Lincoln Minerals (ASX: LML) is pushing closer to pulling the trigger on its Green Iron project on the Eyre Peninsula in South Australia, advancing several key aspects of a partnering strategy for its 1.2 billion-tonne magnetite deposit.
The company confirmed today that it is looking to leverage off the SA Government’s new low-carbon iron and steel strategy paper, which has been designed to help develop local magnetite resources produce environmentally-friendly iron and steel.
In particular, Lincoln has assembled a team of specialists with prior experience with the resource to conduct an initial assessment of the project’s parameters. Due to the resource familiarity, the group has been able to get up to speed quickly to evaluate the technical data and kick off early discussions with potential partners.
Management is also finalising a formal presentation to introduce potential partners to the project’s scope and details. The presentation will be released in the coming weeks and will precede more detailed engagement with interested parties.
Lincoln has also established detailed development scenarios and prepared a comprehensive data pack with critical project information. The pack is designed to help engagement with interested parties during the initial phase of the partnering process.
The expedited plan has come about because of the SA Government’s white paper on the future development of a green iron and steel industry in the State, which was released in June. The plan is to convert the Whyalla Steelworks in the Upper Spencer Gulf into a direct reduced iron (DRI) plant capable of taking 2.5 million tonnes per annum of magnetite ore.
Through a State Government commitment of $50 million and an additional $63.2 million from the Commonwealth, the transition would allow direct carbon dioxide (CO2) emissions to be reduced by up to 90 per cent and increase steelmaking capacity by 50 per cent from 1 million tonnes per annum (mtpa), to 1.5mpta, protecting 3000 jobs.
The Whyalla facility – owned by Indian-born British businessman Sanjeev Gupta’s GFG Alliance – is the biggest employee in the town and the only producer of rail in Australia. The steelworks produces 1 million tonnes of raw steel each year, with about 65 per cent transferred by rail to Arrium’s Market Mill as billets for further processing.
The balance of the steel is converted to finished products at the Whyalla Rolling Mill for the construction and rail transport industries.
The process of using DRI saves significant amounts of energy and reduces carbon emissions.
Initially, magnetite is transformed into a hot pelletised iron ore, or “lump” product. The lump is then used as feedstock in a DRI plant, where it is converted into sponge iron. The sponge iron is subsequently processed in an electric arc furnace to produce molten steel, which is then used in finished products.
According to the company and in light of the State’s strong support for the green iron and steel industry, Lincoln has now started discussions with government departments to see how it can fit into the initiative. Once its new presentation – which is expected in the coming weeks – is complete, management will then start actively marketing to investors and partners to help push the project onto its next stage of funding.
With a high-grade graphite project also now moving a stage closer to development and a magnetite deposit that would appear to fit SA’s plans to revitalise and green-up the State’s steel industry, the company will certainly have its hands full – and its focus as a green-energy materials supplier has it looking like it could just be in the right place at the right time.
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