high phosphorus cazaly shovelanna
Many investors would be familiar with the Cazaly Resources situation and their battle with Rio over ownership of the 140 million tonne Shovelanna deposit. (See interesting comment below from CAZ about high phosphorus issues at Shovelanna. )
CAZ market cap when to $200 million prior to...and likely would have gone much higher if the WA Government had granted them Shovelanna. CAZ suggested they would make about $75 million PA surplus cash....following the signing of a deal with BHP ie subsequent to this 11 th November release here.
On evidence we have here....UKD may have deposits (sure - also high phosphorus brockman) but in quantities way in excess of Shovelanna.
______________________________________________ Page 1 ASX Release 11 November 2005 CAZALY FINALISES SCOPING STUDY OF DEVELOPMENT PLAN FOR SHOVELANNA IRON ORE Page 5
- 5 - Previous Issues Relating to Phosphorus Levels A submission by the previous tenement holder in 1992 stated that tenement development had been suspended, as the phosphorus (“P”) chemistry (0.136% P) was not acceptable to potential buyers. Regarding this the Company makes the following observations: BHPB is mining the adjacent Orebody 18 (to within 300 m of the tenement’s southern boundary) and this deposit has a reported P level of 0.07% P. Orebody 18 iron ore is currently being marketed and sold; Previous test results are questionable based on changes to sample collection and analysis techniques; Higher P levels are now acceptable to iron ore consumers;In general, it is observable that major Pilbara suppliers are trending towards high P blends as lower P materials are depleted; and Cazaly notes that mineralisation generally pays little regard to arbitrary tenementboundaries. Early discussions with potential customers indicate that the Project’s ore chemistry and in particular the contaminant levels of silica (SiO2), alumina (Al2O3) and P are acceptable. Based upon the previous work and initial work by the Company on the Exploration Licence, it isconsidered that there is a potential resource that will support a mining operation. Market The significant changes in market dynamics over the last two to three years have resulted in: a structural change in the iron ore industry being transformed from a low growth supply dictated market into a medium growth, demand led industry; and a marked decrease in the remaining tonnage of low P ores in the Pilbara. _______________________________________________
Some more info about high phosphorus iron ore: (story from Feb this year)
With a booming iron-ore market and diminishing stocks of high-grade ore, Australian researchers are investigating technologies to ensure cost-effective production of alternative ores. The role of research Processing challenges Treating fine ores High phosphorus ore High phosphorus ores
Another serious problem is the phosphorus content of Australian iron ores.
'There are huge deposits of high-phosphorus Brockman ore in Western Australia that are close to existing infrastructure; however the high phosphorus levels make them more difficult to sell except in boom times,' says Dr Holmes.
Physical separation processes can remove some of the phosphorus, but substantial iron is lost in the process. Alternative approaches, such as heat treatment and leaching, are currently considered uneconomic, with the best option being to remove the phosphorus at the hot metal stage. This pushes the cost of removal onto the customer, although iron ore prices can be adjusted to take account of the additional process step.
Potential value Although Australia’s new iron ore resources create challenges, they also generate huge potential. Exploitation of the high phosphorus iron ore deposits in the Pilbara is a major prize.
Dr Holmes says, 'At current iron ore prices of about A$50 per tonne, the export value of these deposits alone is of the order A$350 billion. On a similar basis, unlocking Australia's largely untapped magnetite resources and production of iron ore pellets for export would potentially generate export revenue of about A$230 billion.'
Primary Contact Dr Ralph Holmes (BSc PhD FAusIMM FAIP) Manager CSIRO Minerals Iron Ore Processing Phone: 61 7 3327 4452 Alt Phone: 61 7 3327 4444 Fax: 61 7 3327 4682 Email: [email protected] Related AreasCSIRO Minerals Minerals Down Under: collaborative research in the minerals industry Related TopicsImproving mineral beneficiation Increasing the value of Australian iron ore Contact Miss Meg Rive (BSc (Hons I) LLB) Communication Manager CSIRO Minerals Phone: 61 3 9545 8614 Fax: 61 3 9562 8919 Email: [email protected]
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