Canada-based Champion Iron is mulling a $470.7-million investment for a direct reduction pellet feed (DRPF) project at Bloom Lake, Quebec, which will further contribute to reducing emissions in the steelmaking process.
The project will upgrade Bloom Lake’s iron-ore concentrate to a DRPF-quality product of 69% iron content, which should attract a substantial premium over Bloom Lake’s current high-grade 66.2% iron-ore concentrate.
“The project, leveraging the rare purity of our resources, positions our company to participate in the accelerating transition in the steel industry to reduce emissions, and offers the opportunity to generate significant returns on investments while creating additional positive impact with quality jobs for the region,” said CEO David Cataford on Thursday.
A feasibility study evaluating flowsheet modifications to the Bloom Lake Phase 2 plant and infrastructure required to upgrade its current production to DRPF grade iron-ore, delivered positive results. The average life-of-mine production will be about 7.5-million tonnes a year of DRPF quality iron-ore at 69% iron with combined silica and alumina content below 1.2%.
High-purity DRPF product is a primary ingredient required in the green steel supply chain to produce high-quality and complex steel in the direct reduced iron and electric arc furnaces process, reducing carbon dioxide equivalent emissions by more than 50%, compared with the conventional steelmaking route using blast furnace and basic oxygen furnace.
A feasibility study yielded a net present value of $738.2-million and an internal rate of return of 24%, after tax.
Meanwhile, TSX- and ASX-listed Champion reported that Lake Phase 2 expansion to 15-million tonnes a year had reached commercial production in December.
“The Phase 2 investments at Bloom Lake should contribute to normalising operating costs per tonne sold as we continue to ramp up the project towards nameplate capacity, which we anticipate achieving in the near term,” said Cataford.
The Phase 2 expansion has helped to increase production of 2.95-million wet metric tonnes (wmt) of high-grade 66% iron concentrate for the December quarter, representing an increase of nearly 50% compared with 2.03-million wmt for the same period in 2021.
C2 cash costs jumped to C$76/dry metric tonne (dmt) in the three-month period, from C$59.5/dmt in the same period of 2021.
Champion generated revenue of C$351.2-million, up from C$253-million in the same period of 2021.