Fresh from signing its third off-take term sheet, TNG Ltd has now appointed German metallurgical engineering company SMS Group to start front end engineering and design work for its flagship Mount Peake vanadium-titanium-iron project in the Northern Territory.
This includes all process plant equipment including the mine site concentrator, TIVAN downstream processing plant, titanium pigment plant and associated equipment.
TNG’s proprietary TIVAN process is a method for treating ore without the need for expensive, energy-intensive roasting to produce a titanium feedstock with low iron content which can also potentially minimise the environmental impact compared to a standard sulphate titanium pigment production process.
On completion of the preliminary engineering design work, SMS will provide TNG with a binding fixed-priced turn-key engineering, procurement and construction proposal for the concentrator and processing plant.
Importantly, this will include production quantity, production rate and product quality guarantees that will significantly de-risk the project.
TNG said that using a single contractor is expected to provide support for its strategy of sourcing export credit agency project debt financing for Mount Peake.
This mirrors the route taken high purity alumina developer Altech Chemicals who secured a USD$170m guarantee from the German Government and received similar throughput, processing and quality guarantees from SMS.
Altech is now on the verge of closing finance for its proposed Malaysian high purity alumina plant and associated kaolin mine near Meckering in WA.
In late October, TNG signed a third off-take term sheet with Switzerland’s DKSH for life-of-mine offtake of up to 100% of the titanium dioxide pigment produced at Mount Peake.
This complements the binding offtake agreements with WOOJIN Metals for at least 60% of the vanadium output and a binding term sheet with Gunvor (Singapore) for iron products.
Mount Peake has an ore reserve of 41.1 million tonnes grading 0.42 per cent vanadium pentoxide, 7.99 per cent titanium dioxide and 28 per cent iron.
It is forecast to produce 243,000 tonnes of high-purity V2O5, 3.5 million tonnes of titanium pigment and 10.6 million tonnes of high-grade iron oxide during its initial 17-year mine life according to economic studies undertaken for TNG.
With the reserve representing just 30% of the measured and indicated mineral inventory, there is still considerable scope for TNG to extend the mine life further if commodity prices hold up.
TNG Managing Director Paul Burton said: “We are extremely pleased to have achieved this outcome with SMS group, including a comprehensive mandate to produce a fixed-price EPC proposal for the development and construction of the entire Mount Peake Project.”
“Having SMS also assume technical and product guarantees under the resulting fixed-price EPC arrangement significantly de-risks the project and marks one of the most significant milestones its development history.”
