LATEST test work from Southern Palladium’s Bengwenyama project is showing that it can extract more chrome concentrate from the UG2 reef than originally expected, which would help to stabilise future revenue from the mine, says MD Johan Odendaal.
Throughout the multi-year slump in platinum and palladium prices, chrome prices stayed high. That helped PGM miners that were able to extract chrome to weather the downturn.
The Bengwenyama project is a potential future PGM mine on the Eastern Limb of the Bushveld complex, adjacent to the Valterra/African Rainbow Minerals Modikwa Mine. Southern Palladium is busy with a definitive feasibility study (DFS) on Bengwenyama, and expects to receive approval of its mining right later this year.
Exploration to date has shown a total mineral resource of 40.25 million ounces from both the UG2 and the Merensky reef. Odendaal said the plan is to focus on the UG2 reef initially because its 7E grades are higher, with higher chromitite and rhodium grades.
The original prefeasibility study envisaged that the conventional processing plant would produce a fine chrome grind, at a recovery of 30% chromite from the UG2 – ultimately resulting in a chrome concentrate of about 175,000tpa from a 100,000t/month ore feed into the plant. Latest test results showed that an initial coarser grind after dense media separation (DMS) would ultimately result in a 65.7% recovery of chromite, or almost 400,000tpa of concentrate from a 100,000t/month ore feed.
The higher chrome concentrate product will result in chrome becoming more of a co-product than a by-product of mining other PGMs, as it is for most older mines on the Bushveld complex that use more conventional extraction methods.
Higher chrome concentrate recovery has other benefits. It would improve the grades of material sent to the mine’s secondary processing circuit, and improve the grades of the material sent to the external refinery (where refiners levy a penalty on higher chrome content). It would reduce the chrome content of the waste material sent to the dry stacked tailings facility, which cuts tailings storage infrastructure costs, reduces the risk of groundwater contamination which delivers environmental benefits. It would allow the mine to produce both a fine and a coarser chrome product for the market.
Odendaal said there is generally a pay-off – higher chrome recoveries can result in lower PGM recoveries, as ruthenium in particular is associated with chrome and becomes harder to liberate. However, at current ruthenium prices (around $1,800/oz) it is more viable to focus on the chrome – the situation only changes if the ruthenium price were to rise to $5,000/oz.
He said a rough calculation, using current spot prices, suggested that using this recovery method would result in chrome revenue contributing as much as 20% of the future mine’s revenue.
Southern Palladium is aiming to complete the DFS by the fourth quarter of this year. Heavy rain in the Steelpoort area delayed drilling by about a month – but it also showed that the mining footprint was not affected by flooding, he said.