Magnetite Mines Ltd (ASX:MGT) has taken material steps to reduce the cost of developing premium-grade iron concentrates suitable for the ‘green iron’ market, leveraging metallurgical test work to validate a seawater-based processing method.
Water supply is a key technical and economic factor for the company’s Razorback Iron Ore Project in South Australia, which will require large volumes to process its high-grade magnetite ore.
A breakthrough in MGT’s laboratory testing has demonstrated the potential to use mostly salt water to produce green iron-grade magnetite from an Iron Peak deposit ore sample, potentially materially reducing project costs.
Evaluating permitting and supply options
“The team at Magnetite Mines has made exciting progress in its metallurgical evaluation of saline water processing, consistently achieving DR-grade (direct reduced-grade) in our most recent test work,” Magnetite Mines CEO Tim Dobson said.
“This pioneering technical innovation creates optionality for MGT in providing the best water solution for the Razorback Project and is a powerful differentiator.
“With a technical solution now defined, we will move to evaluate other considerations for saline water processing including permitting and supply options.”
MGT produced iron concentrate grades of 69.9% in its latest test work, comfortably exceeding direct ore shipping (DSO) grades of 60% with less than 2.0% silica and alumina impurities.
Those specifications also meet the requirements for direct reduced iron (DRI) production, an alternate method of steel making that uses renewable energy sources like hydrogen, reducing emissions by up to 95%.
Reducing operational costs
Between a reduction in freshwater requirements and the elimination of the need for a large desalination plant, MGT believes its saltwater processing breakthrough has the potential to “significantly improve Razorback project economics”.
The company says minimal changes will be required to accommodate saltwater in the existing processing flow sheet and further testing will prove the validity of the metallurgical method across the Razorback deposits.
The breakthrough has positive implications for the other Braemar Iron Formation deposits and other magnetite projects generally, particularly in areas that lack access to fresh water.
Magnetite is therefore seeking legal advice to protect its intellectual property relating to this technique with a patent, which will protect MGT’s latent technical advantage and offer a potential income stream should the company choose to license it.