The Zanaga joint venture (JV) iron-ore project in the Republic of Congo, has reached the feasibility stage, which should be completed by the second quarter of 2014.

The feasibility study follows a positive prefeasibility study (PFS) on Zanaga, which was completed in November 2012, and includes the mining convention negotiation process and enivironmental- and social-impact assessment. The PFS, reported in accordance with the Joint Ore Reserves Committee (Jorc) code, has already confirmed sufficient ore reserves to support the planned production of 30-million tons a year of high-grade 68% iron content pellet feed product over a 30-year life-of-mine, which will be transported to the coast through a 380 km slurry pipeline.

In line with the Jorc code, only 2.3-billion tons of the 6.8-billion-ton mineral resource at Zanaga is required to support the initial mine development plan. However, in September, Aim-listed iron-ore exploration and development company Zanaga Iron Ore Company (ZIOC) announced a 2.5-billion-ton probable ore reserve at 34% iron content from its measured and indicated mineral resource base of 2.4-billion tons at 34% iron content and 2.2-billion tons at 30.8% iron content respectively.

“Not only does this result make the project economically viable, but it also makes Zanaga the largest iron-ore reserve in West Africa,” says ZIOC corporate development and investor relations manager Andrew Trahar.

The PFS also revealed significant expansion potential in production level and mine life.

The study also confirmed the development of a slurry pipeline as the optimal transportation solution, as it would have about a $1-billion capital expenditure (capex) saving on direct costs, compared with a rail option. It will also benefit from lower execution risk and offer a low operating expenditure solution.

Additionally, the JV, between major shareholder of 50% plus one share interest, diversified miner Xstrata, and ZIOC, anticipates that, in the first seven years of operation, the pipeline option will produce more cumulative product than a 45-million-tons-a-year rail option, owing to the reduced prestrip and rapid ramp-up to nameplate capacity.

The PFS confirmed the $7.4-billion capex for the project, which is in line with a previous expenditure estimate of $7.3-billion, calculated during the value engineering exercise, which was announced in November 2011.

Additional costs relating to services and contractors, owners’ costs and environmental and community investments are expected to be about $1.6-billion. The JV has incorporated a contingency of $900-million into this to cover any additional costs.

The Zanaga project is focused on the development and construction of an iron-ore mine, as well as related processing, transport, port and electricity infrastructure at $2.348-million, $1.194-million, $603-million and $717-million respectively.

The Zanaga iron-ore deposit will be developed as an openpit mining operation that will excavate haemetite and magnetite ores, which will be processed and upgraded to 68% iron-ore concentrate.

Aerial geophysical surveys and morphological analysis reveal a mineralised trend that constitutes a 48-km-long and 0.5-km- to 3-km-wide complex elongation trending north to south.

The ferruginous beds are part of a metamorphosed, volcano-sedimentary itabirite/banded ironstone formation (BIF) and are interbedded with amphibolites and mafic schists. The mineralisation exhibits faulted and sheared contacts with the crystalline basement.

As a result of prolonged tropical weathering, the BIF has developed a distinctive supergene iron enrichment profile.

At the surface, a high grade of more than 60% iron canga of apparently limited thickness (less than 5 m), capping a discontinuous and soft, high-grade, iron supergene zone of structureless haematite/goethite, also of a limited thickness (less than 7 m), is sometimes present.

The base of the high-grade supergene iron zone grades quickly at depth into a relatively thick, leached, well-weathered to moderately weathered friable haematite itabirite with an average thickness of about 25 m and a grading of 45% to 55% iron content.

The base of the friable itabirite zone appears to correlate with the moderately weathered or weakly weathered BIF boundary and fresh BIF comprises bands of chert and magnetite/grunerite layers.

The concentrate will be transported through a slurry pipeline for more than 300 km to an iron-ore terminal and deep-water port near Pointe Noire, in the Republic of Congo, where it will be dewatered before being shipped to the global seaborne iron-ore market at a cost of $23/t, which would make the project one of the lowest cost producers in the world, says Trahar.

In addition to the mine development, the JV has identified a site for the development of a port, about 9 km from the established deep-water port of Pointe Noire. The port will initially involve the development of a 30-million-tons-a-year capacity jetty, with the option to expand this to 60-million tons a year.

A further key infrastructure consideration by the JV is power.

“We have identified an initial project demand of 355 MW, rising to 455 MW. Our capex estimates include a dedicated gas-fired power station, located at Pointe Noire; however, a 300 MW plant has already been constructed by Italian oil company Eni to use some of the natural gas that is currently being flared,” says Trahar.

He says there are plans to significantly expand the power supply to 900 MW.

The JV will have a more definitive project and infrastructure timeline following the completion of its feasibility study; however, Trahar reveals that the schedule to start the main construction works, which is expected to take between three-and-a-half to four years, will be determined by financing, approvals and early works.

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