Cyclone Metals Ltd (ASX:CLE) has produced what it describes as “world-class” direct reduction (DR) iron ore pellets from the Iron Bear Project in Canada in the project’s pilot production run.
The company says its pellets achieved world-class specifications, grading 67.5% iron, 1.6% silica, 0.12% magnesium oxide, 0.65% calcium oxide and ultra-low deleterious elements.
The Iron Bear DR pellets have “excellent physical properties”, with a cold crushing strength (CCS) of 438-486 kilograms per pellet and “world-class reduction and metallisation properties” with a Linder score of 1.0% -3.15mm and an R180 metallisation of 99.1%.
Enabling low-carbon steel production
"We have successfully produced Direct Reduction Pellets. This is a major milestone for the Iron Bear project,” Cyclone Metals CEO Paul Berend said.
“Our DR pellets demonstrated excellent physical and metallisation properties, and we are on track to start shipping bulk samples to potential offtake clients as early as Q2 2025.
“Direct Reduction pellets are a key enabler to low carbon steel production and sell at a high premium to the 62% Fe benchmark.
“This premium is currently about US$63.5 tonne. The industry standard pelletising conversion cost is US$15 per tonne which implies a typical additional cash profit of about US$48.5 per tonne for DR pellets versus benchmark 62% Fe iron ore.”
With the pilot work complete, CLE will move to small-scale industrial production, beginning with 18 tonnes of run-of-mine sediment ready for processing at the Iron Bear pilot plant at COREM in Quebec City.
The company intends to produce iron bear DR concentrate grading 71% iron and 1.1% silica as well as DR pellets and Blast Furnace (BF) acid pellets.
DR iron a core green steel component
DR pellets are a vital element of green steel production, notably reducing the carbon inputs of steel manufacturing by minimising the need for coking coal and enabling the use of electric furnaces.
The high-grade nature of the material also enables direct reduction-based steel production, which uses natural gas or hydrogen as the main reductant, rather than coal.
Using green hydrogen from renewable sources, it is possible to make steel with a carbon footprint close to zero using DR pellets.
Demand for DR pellets from direct reduction-based steel producers is only growing as policy drives industry to reduce carbon emissions.
They’re also a cleaner and simpler form of iron to transport and handle, offering operational and efficiency benefits throughout the supply chain.
Cyclone expects to begin bulk shipping of Iron Bear samples to potential offtake clients in the Middle East and Europe by the third quarter of 2025, with the objective of securing commercial offtake agreements.
The first stage of developing the 16.6-billion-tonne at 29.3% iron resource will involve shipping bulk samples of DR and BF concentrates to steel mill clients in the first quarter of 2025, followed by DR and BF pellets in the second quarter.
Cyclone’s forward development plan is centred on establishing an asset-based joint venture agreement with a Tier-1 miner or steel producer to bring the project to Decision to Mine and provide the capital needed to complete development.