Thursday, April 24, 2014

MENA Mining (viii): Egypt- an Option for Rare Earth?


MENA Mining (viii): Egypt- an Option for Rare Earth?

This is continuation of the previous post. I will not go into all relevant details, but rather pinpoint some interesting opportunities for mining investors, as it is outlined in the most recent (2011) detailed report on all Egyptian mineral deposits is made by Abdel-Zaher M. Abouzeid, Abdel-Aziz M. Khalid -  Mineral Industry in Egypt-Part I: Metallic Mineral Commodities . I strongly recommend studying this valuable document.

Recent debate about rare earths minerals heated by the Conflict Minerals Bill, passed by the USA in July 2010, places the Egyptian tantalum-tin resources as one of the most important for the future. This chart from Reuters shows the price leap over the last years tantalite ore. In 2010 the tantalum ore supply (Ta205) was short 1,600,000 pounds, the reserve dropped continually, and estimates are that in 2012 the tense aspect will still continue.

The most known occurrences in Egypt are: Abu Dabbab, Neuweibi, Muelha, Um Naggat, and Abu Rusheid.
Abu Dabbab: It is located about 20 km North of Mersa Alam in the intersection of latitude 25º 20' 27'' N and longitude 34 º 32' 30'' E. The mineralization occupies an area of about 0.06 km2 forming cone-like shape of 100 m x 130 m. Gippsland Ltdthrough its 50% subsidiary Tantalum Egypt JSC, owns Abu Dabbab project and Nuweibi project. Abu Dabbab ore reserves are 30.24 million tons, grading 255g/t Ta2O5 and 0.109% Sn. It is estimated that the project will be launched in the first quarter of 2013.

Source Mineral Industry in Egypt-Part I: Metallic Mineral Commodities.  by Abdel-Zaher M. Abouzeid, Abdel-Aziz M. Khalid Copyright © 2011 SciRes.

Gipplsland today (July 27)
• Alluvial separator plant successfully commissioned on site;
• Preliminary site analysis of samples confirms significant tin grades in rougher concentrates;
• Laboratory assay will enable confirmation of resource grades and reconciliation with earlier
Russian testwork.

Black Sands

From the point of view of future investments, it is worth to look into the black sands – the other Egyptian source of rare earth minerals.

Black sands occur along the Mediterranean coastal plain North of the Nile Delta, especially at the Nile outpourings near Rosetta and Damietta. These are beach placers deposited from the Nile stream during flood seasons reaching the Mediterranean Sea at river mouth. There are two types of black sands: the concentrated ore, which is very dark in color and contains 70- 90% of heavy minerals, and the diluted ore, which is lighter in color and contains up to 40%. The black sands contain some economic minerals such as ilmenite, hematite, rutile, magnetite, zircon, garnet, and monazite. Some areas were studied in details. Just an example: the reserves of economic minerals at Rashid area are as follows (in 1000 tons):
  • Ilmenite  - 2,087
  • Magnetite – 1, 437
  • Hematite - 214
  • Zircon - 81
  • Rutile - 29
  • Garnet - 72
  •  Monazite - 31
  •  Sulphides - 86
  •  Heavy silicates – 1,315
Source Mineral Industry in Egypt-Part I: Metallic Mineral Commodities.  by Abdel-Zaher M. Abouzeid, Abdel-Aziz M. Khalid Copyright © 2011 SciRes.

This June it was reported that the Egyptian Government arranged for a tender to develop the Burullus black sand project in Kafr el-Sheikh Governorate. Expected cost of the project is more than $ 120 million. The high radiation in these sands make it impossible for any development project to be carried out there so the best way is to extract these minerals and achieve profits.

Note. Doner IDI Mining And Metals Technology Company drafted in 2008 Executive Summary Of The Comprehensive Economic Feasibility Study To Exploit The Black Sands At El Burullus Dunes that has complete and detailed description of the proposed project and such summary:
“The enlisting of the capital investment costs estimates pertaining to the Arab office in the financial model ,in addition to the assumptions of the contracted for feasibility base case considering the volumes and prices of the products, concluded a return rate on the dollar (IRR) for the project standing at 21.9% and a net present value ( NPV ) of US$ 116 million. And this result is considered that concluded by the contracted for feasibility study as is indicated by the financial model ( annexed with Volume III) . And this classifies the project as an investment attracting project"

Iron ore

This map shows distribution of iron ore in the Middle East:

Iron ores in Egypt occur in two forms: Banded Iron Formation (BIF) and Ironstone. The most famous occurrences of BIF in Eastern Desert are Wadi Kareim, Um Nar, Abu Marawat, El Dabbah, Um Ghamis, Gabal El Hadid, Um Shadad, and Abu Di-wan. BIF in Western Desert was discovered in two main areas namely Gabal Nazar and Gabal Kamel. Iron stone is well represented in Egypt in Bahariya and Aswan iron ores. In Bahariya area several iron ore deposits are located: El Harra, El Heiz, Ghorabi, El Gedida, and Nasser. Major production is El Gedida area of El Bahariya Oasis. The nearly 3 Mt/year produced from this deposit is destined for Hadisolb’s Helwan Iron and Steel Works near Cairo. This production provides about three-quarters of Egypt’s demand. 

I hope that this short overview shows potential of Egypt is the destination for mining investors.....

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