Ironveld Mining has agreed to form a joint venture (JV) with Pace, a mining and industrial supply chain solutions provider, to produce and sell dense media separation- (DMS-) grade magnetite from the former’s mine in Limpopo, South Africa.
Under the JV agreement, the duo will launch an equally-owned newly incorporated company, which will be named IPace.
Pace will be responsible for the funding of all necessary capital equipment and the establishment costs of a beneficiation plant, which will produce the DMS-grade magnetite.
Estimated to involve an initial cost of R35m (£1.65m), the proposed plant will be located in Ironveld’s Lapon mining area. It will have a maximum capacity of about 27,000 tons a month of DMS-grade magnetite, based on a design throughput of 60 tons an hour.
The plant will comprise screens, crushers, a mill and a low-intensity magnetic separator.
Feedstock for the beneficiation plant is planned to be delivered directly from Ironveld’s operations.
Ironveld Mining will sell magnetite ore at cost for the JV to process into DMS-grade magnetite.
It will also serve as the operator of the beneficiation plant, while Pace will undertake DMS-grade magnetite trading to end customers.
The firms anticipate site preparation, plant procurement and construction to take about four to five months. The first sale of the JV’s DMS-grade magnetite is expected by mid-2023.
Ironveld CEO Martin Eales said: “This is an exciting and value-additive transaction for Ironveld, which will utilise our existing mining infrastructure to supply extra quantities of ore, at multiples of the expected smelter requirements per month, to the JV from which we expect profitable cashflow within months.
“We would like to thank Pace for funding the initial capital contribution at a time when we are focusing our resources on the Rustenburg smelter ramp-up, and we look forward to working with them.”
Ironveld said all operations will be carried out under its existing permits, which will eliminate the need for further regulatory clearances.