Drilling for iron starts in Marnitz

MARNITZ - Ferrum Crescent Limited, an iron ore project developer with South African assets and a keen interest in the Waterberg, announced this week that it would start drilling on two adjoining farms in the Marnitz area shortly. The company has already spent around R22-million in exploration work on the Moonlight farm, 90 km from Lephalale and about 150km from Mokopane.

Ferrum Crescent Limited is an Australian company, which seeks to capitalise on the future global demand for iron and steel by producing iron products in South Africa, for both the domestic and export markets. The company listed on the JSE last Friday.

Executive chairman, Ed Nealon, commented, “We have identified South Africa as having enormous potential in the iron ore market and our Moonlight Iron Ore Project is an exciting prospect amid positive global demand for iron ore resources. South Africa has a mature resources investor base and, as a South African operator, we look forward to raising our profile within this knowledgeable mining centre.”

To that end, the Company has acquired a controlling interest in a South African company, that holds the rights to significant iron ore mineralisation in South Africa. The Moonlight Iron Ore Project is the Company’s flagship project, based around the high quality iron ore deposit known as Moonlight.
Ferrum Crescent’s chief operating officer (COO), Vernon Harvey told Mining Weekly Online this week that despite its plans to start drilling, it could not complete a definitive feasibility study for its Moonlight Crescent iron ore project, unless more clarity is obtained on the proposed rail link to the Waterberg area in Limpopo.

"We will continue, however, developing the resource at the iron-ore project, while we await clarity on logistics.” He added that the Waterberg is set to become one of South Africa’s next significant mining areas because of its large coal and iron ore deposits, however, development of new mines was hampered by the inaccessibility of the resources as no adequate rail or road capacity exists in the region.

Ferrum Crescent  applied for mining rights from the Department of Mineral Resources in January and anticipate this to be granted early in 2012. It plans to ship up to 4.5-million tons a year of pelletized iron ore concentrate from the Moonlight project, adding that it expects to produce iron concentrates of 69%, owing to the coarse and pure nature of the Moonlight resource.

The company already signed an off take agreement with Swiss-based Duferco SA in June, giving it a right to 4.5-million tons a year of export production, including first choice to an additional 1.5-million tons a year of product, if it is not sold locally.

The company plans to pump its iron ore slurry to the railhead at Lephalale, where a dewatering and pelletizing plant would be erected, before the product would be transported to the closest harbour. Harvey added however that State-owned Transnet Freight Rail has not been able to give the company any assurances as to the availability of capacity to ship its product.

“We do, however, have choices. We are looking into the potential to move our product to either Selebi Phikwe or Palapye in Botswana, in anticipation of the new Trans-Kalahari rail line to be constructed. But, even with this option, we do not have a time frame for completion to work with,” he said.
It is estimated that mining operations will provide jobs for around 700 workers and it is expected that a small mining town will develop in the area. Farmers in the area have voiced their concerns about the pollution of underground water as well as a possible shortage of water for farming due to the demands for water to operate such a mine.

Ferrum Crescent’s BEE partner, Mkhombi Investments Proprietary Limited, owns a 26% stake in the Company’s South African operating subsidiary, Turquoise Moon Trading 157 Proprietary Limited. Mkhombi is a partner that includes two women’s organisations and a community trust representing local Limpopo communities affected by the Company’s Moonlight Iron Ore Project.