Hinda in the Republic of the Congo is WhyAfrica’s Pick Of The Week
The updated feasibility study of AIM listed Kropz’s Hinda phosphate project in the Republic of the Congo, demonstrates low technical mining risk and attractive project economics. Hinda in the Republic of the Congo is WhyAfrica’s Pick Of The Week.
Kropz appointed global engineering and construction company Hatch Africa in February last year to complete the updated feasibility study at Hinda.
According to a recent statement by the company the phased approach initially studied delivery of 1 million tonnes per annum (Mtpa) phosphate rock concentrate through the existing Port of Pointe-Noire (Phase 1), expanding to 2Mtpa product through a new port facility at Pointe Indienne (Phase 2).
Updated feasibility study
The phased approach was intended to reduce up-front execution capital requirements by making use of existing port facilities which limits the first phase to 1Mtpa product.
The updated feasibility study includes detailed engineering of the open pit mine, associated mine dewatering and surface water management, the beneficiation plant and all associated infrastructure, a tailings storage facilities and water storage dam, a gas-fired power plant and gas supply pipeline, a 30kV overhead line to support construction and early works, mine access roads, an accommodation camp and port infrastructure. Costs and schedules associated with procurement, construction management and commissioning are also included.
Hatch has delivered a robust execution strategy, which provides high confidence in achieving execution success. The beneficiation plant employs standard and proven technologies, and the design is based on extensive laboratory and pilot-scale test work completed between 2013 and 2016.
A mine plan was run, scheduling the immediate start of Phase 2 production, i.e. 2Mtpa product. This opportunity led to a conservative increase in ungeared NPV (at 11.1% discount rate) to USD543-million with an IRR of 20.96%. The estimated capital cost for the immediate start of Phase 2 is USD618-million, based on the study work completed. If this option is studied further, it should be possible to optimise both capital and operating costs further.
Opportunities also exist to enter into a long-term power purchase agreement with one of several companies already established in-country. The capital cost of a gas-fired power plant would be removed, although this would be offset by a potential increase in power costs.
Several other capital cost optimisation initiatives have been identified for investigation, ahead of detailed design.
Updated environmental social impact assessment (ESIA)
The project has a valid environmental compliance certificate issued in April 2020, valid for 25 years. As a result of the modifications to the project in the updated feasibility study, the ESIA has been updated to comply with local regulations. The updated ESIA has been conducted in parallel with the execution of the updated feasibility study and will be submitted to the Ministry of Environment in Q4 2021.
According to the study the mineral resource at Hinda is 201 million tonnes of measured mineral resource at 11.6% P2O5 and 381 million tonnes of indicated mineral resource at 9.8% P2O5.
The study delivers a 28-year life of mine (LOM), extracting 31 million tonnes of ore in Phase 1 and 214 million tonnes of ore in Phase 2. The estimated Phase 1 capital cost is USD355-million, and the Phase 2 capital cost USD310-million with a nominal, peak funding requirement of USD392-million, as the first phase supports the subsequent Phase 2 expansion capital expenditure.
Phase 1 operating cost on a free-on-board (FOB) basis of USD62.87/t product, and Phase 2 operating cost of USD69.51/t product, inclusive of mining royalties. On an estimated three-year execution schedule, first revenue is expected in 2025, assuming that the required funding is in place by June 2022.
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