Printer Friendly

Kogi Iron Limited (ASX:KFE) Reports Barging Study Completed.

Perth, Australia, Oct 14, 2013 - (ABN Newswire) - Australian based iron ore development company, Kogi Iron Limited (ASX:KFE) ("Kogi Iron" or the "Company") is pleased to report the results of a Niger River Barging Study for its 100% owned Agbaja Iron Ore Project ("Agbaja Project"). The study was conducted by South African port and coastal engineering consultants, Prestedge Retief Dresner Wijnberg (Pty) Ltd ("PRDW"). PRDW was appointed by Kogi's 100% owned Nigerian subsidiary KCM Mining Ltd to investigate the feasibility of using river barges to transport iron ore concentrate via the Niger River from Agbaja to the coast near the Warri Port, then transhipment to larger ocean-going vessels ("OGV") moored offshore. The study proposes a number of alternatives, each of which was assessed and compared to select the optimal solution for incorporation into the Scoping Study.

Concept 1 - Warri Stockpile

This option considered the use of a stockpile facility at Port Warri. It assumed the use of existing port infrastructure and the continuous delivery of iron ore concentrate by river barges from a barge loading facility at Banda on the Niger River, proximal to the Agbaja Project. A separate fleet of deeper draft sea-going barges makes use of the deeper river channels 50 nautical miles ("NM") from Warri via the Chanomi Creek to the Escravos River mouth, and a further 18 NM to the transhipment site to load the OGV.

Concept 2 - Forcados Stockpile

This option extended the river barging leg to reach a proposed stockpile site near the mouth of the Forcados River. This option offered the shortest overall distance, but the depth at the Forcados River bar is shallower than the depth at the Escravos River bar, which limits the sea-going barge parcel size. The establishment of the stockpile facility at this greenfield site would incur the additional capital cost of constructing new quay structures for berthing barges and site clearance for stockpile areas.

Concept 3 - Escravos Stockpile

This option located a stockpile at the mouth of the Escravos River with a river leg of 325 NM via the Forcados River and Chanomi Creek channel. The deep river entrance and the short sea leg help to reduce the OGV loading time even further. The Escravos stockpile would incur the capital cost of constructing new infrastructure.

Concept 4 - Direct Transhipment

This option considered the delivery of iron ore concentrate by river barge directly to the OGV vessel for transhipment. This option offered a saving in construction and operation of a stockpile facility but incurs costs of demurrage. Demurrage costs relate to the standby rates for OGVs.

Concept 5 - Direct Transhipment with Floating Storage Unit ("FSU")

This option considered the use of a FSU moored at the transhipment site for stockpiling and transhipment. The FSU is a retro-fitted Capesize vessel equipped to offload iron ore from river barges to storage in the hold and then tranship to OGVs, which moor alongside. This option is able to eliminate demurrage entirely, but incurs the additional cost of the long journey for the river barges and the laden river barges are required to operate offshore.

Study Parameters

The PRDW study also reported on the following areas:

1. Site selection process for the barge loading berth;

2. Stockpiles and the transhipment location;

3. Site information required for each location and each leg of the barging operation;

4. Information received from transhipment operators;

5. Simulation of barge logistics using a discrete event simulation software programme;

6. Marine infrastructure required for each berth and stockpile facility as well as details of the various transhipment systems;

7. Equipment requirements for each barging alternative;

8. Order of magnitude cost estimates for CAPEX and OPEX for each alternative barging operation;

9. Project implementation schedule for the construction of all the berths and the commissioning of barges, tugs and transhipment units required;

10. Results of the optimisation of the barging logistics simulation and the preferred option on the basis of cost; and

11. Recommendations of the study as well as a discussion of the options for future throughput expansion.

Conclusions and Recommendations

The use of the Warri Stockpile (Concept 1) is currently considered the optimal option from an operating and capital cost prospective. This option assumes the use of existing port infrastructure and allows for the continuous delivery of iron ore concentrate by river barges. A separate fleet of deeper draft sea-going barges will make use of the deeper river channels from Warri via the Chanomi Creek to the Escravos River mouth, and a further 18 NM to the transhipment site to load the OGV. The use of existing port infrastructure at Warri minimises capital costs compared to other options, which involve the construction of new berths.

A barge loading location, south of Banda was recommended due to proximity to the new Lokoja-Abuja A2 highway, the access road to the Niger River, seasonal variation in water levels and the least exposure to flooding. The Niger River is currently used for general river vessel traffic and is suited for barging of iron ore. The Federal Government of Nigeria is responsible for a capital dredging campaign and maintenance of navigation buoys. The potential location for a transhipment operation (at 5deg 23' N, 5deg 03' E) considers a maximum OGV design representing the 95% coverage rate for a Capesize vessel with a parcel size of 185,000t. The report recommends that a delivery lead time of 24 to 26 months should be considered in the schedule for the procurement of transhipment equipment.

Kogi Iron Managing Director Iggy Tan said: "The barging work by PRDW was of a very high standard and will form the basis of the Scoping Study underway to evaluate a 5 Mtpa iron ore operation at Agbaja. The PRDW work demonstrates that barging transportation of our iron ore product is not only a readily available and effective transport route, but identifies a most economical option."

"The barging study demonstrated a lower capital and operating cost scenario for the proposed 5 Mtpa operation, compared to using the existing un-utilised Itakpe/Ajaokuta railway line to Port Warri, which is more suited to larger annual tonnages.

However, the Company will continue to advance access and usage agreements with the Nigerian Government for the heavy haulage railway, as this remains an important part of a longer term transport solution for an expanded production profile beyond 5 Mtpa."

To view all pictures, please visit:

About Kogi Iron Limited:

Kogi Iron Limited ("Kogi Iron" or the "Company") is an ASX listed company focused on being an African iron ore producer through the development of its 100% owned Agbaja iron ore project located in Kogi State, Republic of Nigeria, West Africa ("Agbaja" or "Agbaja Project").

In recent years Nigeria has sought to diversify its economy, which is dominated by hydrocarbons, into minerals and related industries. Nigeria is the largest country by population in Africa. Nigeria had a GDP real growth rate of 7.2% in 2011, and in 2007 passed a new Mining and Minerals Act, which includes favourable fiscal terms for foreign investment in mining.

The Company holds a land position of approximately 400km2 covering 15 tenements, with the main focus being EL12124 covering most of the Agbaja Plateau. The Agbaja Plateau hosts an extensive, shallow, flat-lying channel iron deposit with an Inferred Mineral Resource of 488 million tonnes with an in-situ iron grade of 42.7% reported in accordance with the JORC Code. This mineral resource comprises approximately 20% of the prospective Agbaja plateau area within EL12124. The Agbaja Project is uniquely positioned with transport infrastructure access to Warri port via an existing and underutilised standard gauge railway, and the Niger River for barging.

Copyright 2013 ABN Newswire

Provided by an company
COPYRIGHT 2013 Al Bawaba (Middle East) Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2013 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:ABN Newswire
Date:Oct 14, 2013
Previous Article:Industry Leaders to Headline the 2013 Silver Industrial Conference in Washington.
Next Article:Baobab Resources Plc (LON:BAO) Strategic Investment at a Premium to Market From Major Shareholder.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |