Work on a definitive feasibility study with Outotec for Indo Mines’ proposed iron making facility at Kulon Progo in Indonesia to produce pig iron and vanadium by product continues.

This detailed study will provide basic engineering design that is of a ‘bankable’ standard with appropriate project capital and operating costs.

The focus of this study is an improvement in both capital and operating expenditures of the pig iron plant and an improvement in vanadium recovery which is an essential revenue stream for the economic feasibility of the project.

Documents that have been submitted and reviewed by Indo Mines include plant layout; single line diagram; block diagram; document and equipment codes procedures; process flow diagram; and equipment list including major equipment outlines.

During the current quarter the project team has been evaluating the preliminary project capital and operating cost structure and scope modifications for completion of the DFS.

Technical challenges faced throughout the design process include correction material introduction to hot metal (if mill-scrap is utilised there is a drop in recoverable vanadium); the need for anthracite in the process; milling of coal; raw material handling – in particular the fine particle size of the concentrate; and acquiring credible technical data associated with the Kulon Progo region such as seismic activity.

The pig iron facility requires a captive power plant of about 100MW net capacity. A study is been undertaken by Poyry Energy with the aim of defining the conceptual design of the power plant together with its cost estimation to complement the already existing studies performed for the pig iron process plant.

Following analysis of the plant’s basic requirements, several options for the configuration were prepared and evaluated. For the purposes of comparison of the options’ different capital cost and variable operating costs, level cost of electricity was calculated for each option and the best option was identified also considering the requirements for high availability of the captive power plant. The solution with two separate trains (2 x 50 MWe), utilising two CFB boilers and two condensing steam turbines was chosen.

The Poyry’s report is being updated and verified based on the information collected from potential technology suppliers for main equipment.

Meantime, since Indo Mines’ acquisition of a 51% holding in Sapex Oil Tools Limited in January 2016, management has focused on expanding the businesses’ regional foothold, in particular within the Philippines and Myanmar.

Sapex management’s other core focus has been strengthening the businesses’ supplementary services, in particular the logistics and engineering & construction divisions. This strategy will continue to provide steady deal-flow.

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