Toronto-based
Magnesium Alloy (MAC) is proposing to mine, using solution methods, extensive magnesium-salt deposits situated along Congo’s coast and then extract the magnesium metal using proven technologies and local energy sources.
The study, prepared by Salzgitter Anlagenbau, a division of Germany’s Preussag, indicates a cash operating cost of US55 cents per lb. of magnesium, assuming electricity rates of US1.6 cents per kWh. MAC believes costs can be further reduced through the sale of byproduct salt and potash.
The Kouilou project would produce 60,000 tonnes of magnesium alloys annually at a capital cost of about US$514 million; the plant would be located in the port city of Pointe Noire.
Solution-mining technology could be provided by Preussag’s subsidiary, Kavernen Bau-und Betriebs, which has used it commercially for 15 years under similar geological conditions.
In a related effort, Canadian consulting firm SNC-Lavalin has produced a prefeasibility study examining the building of a hydroelectric facility on the nearby Kouilou River. The study indicates an electricity rate of US1.6 cents per kWh, with potential for US1 cents per kWh.
In addition to meeting the project’s needs of 120 MW, the hydroelectric development would help meet the Congo’s overall energy demands. (MAC says the local petroleum industry also has significant power requirements and could enter into offtake agreements for another 50 MW.)
MAC says the Kouilou project could be the world’s lowest-cost producer of primary magnesium metal and magnesium alloys, and that it is in discussions with major auto manufacturers for long-term agreements.
Amalgamet Canada, also part of the Preussag Group, has been retained by MAC as a marketing agent, and Salzgitter has offered to complete the entire project with consortia partners on a turnkey basis.
Currently, MAC is completing engineering work, an environmental impact study and the drilling of solution-mining production wells.
In May, MAC raised US$750,000 in a private placement of 3 million units, with each unit consisting of one share and one share purchase warrant. Each warrant entitles the holder to buy another share for US27 cents over one year.
In the boardroom, MAC has welcomed three new directors: Bryan Benitz, James Obi and Nataliya Hearn.
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