Pig-Iron
TNG will produce a high purity iron oxide (Fe2O3) via the acid regeneration process of the TIVAN® process plant. In a reaction to the changed market conditions and outlook for iron oxide, TNG has taken advice from its metallurgical partners and decided to opt for a well-recognised, industry standard, iron product that has a guaranteed market and strong price. Pig-Iron is an intermediate iron product that is cast into ingot “pigs” and used in integrated steel mills and the metal casting industry.This applies to their Mt Peake/Darwin project but does not mean that is what others such as BBI will be looking at the TIVAN process to achieve.
From TNG's recent presentation cost per T of the final Iron Oxide Pig Iron billets is pegged at $137/T
http://clients2.weblink.com.au/news/pdf_1\01948449.pdf1T of Iron Ore 1000kg 58% (which is roughly where Fortescue sit) is 580kg of Fe - by improving this by just 20kg per Tonne we get a premium of $10.
At $137/T processing cost to achieve high purity Iron Oxide lets say 100% for arguments sake is 13.7c per kg or $1.37 per 10kg or additional % of Fe content.
That $10 premium which is being paid for the 20kg of Iron Oxide would cost around the $2.74 mark if it was from a TIVAN processing route.
Now multiply that by a ship load of 200,000T
$2M premium for high grade less TIVAN cost of $548K = $1.6M per ship or $800K per 100KT of 60% IO
FMG produce 46.5mt per quarter
http://www.fmgl.com.au/docs/default...terly-production-report.pdf?sfvrsn=94c34fa5_6Assuming FMG require 20kg per Tonne to boost the FE content to achieve the premium, this is 46.5MT x 0.02T or 0.93MT of high grade TIVAN produced Iron Oxide
TNGs TIVAN ~$process will produce 637,000T of Iron Oxide per Quarter from low grade Titano-Magnetite ORE (23%) throughput of 6MTPA (Beneficiation plant)
I wonder what it will cost to achieve the net premium of $372M PER QUARTER based on FMG existing production figures
Noted that my figures are very rough, but I bet BBI (& FMG) have run the numbers & with higher grade ore (Circa 40-50%, not 23%) run through a TIVAN process plant, I bet they can get this $137/T cost of high grade Fe down even lower.
