Iron ore prices too low... so, add value

CIM Montreal 2015
Francis MacKenzie (North Atlantic Iron Corporation), Kevin Kemper (North Atlantic Iron Corporation)
The partners in North Atlantic Iron Corporation (NAIC) have spent the past five years understanding how to take various grades of iron ore, including those with impurities, and create the basis for making a high purity pig iron. This research effort cost more than $15 million and started with their ironsands resource in Happy Valley-Goose Bay, NL. The journey to find a method to use the ironsands led to some powerful conclusions – namely, to make the chemistry of the ironsands useful. For this, a process to separate the TiO2 from the magnetite had to be proven – high-heat became part of the solution; this meant a liquid stream of iron would be created and thus pig iron. The development efforts consistently indicated that pig iron (used by the electric arc furnace steel mills) is not linked to the price of iron pore – it follows the price of scrap. This became the premise for establishing a technical process that could take low grade iron ore (our Labrador iron ore is 52% Fe with 9-11% TiO2) with other low cost inputs. The concept study for the ironsands indicated that cost to mine and beneficiation a tonne of concentrate could be done for approximately $30/tonne. As the project principals await the construction of the Lower Churchill hydro dam for their need for 130 MW of power, they decided the window for building a pig iron plant elsewhere was open. North America imports 3-5 million tonnes per annum of pig iron, primarily from Brazil, Russia, and Ukraine. The goal for NAIC was to build a business model, obviously supported by the technical melting case at their 1 MW smelter in Pennsylvania, that sought to mix the benefits of using low cost iron ore inputs, low cost thermal coal, low cost electricity and if possible low cost natural gas (for the pre-reduction process) – all blended to produce a low cost, high purity pig iron. A product that was not at the mercy of downward iron ore price fluctuations. Instead of iron ore being the primary product, the value-add model is based on using iron ore only as a raw material. This model has demonstrated that while iron ore prices have been reduced substantially in 2014, the prices of pig iron have held. This presentation will reflect upon the measures taken to ensure NAIC’s business case states the basis for being a low cost producer globally. It will also address why “adding value” to the ironsands of Labrador became the basis to monetize the value of their mineral sands. Additionally, project partners will share the findings from their efforts to better understand the valuable minerals contained within the minerals sands of Labrador, and an update for advancing the resource towards production.
Keywords: NAIC, pig iron, Iron Ore, low cost
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