Efficient NZ steel mill could ship cheap steel to China, offshore ironsand explorer says

Sources: Trans-Tasman Resources and Lindsay Clark

Trans-Tasman says initial studies show the ultra low cost of mining the large offshore iron sands deposits it has discovered could make an integrated New Zealand steel mill the most competitive large scale steel making operation in the world.

The company has reported a discovery of an initial economically recoverable resource of about 1.2 billion tonnes of ironsands at 60% iron (Fe) content, mostly off the south Taranaki-Wanganui area.

An initial conceptual study shows that the potential exists to develop a 10 million tonnes a year steel mill to produce slabs and billets for export to Asia and China.

Such an integrated steel mill, producing valuable vanadium and titanium by-products as well as steel, would also generate significant revenues and employment opportunities in New Zealand, the company says.

According to Mr Berend, a large integrated steel mill in NZ would employ about 3,000 New Zealanders directly and as much as 15,000 indirectly.

The steel mill would use the titanomagnetite (TiFe) ironsands concentrates from Trans-Tasman as raw material, together with coking coal from New Zealand or from Australia.

Trans-Tasman’s technical director Paul Vermeulen said in a presentation to a Shanghai steel conference that the company had the potential to be a super low cost iron ore producer mainly because of the structural advantages of offshore dredging over onshore mining of iron ore using expensive railroads and ports.

The low capital costs of New Zealand ironsand mining would be dramatically lower than even the BHP and Rio Tinto low cost mines in the Pilbara, Western Australia.

Mr Vermeulen said Trans-Tasman estimates capital cost per tonne of capacity of an offshore New Zealand mine would be about US$14 a tonne compared with US$100 a tonne for the low cost BHP and Rio Tinto mines.

The big economic advantage for a New Zealand operation would be that no deep sea port or rail is required.

The main capital cost for most iron ore mining is the port which typically required US$45-60 a tonne of ore capacity.

Mr Vermeulen, who was formerly with Rio Tinto iron ore technical marketing, told the Shangai conference that coastal Chinese blast furnaces using 100 % TiFe low cost ore would have very strong cost advantages over traditional mills.

Recovery of vanadium and titanium oxide from the New Zealand ores would yield additional significant economic benefits for a steel mill using the TiFe concentrate as ore.

The country’s only steel mill, operated by New Zealand Steel at Glenbrook south of Auckland, uses local ironsand as ore and currently exports some 60 per cent of its production.

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