MONUMENT Mining has delayed the start-up of iron and copper production at Mengapur Polymetallic Project until further notice due to depressed and volatile commodity prices. The main plant at Mengapur has been put on care and maintenance while some work continues at a reduced level.
The company has made considerable progress with refurbishing and upgrading its 1000 tonnes/day pilot plant. The plant has been overhauled and successfully run, all lines have been cleaned out or replaced and both mills are in satisfactory operational condition to run as a pilot operation, which is the first stage of the project.
A tailings storage dam for copper and iron process tailings has been emptied, cleaned up, lined, and compacted with impervious clay ready for use. A new pyrrhotite storage dam has been constructed, lined and compacted ready to store this material, a by-product from producing saleable iron.
When the company acquired the project, saleable grade of 62.5% iron was selling in the range of US$140 per tonne or higher, far in excess of the price today. Due to the sustained fall in iron prices the company changed course and commenced re-engineering its pilot plant to accommodate production of iron and copper. The purpose was forward planning based on the main hard rock sulphide ore body containing iron and copper among other metals. The hard rock ore requires a more complex flow sheet and recovery circuit than the iron contained in free digging soils some of which is overburden waste.
However, following a number of adverse events including the dramatic drop in global iron ore prices, falling copper prices, the build-up of global inventories in these metals and general resource market price pressure, Monument has been working to try and off-set these events.
The risk profile of the project increases considerably under these conditions. These conditions include the ability to raise project finance funds due to increased risk, volatile and declining metal prices, and an environment of increasing metal inventories. In addition, the company observes that the major suppliers of iron ore to China have been investing large amounts of capital toward increasing production capacity.
As a result of this, Monument has been focusing on copper which whilst suffering declines in market price, maintains a reasonable price and margin for many producers.
The company will maintain its SGS operated site analytical laboratory, will maintain site security and maintenance, including maintaining all environmental obligations, regulatory reporting and compliance, accommodation and messing for key staff.