“The undersupplied iron ore market segment”
- Premium Iron Ore Product
Testwork has shown that Colomi’s magnetite-rich ore can be upgraded to produce a premium iron ore concentrate product with Fe 66+%, moderate SiO2, and very low levels of alumina, phosphorus and other deleterious elements.
Colomi concentrate addresses three market segments:
- – Blast Furnace Pellet Feed – requiring high grade finely ground concentrate;
- – Sinter Plant Feed – as a high grade blending input to enhance sinter chemistry; and
- – Direct Reduced Iron Pellet Feed – requiring a very low gangue iron ore concentrate.
- Strong Demand, Tight Supply
The growing demand for imported high quality concentrate in China is driven by reduced production / closure of Chinese magnetite concentrate mines due to: depleted resources; falling grades; high costs; and environmental reasons, all leading to around 200Mtpa capacity being shut since 2012.
In addition, government environmental regulations favour pellet plants over sintering operations.
Increasing Chinese pellet production means a growing demand for pellet feed, particularly high grade concentrate.
Sinter fines are in plentiful supply but grades are declining and impurities are rising leading to a requirement for a high grade iron ore concentrate as a blend sweetener.
Market interest in Colomi magnetite concentrate is evidenced by the company signing >30 LOIs covering 50 Mtpa as at March 2018.
- Price Premium
Strong demand for high grade concentrate from a limited group of seaborne suppliers will support an ongoing price premium. The major iron ore producers are not positioned to address this growing market niche as they do not produce iron ore concentrate.
High grade magnetite concentrate, such as the Colomi product, commands a price premium of 10-30% over standard Fe 62% sinter fines due to quality and demand factors.