Hi, I am Andrew Brown, an expert in Fixed Asset Management, specialised in corporate strategy, operational technology, innovation and change management.
How does magnetite ore compared to a hematite deposit compare from a business case perspective?
Below are some key notes I would like to share with you based on my experience gathered to date through countless projects reviewed, prepared, assessed and operated. Please reach out if you require further support in this field.
A bit of background to magnetite iron ore
Processing magnetite ore is capital and energy intensive, significantly more so than direct shipping hematite (DSO). However, high-grade magnetite concentrate (65-70% Fe) commands a premium price, particularly for low emission steelmaking, making beneficiation economically viable when managed efficiently.
Establishing and optimising the key process flowsheet characteristics associated with the ore mineralogy is a critical part of the initial design feasibility characteristics requiring significant laboratory testing and pilot scale operations.
High grade Magnetite (67%+ Fe) requires fine grinding and beneficiation, making processing higher capital and energy intensive than hematite. The overall processing footprint of a magnetite facility is 4 x larger than an equivalent hematite feed.
The process demands consideration of primary crushing and dry magnetic separation prior to secondary processing of the primary concentrate. Subsequent hi-intensity magnetic separation is a core technology, and has been employed along with grinding HPGR’s, further Fine-Grinding Mills, and complex unit operation separation such as Air flotation, Lyons feed slimes control units (LFCU), screening and thickening to enhance processing performance. Understanding the critical flowsheet components and the complex recirculation loads necessary to achieve the concentrate grade targets and remove impurities, is critical to overall operational efficiencies for magnetite beneficiation.
Estimated CapEx for magnetite projects: $500M – $2B USD
A Specialist Service by LARM Consulting
Magnetite projects, depending on deposit size, location and processing complexity have significantly higher capital intensity than traditional hematite DSO operations. Projects of smaller size have historically proven difficult to be economically feasible unless they are treated as a subproduct, even with proven premium quality product.
As illustrated in the chart below, to determine an order of magnitude of capital intensity without running a full estimate, projects can be allocated in two distinct groups. Firstly, the mega projects with a resource over 2 billion tonnes averaging a capital intensity of just under A$1/t with strong correlation to deposit size. Secondly, and also the less dependent on resource size, are projects with deposits around 0.5 billion tonnes with an average of A$6/t.
The capital outlay is generally split with a higher proportion on the processing components due to grinding infrastructure requirements, with indicative proportion to total capital expenditure ranging as per table below:
Estimated operational expenditure (OpEx) for magnetite concentrate production at an average of 70 percent iron content is primarily driven by the grinding requirements. For every 12 µm higher P80 the OpEx is on average 5% lower, and interestingly in our experience, the scale of the operation has a lower incidence on the processing unit cost compared to other commodities.
For a magnetite operation, the table below illustrates an indicative average range for OpEx allocation per activity, showcasing the importance of the geo-metallurgical properties compared to other modifying factors.
Achieving Optimal Processing Considerations with LARM
Compilation of an overall Magnetite Beneficiation Cost Model estimate based off a preliminary operations audit and initial process flow design relevant to initial ore body testing. This requires a structured approach:
1. Determining the Ore characteristics Optimal particle size distribution
Audit of the Ore Characteristics, expected strip ratios, ore quality factors will identify gaps between initial proposed and optimal conditions.
2. Determining Site location access to critical infrastructure characteristics
Assess the location characteristics and risk factors associated with the preliminary design and feasibility.
3. Implementing Data-Driven Improvements
Based on the findings, develop a strategy to implement data driven optimisations connecting the mine site and the processing facility operations, reducing costs and enhancing processing efficiency.
LARM Consulting specialises in conducting Scoping Studies and Prefeasibility Studies for magnetite and hematite projects, with plentiful experience in assessing iron ore projects in WA and Africa. Please reach out for free consultation with myself or anyone within LARM.
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