Strike Resources, Apurímac Ferrum plan 20Mt/y iron ore mine in 2012

- Monday, August 4, 2008

Strike Resources, Apurímac Ferrum plan 20Mt/y iron ore mine in 2012

Australia's Strike Resources along with Apurímac Ferrum and two other Peruvian partners are planning to launch a 20Mt/y iron ore mine in the South American country in mid-2012, Apurímac Ferrum general manager Federico Schwalb told BNamericas.

A recent prefeasibility study on the project in south central Peru's Apurímac department laid out a US$2.6bn capex, 15-year mine life and 20Mt/y production, making it the largest iron ore mine in Peru.

The study contemplates construction of an open pit, processing plant, a port and a roughly 360km pipeline to transport the product from the mine to the port, Schwalb said.

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The companies involved are also considering transporting the product by train, he said.

But before a positive final feasibility study can be carried out for the mine, it must increase the roughly 172Mt of inferred resources grading 62.3% iron ore to at least 300Mt and upgrade the category of mineralization, according to the executive.

However, the company does not have social approval to continue drilling in key areas of mineralization and now aims to focus on providing better information to the roughly 15 surrounding communities in order to gain their consent, he said.

Schwalb said the hope is that the social license is granted by year-end.

In addition, the project's partners are involved in a dispute concerning their respective stakes in the property, but which does not impact Apurímac Ferrum and also is not obstructing the advance of the project, Schwalb explained.

Strike Resources is also involved with Apurímac Ferrum in a project in Cuzco department, which Schwalb said is at a conceptual stage, although exploration is being carried out.

Presently Shougang Hierro Perú, which operates in Ica department, is the country's only iron ore producer. Shougang sold 7.71Mt of iron ore in 2007 and is planning to double capacity to 16Mt/y by mid-2010.

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