Ticor, Ticor SA and Ticor Smelter. Exxaro has an option to acquire 100% of Namakwa Sands and Ticor SA has an option to acquire 100% of the Toliara Sands Project.
2.7.1 |
Hillendale Mine
Ticor SA currently operates the Hillendale Mine, 20km southwest of Richards Bay, where mining of heavy mineral sands is undertaken. Initial processing of the heavy mineral sands ore is performed in the Primary Wet Plant (“PWP”) located at Hillendale Mine. The Heavy Mineral Concentrate (“HMC”) is transported by 35t road trucks to the Central Processing Complex (“CPC”) in Empangeni, some 20km west of Richard’s Bay, where the HMC is treated in the Mineral Separation Plant (“MSP”). Final zircon and rutile products are exported from the MSP via Richards Bay harbour. The crude ilmenite product from the MSP is used as feedstock for the Ticor Smelter smelters at the CPC, where
TiO2 slag and low manganese pig iron are
produced. Saleable products include: ilmenite; chlorinatable TiO2 slag; sulphatable TiO2
slag; zircon; rutile
and low manganese pig iron.
Exploration in these areas dates from the 1980s and, following the acquisition of the KwaZulu-Natal properties from Shell South Africa (Proprietary) Limited and Rhoex Limited in the 1990s, a feasibility study for the combined Iscor Heavy Minerals (“IHM”) project commenced in 1995 and was completed in June 1996. This feasibility study formed the basis of a detailed engineering and design phase, commencing in November 1996, to which further technical adjustments were made during 1998, to improve the overall economics of the assets. Preliminary site construction at the Hillendale Mine and the CPC commenced in 1998, however, the Mittal Steel (formerly Iscor) board decided to delay the development of the IHM Project due to adverse market conditions and high interest rates. Following further technical improvements and optimisation studies the Mittal Steel board approved the implementation of the IHM project in March 2000. During April 2001 the mining of heavy minerals sands at the Hillendale Mine site commenced and the PWP was commissioned (refer to Table 2.47).
|
Table 2.47 Hillendale Mine: Historical Production
|
| Statistics |
Units |
2001(C) |
2002(C) |
2003(C) |
2004(C) |
2005(C) |
| Production Statistics |
|
|
|
|
|
|
| Tonnage Mined |
(kt) |
3,428 |
7,279 |
8,512 |
9,307 |
8,356 |
(C) Calendar Year ended 31 December.
| Table 2.48 Hillendale Mine:
Current Infrastructure |
| Type |
Infrastructure |
Detail |
| Mine Access |
Hillendale Main Open Pit |
Medium life asset with current operating capacity of
833ktpm or 9.99Mtpa RoM.
Production from Hillendale is currently planned until early
2011; this implies a remaining life of 5.5 years.
|
| Process Facilities |
Hillendale PWP |
Long life asset with operating capacity to produce 73ktpm
of HMC per month or 876ktpa of HMC. The PWP
throughput rate is 1,200tph or 816ktpm RoM feed. The
PWP is planned to be transferred to Block P area after
processing at Hillendale is completed. |
| Tailings Facilities |
Hillendale Residue Dam |
MMedium life asset with operating capacity of 155ktpm of
slimes or 1.86Mtpa of slimes. Hillendale mining operation
is currently constrained by the Residue Dam settling
capacity.
Hillendale Residue Dam has an active area of 130Ha.
|
| MSP |
Empangeni |
Long life asset MSP servicing Ticor SA mines and projects
(Hillendale, Fairbreeze Project and Block P).
MSP design capacity is 105tph of HMC feed.
|
| Smelter |
Ticor Smelter |
Long life assets (two smelters) servicingTicor SA mines
and projects (Hillendale, Fairbreeze Project and Block P)
and Toliara Sands project, Madagascar. |
Table 2.48 above provides summary details of the current infrastructure servicing Hillendale Mine, type of operation and projected life.
Table 2.49 provides a summary of the principal operating statistics for the years 2001 to 2006. Cash cost expenditure statistics are available from 2003 onwards.
|
Table 2.49 Hillendale Mine: Historical Operating Statistics
|
| Statistics |
|
Units |
2001(C) |
2002(C) |
2003(C) |
2004(C) |
2005(C) |
2006(C) |
| Production Statistics |
|
|
|
|
|
|
|
|
| Tonnage Mined |
|
(kt) |
3,428 |
7,279 |
8,512 |
9,307 |
8,356 |
7,676 |
| HMC |
|
(kt) |
335 |
726 |
817 |
655 |
581 |
468 |
| Slimes Mined |
|
(kt) |
334 |
1,007 |
1,160 |
1,744 |
1,827 |
2,028 |
| Ilmenite |
|
(kt) |
208 |
454 |
458 |
460 |
373 |
353 |
| Zircon |
|
(kt) |
18 |
55 |
51 |
49 |
46 |
47 |
| Rutile |
|
(kt) |
7 |
23 |
18 |
20 |
24 |
21 |
| Pig iron |
|
(kt) |
|
|
36 |
75 |
105 |
75 |
| Grades Recovered/Mined |
|
|
|
|
|
|
|
|
| Heavy Minerals |
% |
of ore tonnes |
9.80% |
10.00% |
9.60% |
7.00% |
4.90% |
5.00% |
| Slimes |
% |
of ore tonnes |
9.70% |
13.80% |
13.60% |
18.70% |
20.50% |
26.42% |
| Ilmenite |
|
% of HMC |
62.00% |
62.40% |
56.00% |
70.20% |
68.00% |
61.00% |
| Zircon |
|
% of HMC |
5.30% |
7.60% |
6.20% |
7.50% |
8.80% |
8.70% |
| Rutile |
|
% of HMC |
2.20% |
3.10% |
2.20% |
3.10% |
3.90% |
3.20% |
| Products and Feed Rates |
|
|
|
|
|
|
|
|
| HMC Feed tonnage to MSP |
|
(kt) |
427.7 |
705.1 |
819.0 |
710.1 |
546.7 |
647.0 |
| Ilmenite Crude |
|
(kt) |
212.5 |
453.7 |
457.3 |
459.4 |
373.2 |
339.0 |
| Ilmenite Uric |
|
(kt) |
39.3 |
35.9 |
96.9 |
118.8 |
318.6 |
214.9 |
| Ilmenite Roaster |
|
(kt) |
|
10.7 |
79.4 |
145.1 |
36.8 |
137.4 |
| Ilmenite Feed to Smelter |
|
(kt) |
|
|
112.8 |
211.1 |
298.3 |
318.0 |
| Total |
|
(kt) |
679.5 |
1,205.4 |
1,565.4 |
1,644.5 |
1,573.6 |
1,656.3 |
(C) Calendar Year ended 31 December.
|
2.7.2 | Fairbreeze Project
The proposed Fairbreeze Project Mine is located 45km southwest of Richards Bay in the KwaZulu-Natal Province of South Africa. Fairbreeze Project is 47km by road from the CPC at Empangeni and 24km by road from the Hillendale Mine. A feasibility study was completed by Ticor SA during June 2005 on the Fairbreeze Project. During July 2005 the decision was taken by Ticor SA that owner operator mining would be used instead of using the services of a mining contractor. The Fairbreeze Project Mine will be required to supplement the HMC produced by the Hillendale Mine, to enable the MSP to operate at its design capacity of 105t HMC per hour. Access to the Fairbreeze Project will be via a new interchange directly from the KwaZulu-Natal N2 highway, which runs adjacent to the west of the deposits.
Fairbreeze Project was approved as the second mine to be developed in the original IHM feasibility study for the Ticor SA mineral sands operation. Original commissioning time for Fairbreeze Project was set at October 2003. Due to delays in the commissioning of the smelter at the CPC in Empangeni a large crude ilmenite stockpile inventory was created. As a result of this readily available stockpile construction of the Fairbreeze Project Mine was delayed by Kumba and Ticor.
Construction at the Fairbreeze Project Mine is expected to start in March 2006 with commissioning planned for July 2008. The proposed Fairbreeze Project Mine will consist of a hydraulic mining operation, a PWP and a residue disposal facility or slimes dam. The HMC will be transported by road to the CPC at Empangeni for processing in the MSP. Reject material from the MSP at the CPC will be transported back to the mine for blending and disposal with the sand tailings from the PWP. The Fairbreeze Project Mine PWP will have a capacity of 600tph of RoM feed.
A 9,000t bulk sample from the Fairbreeze Project C deposit was processed as part of the research conducted for the feasibility study. Pilot plant test work for the Fairbreeze Project deposit has also been completed.
The four separate orebodies that are available for mining are the Fairbreeze Project A, B, C and C Extension deposits. The Fairbreeze Project C and Fairbreeze Project C Extension orebodies have the highest total heavy mineral grades and will be mined first. The anticipated mine life for the C and C Extension orebodies is 10 years. The feasibility study predominantly focused on the Fairbreeze Project C and C Extension orebodies. In the future a separate feasibility study will be carried out for the potential mining of the Fairbreeze Project A and B deposits. The Fairbreeze Project C and C Extension deposits have a higher total heavy mineral grade and higher silt than the Hillendale deposit. In general the Fairbreeze Project deposits have good zircon grades, which will increase co-product sales.
Water for the Fairbreeze Project will be supplied by the Mhlathuze Water commission from the Mhlathuze River. Eskom will supply a 20MVA line to the Fairbreeze Project C Extension area, to the south west of the town of Mtunzini.
|
2.7.3 | Toliara Sands Project
The Toliara Sands Project comprises the Ranobe heavy mineral deposit located 35km north of Toliara in southwest Madagascar and the Manombo – Monombe exploration tenements located to the north of Ranobe. Ticor SA has an option to acquire 100% of the Toliara Sands Project.
|
2.7.4 | Tiwest JV
The current Tiwest JV operations comprise the mines at Cooljarloo near Cataby, approximately 170km north of Perth, the dry separation plant at Chandala near Muchea, approximately 70km north of Perth, and the port facilities and pigment plant at Kwinana approximately 40km south of Perth.
|
Table 2.50 Tiwest JV: Historical Operating Statistics
|
| Statistics |
Units |
2001(C) |
2002(C) |
2003(C) |
2004(C) |
2005(C) |
2006(C) |
| Production Statistics |
|
|
|
|
|
|
|
| Cooljarloo North |
(kt) |
5,358 |
2,960 |
5,735 |
5,790 |
5,394 |
6,229 |
| Cooljarloo South |
(kt) |
15,096 |
14,326 |
14,301 |
15,814 |
18,650 |
19,375 |
| Total |
(kt) |
20,454 |
17,286 |
20,091 |
21,604 |
24,044 |
25,604 |
| Products |
|
|
|
|
|
|
|
| Ilmenite |
(kt) |
437 |
438 |
433 |
472 |
442 |
478 |
| Zircon |
(kt) |
81 |
78 |
80 |
76 |
70 |
76 |
| Rutile |
(kt) |
28 |
34 |
34 |
35 |
32 |
30 |
| Leucoxene |
(kt) |
14 |
23 |
31 |
21 |
24 |
18 |
| Total |
(kt) |
560 |
573 |
578 |
604 |
568 |
602 |
(C) Calendar Year ended 31 December.
|
2.7.5 | Namakwa Sands
The location of the mine site is 500km from Cape Town on the West Coast at Brand-se-Baai with the nearest towns Koekenaap, Lutzville and Vredendal. The mine is divided in an East and West section each with a PCP. The MSP is 50km from the mining site on the way to Vredendal. The Smelter is located 300km further on the way to Cape Town on the coast at Port of Saldana. The products are dispatched from the port.
Namakwa Sands was founded in 1994. The project was initiated in two phases at a total nominal cost of ZAR2.1 billion. At full capacity, 17Mtpa of ore is mined to produce 200ktpa of titania slag, 120ktpa of pig iron, 25ktpa of rutile and 125ktpa of zircon. Namakwa Sands forms part of the Base Metals Division of Anglo American Plc.
Further details on Namakwa Sands will be filed in a Circular to Shareholders later this year should Exxaro decide to exercise the option to acquire Namakwa Sands.
|
2.7.6 | MRNL
MRNL is a junior Australian exploration company, which discovered heavy mineral deposits north of the town of Toliara is south-west Madagascar, extending some 150km north to Morombe. There are two lease areas, Ranobe and Manombo – Marombe, together designated the Toliara Sands Project.
An option agreement with MRNL covering the Toliara Sands Project was signed in November 2003. At the same time a back-to-back agreement was signed giving Exxaro a 100% stake in the project together with a commitment to provide 100% of the funding.
An option fee of USD2m has been paid, giving Exxaro exclusive rights to the Toliara Sands Project. Exxaro will fund exploration and feasibility studies. On exercise of the option MRNL will be paid approximately 30% of the project NPV, a proportion of the NPV at the time of financing and the balance at commissioning.
|
2.7.7 | Exploration Potential
Exxaro has seven heavy minerals exploration projects in various development stages as indicated in Table 2.51.
| Table 2.51 Heavy Minerals Exploration Properties: Development Stages
|
| Exploration Project |
Development Stage |
|
Manombe – Morombe |
Some exploration work has been done on the M-M Project. It has no classified mineral resource and is deemed to be an
Exploration Area. |
|
Letsitele Project |
Significant exploration work has been undertaken and the mineralisation is well-understood. It is deemed an
Advanced Exploration Area. |
| Gravelotte Project |
Significant exploration work has been undertaken, the mineralisation is wellunderstood
and it can be classified in the Measured and Indicated categories. It is
deemed an Pre-Development Project. |
| Port Durnford Project |
Significant drilling is planned to allow estimation of classifiable resources. Port
Durnford is deemed an Exploration Area. |
| Fairbreeze Project
Blocks A, B and D |
Significant exploration work has been undertaken at Fairbreeze Project and
significant mineralisation in the Measured and Indicated categories has been
classified. Fairbreeze Project Blocks A, B and D are deemed to form a
Pre-Development Project. |
| Kentani Project |
Significant exploration work has been undertaken and the mineralisation is well
understood and classified into the Measured category. Kentani is deemed an
Advanced Exploration Area. |
Tables 2.52 to 2.57 provide summary details of the heavy minerals projects.
|
Table 2.52 Exploration, Heavy Minerals: Manombe – Morombe Exploration Project
|
| Location |
60 – 140 km North of Toliara port in south-west Madagascar |
| Ownership |
Exxaro (100%) has exclusive rights to an option to acquire the project |
| Total Area |
2,370km2 |
| Exploration Completed |
ZAR1.62m |
| Planned Exploration |
ZAR1.32m |
| Mineralisation
|
Low trash, heavy mineral suite dominated by ilmenite and zircon |
| Potential
|
Limited work on the Manombe – Morombe property indicates further potential for economic heavy mineral sand deposits. The focus of work to date has been almost exclusively on the neighbouring Ranobe deposit |
| Table 2.53 Exploration, Heavy Minerals: Letsitele Project |
|
| Location |
23°55’S, 30°23’E. 4 km south of town of Letsitele, Limpopo Province,
South Africa. Local infrastructure is fairly good |
| Ownership |
Mineral title held 100% by Exxaro. Pending application for prospecting
right |
| Total Area |
|
| Exploration Completed |
ZAR1.0m |
Estimate |
| Planned Exploration |
ZAR0.53m |
Years 1 and 2 |
| Mineralisation(1) |
See Mineral Resources |
V-Ti-magnetite rock mineralisation rich in ilmenite. |
| Potential |
The Letsitele project’s potential is reasonably well-known, and
resource evaluation is planned for the next two years |
| Table 2.54 Exploration, Heavy Minerals: Gravelotte Project |
| Location |
8 km north of town of Gravelotte, Mpumalanga Province, South
Africa. Local infrastructure is fairly good |
| Ownership |
Mineral title held 100% by Exxaro |
| Total Area |
6,888.83Ha |
|
|
| Exploration Completed |
ZAR1m |
Estimate |
| Planned Exploration |
Mineralisation |
|
| Mineralisation |
See Mineral Resources |
Ilmenite-rich sand and V-Ti-magnetite
mineralisation with basal pebble layer |
| Mineral Resources and Reserves(1) |
Measured and Inferred |
Grades |
| |
218.7Mt |
4.71% – 10.71% THM2 |
| |
|
4.0% – 9.1% ilmenite |
| Potential |
The Gravelotte project’s potential is well-defined |
| Table 2.55 Exploration, Heavy Minerals:
Port Durnford Project |
| Location |
South of the Hillendale mine, near Richards Bay in South Africa |
| Ownership |
Ticor South Africa (KZN) (51%) and Imbizu Mineral Holdings (49%)
have a prospecting right to this area |
| Total Area |
3,946Ha |
| Exploration Completed |
ZAR1m |
Estimate |
| Planned Exploration |
Drilling of approximately 10,000m will commence in February 2006 at
a cost of ZAR4.6m |
| Mineralisation |
Heavy Minerals suite of ilmenite, zircon and rutile |
| Mineral Resources and Reserves |
None classified |
| Potential |
A large low grade deposit |
| Table 2.56 Exploration, Heavy Minerals: Fairbreeze
Project Blocks A, B and D
|
| Location |
45 km southwest of Richards Bay, KwaZulu-Natal Province,
South Africa.
The project is located close to the Ticor CPC and local infrastructure is
very good |
| Ownership |
|
100% by Kumba. |
Pending application for conversion of mining rights |
| Exploration Completed |
|
ZAR1.7m(1) |
Geological surveys, reconnaissance auger drilling and RC drilling for
resource definition |
| Planned Exploration |
|
R250k |
Geology and Resource modelling |
| Mineralisation |
|
Three heavy mineral sands deposits. |
| Mineral Resources(2) |
|
Measured |
Indicated |
|
Area A |
139.8Mt at 2.83% Ilmenite |
|
|
Area B |
|
26.9Mt at 2.45% Ilmenite |
|
Area D |
|
9.2Mt at 2.51% Ilmenite |
|
Total |
139.8Mt at 2.83% Ilmenite |
36.1Mt at 2.47% Ilmenite |
| Potential |
|
The Fairbreeze Project hosts small to large heavy mineral sands deposits |
|
Table 2.57 Exploration, Heavy Minerals: Kentani Project
|
| Location
|
32°36’S, 28°30’E. Just north of of the Kei River mouth, 65 km southeast of Butterworth, Eastern Cape Province, South Africa. Local infrastructure is fairly good |
| Ownership |
100% by Exxaro. Valid prospecting right |
| Total Area |
|
Mineral title |
| Exploration Completed |
ZAR3.0m |
Explored since 1970s. Drilling during
1980s, intensively in places. Estimated
costs |
| Planned Exploration |
ZAR7.2m |
Years 1 and 2 |
| Mineral Resources(1) |
Measured |
|
| |
232.9Mt at 4.5% ilmenite |
|
| Mineralisation |
Four heavy mineral sands deposits |
|
Potential
|
The Kentani project hosts medium to large heavy mineral sands deposits which are scheduled for resource evaluation drilling |
|
|
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