Metallurgy does the heavy lifting when it comes to defining and optimising a project’s capex and opex
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Metallurgy is a word often thrown around in the resources space, but what does it actually mean and how can it be make or break for resources projects in Australia?
Metallurgy is the beneficiation of minerals and the extraction of valuable commodities into a saleable concentrate, something a client can market and sell to a customer in a useable form.
That’s where companies like Independent Metallurgical Operations (IMO) come in, advising how a resources player can exploit the mineral properties of their deposit to generate a high-grade mineral concentrate or final metal product.
The other side is hydrometallurgy, refining and producing an end product that the customer can use – which is becoming more prevalent in Australia, IMO GM Alex Borger explains.
“We’re seeing companies looking to progress into refining for commodities such as lithium, nickel and rare earths, which means they can eliminate the gangue material (waste) that’s shipped, reducing the carbon footprint required for shipping that concentrate,” Borger said.
“For example, rather than shipping a spodumene concentrate at 6% Li2O grade, companies are now looking to refine a pure lithium hydroxide (62% Li2O) that can be sold directly to battery manufacturers, eliminating refining that typically occurs in China.”
Driving that transition to produce refined end products is an increased demand for high purity metals, which means an increased demand for metallurgical services that can extract high purity minerals and refine into commodities that can be directly used for example in lithium-ion batteries.
“We’re definitely seeing a requirement in the battery metals space for higher purity products,” Borger said.
“This feedback is being passed on from end users, so essentially, we’re that step in the supply chain between the mine and the final product where we can increase recovery and purity, maximising the value from a resource.”
“And as resources are getting more complex, the mine grades are reducing and impurities are increasing, which means the complexity – and importance – of metallurgy is starting to become more apparent.”
And when projects fail, it can be because the metallurgical complexities have not been fully investigated, Borger said.
“Companies need to conduct metallurgical work to best understand their resource and process options in order to get the most out of their ore body,” he said.
Resources companies are making complex discoveries like rare earths for example, but IMO Lead Metallurgist Peter Adamini says the real question is can they economically extract a saleable product?
“The cost of a beneficiation plant is in the hundreds of million dollar range whilst hydromet plants / refineries are typically north of a billion dollars. The question then becomes ‘what is the cost to process this ore and generate a saleable product?’“ Adamini said.
“Investors are starting to get wise to these large capex sort of projects, particularly if they don’t see the deposit size being amenable to support such a high capex. The ore body needs to be able to support a high tonnage operation especially when you consider the cost of an expensive WA workforce which minimally increases as the process plant capacity increases.
“The capex and the opex are really the two key numbers – and the bulk of that comes from the work that we do.”
Adamini says companies need to consider how fine they’re going to have to grind the ore, how much energy that’s going to take and the cost of reagents to extract those valuable minerals.
“Another factor is infrastructure, for example, the power to grind this material, considerations include how far away are you from the closest power lines, or how much will a solar farm or diesel generators cost?” he said.
Additionally, transportation of the final product along with ore shipping distance if you’re toll treating are other considerations.
“Metallurgy is really at the heart of those high-cost items and whether or not this project is going to fly.”
IMO’s ultimate goal is to assess the metallurgical characteristics of an orebody or the performance of a metallurgical processing plant to ensure production and profit targets for their clients are met.
There are typically two main schools of practice in metallurgy – beneficiation (concentration) and hydrometallurgy (refining).
Beneficiation is the physical concentration of minerals (and some metals such as gold) into concentrates for further refining. For resource companies this has been the predominant method utilised in Australia to generate a saleable concentrate.
For mining companies, experienced metallurgists / process engineers are a must for the design, commissioning, and operation of these processing plants. The commodity, mineral type and liberation characteristics dictate the beneficiation technique required for the concentration of the target mineral.
Typically, this involves either gravity, magnetic or flotation techniques to concentrate the target mineral(s).
Hydrometallurgy is typically utilised to refine the concentrates generated from the beneficiation process. Australia has historically avoided the refining process, leaving the risk and potential reward for overseas companies to undertake.
Refining concentrates into higher purity metals or metal oxides generally involves dissolving the target metal followed by impurity removal by selective precipitation, extraction into organic liquors and / or electrorefining to name a few process options.
In today’s world, the lack of experienced Beneficiation and Hydro-metallurgists as part of the mining companies team could cost a miner millions of dollars down the line.
Modern metallurgists work in both emerging and established industries, usually as part of an interdisciplinary team of geologists, mining engineers, statisticians, finance experts and project / study managers.
Metallurgical processing techniques have always been steeped in tradition with new, novel processes tending to turn investors away, as unless the cost of setting up and operating expensive non profitable pilot plants is conducted, the process has a much higher chance of failing on a commercial scale.
If an operation struggles for too long to reach nameplate capacity, then it can often be bought for a fraction of its initial cost assuming that it’s still profitable. In metallurgy it’s always the race to be second so that somebody else can iron out the bugs for you.
Whilst IMO believes that ore sorting can be a valuable process on suitable ore bodies, the word around town amongst juniors developing process flowsheet is “don’t mention ore sorting or your share price will be crucified”.
This has typically held back the development of new processes as the lack of upfront work causing failures along with the long lead times and costs required to develop these processes in conjunction with variable commodity prices and a cyclical mining industry make it even more difficult.
With advancing tech requiring newer efficiencies out of ores and the electrification of the world, Australia is slowly starting to release the benefit of constructing more complex refineries to generate end products which can be directly fed into lithium ion batteries required for electric cars.
Nowadays, metallurgists are more multidisciplinary with a better understanding of the geology, mine plan and how varying mineralogy can be utilised to ensure a more robust process is developed to treat the entire orebody with a focus on the CAPEX payback period.
They are required to provide advice on sample selection, geometallurgy, mine plan, flowsheet development, feasibility studies, process variables, mine closure, due diligence, and client representation.
They are also more often being employed on company boards post the mineral resource definition or offered performance rights to provide incentive to get the job done right the first time.
The world is a hotbed of exploration these days. Those that come out on top make sure they have every available tool possible to stand out from the pack.
Nowadays, thorough metallurgical studies play a major role in fulfilling exploration companies’ ambitions of finding profitable ore bodies and seeing them become successful operations.
This article was developed in collaboration with Independent Metallurgical Operations, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.