The Wadi Sawawin iron ore project in Saudi Arabia will be feasible at either five or ten million mt a year, the London Mining company announced on December 23, citing the results of a bankable feasibility study. Negotiations on the financing of the project are expected to be concluded at the end of 2010, and construction is likely to take 27 months with commissioning currently anticipated in mid-2013.
London Mining owns 50 percent of the Wadi Sawawin project, a joint venture with the Saudi Arabian National Mining Company (NMC). The location of the project is 900 km north of Jeddah and 60 km from the Red Sea coast.
A press release by London Mining said, "The location of Wadi Sawawin will provide it with a competitive advantage over competing Brazilian and European supply through reduced freight rates from its deep water port in the Red Sea and access to low cost Saudi Arabian oil."
The feasibility study assessed two potential scenarios for the project, producing either five million or 10 million metric tons a year. Capital for the five million mt scenario is estimated at $2 billion, comprising $184 million for the mine and ore transportation, $399 million for processing, filtering and tailings, $246 million for pelletizing and $556 million for port, power, a desalination plant and other infrastructure. If the company were to decide on a ten million mt a year operation, the total capital expenditure would rise to $3.2 billion.
The current JORC (Australasian Joint Ore Reserves Committee) resource will be enough for a mine life of 14 years at a run rate of five million mt a year, although London Mining expects to add to the resources and confirm a 20-year mine life early in 2010.