OHIO RECYCLING PROJECT, USA
The first
recycling project to be developed by the Group is the Ohio Recycling Project
(ORP) together with the washing plant at Big River Zinc (BRZ) at a cost
currently estimated to be US$179 million, including working capital and
contingency which will generate annual earnings of US$23.7 million (post
tax, depreciation and interest payable) assuming a zinc price of US$2,200
per tonne and a pig iron price of US$310 per tonne.
ORP will comprise a rotary hearth furnace and a submerged arc electric
melter. It is planned to treat 200,000 tonnes per year of electric arc
furnace dust (EAFD) containing an average grade of about 24% zinc. The
rotary hearth furnace will produce a concentrate containing zinc and lead,
together with iron in the form of direct reduced iron. The latter will
be immediately transferred to the melter which will separate the pig iron
and by-product slag.
The EAFD will be supplied under the terms of a strategic alliance with Envirosafe Services of Ohio Inc (ESOI). ESOI, the largest disposer of EAFD in landfill in the United States, has a 15 year track record in the sourcing and transportation of EAFD.
Aerial view of planned plant
In November 2007, a 7 hectare plant site was purchased at Delta, in Fulton County, north-west Ohio and in March 2008 the last of the environmental and other permits were granted so that site work can commence in May 2008. The project has been awarded certain grants and tax incentives.
In order that development will not be delayed, in January
2008 US$40 million was raised for the development of the project. These
funds are being used for the identification and ordering of long lead
time items of equipment, site preparation, installation of utilities and
detailed engineering design to enable the definition of process equipment
tenders.
The strategically located site is well positioned for
rail and road transportation networks as well as having good access to
power, water and gas. Application for various construction and operating
permits is sufficiently advanced to enable construction to commence. ZincOx
is working with a major local engineering company to finalise the design
and engineering of the plant.
ORP is designed to produce annually 47,000 tonnes of
zinc contained in a crude zinc oxide concentrate, 56,000 tonnes of pig
iron and 48,000 tonnes of slag. The zinc concentrate will be transported
to Big River Zinc (BRZ) for further processing, the pig iron will be sold
back to the steel mills from where the EAFD originated and the inert slag
can be sold to the construction industry. On the above assumptions, the
EBITDA of the project at full production will be US$57.7 million per annum.
The Group’s interim strategy
is to wash the Ohio and Aliaga concentrates at BRZ to remove chlorine
and fluorine and sell the washed product to existing zinc refineries.
BRZ already has a fully permitted washing plant and with a small capital
investment it could be operating within a short period of time. This strategy
has the advantage of generating early cash flow at a much reduced capital
investment than will be required to convert BRZ in order to produce zinc
metal, which is the Company’s long term plan.
©2001-2008 ZincOx Resources plc
