ZincOx (LON:ZOX) Korean Recycling Project (KRP) is beginning to gain momentum as the company has now secured a 50 year lease for the project.
The lease provides for a minimum rent-free period of five years if that ZincOx completes the development of Phase 1 of the KRP within two years and the development of Phase 2 within four years.
ZincOx expects to wrap up the development within this timetable.
Under certain conditions ZincOx will also be eligible for rent-free status beyond five years.
“The development of the KRP is beginning to gain significant momentum, and at the same time we are making good progress with our financing plans,” said executive chairman of ZincOx Andrew Woollett.
ZincOx expects to have offtake arrangements in place prior to commencement of construction of Phase 1 of the plant for the zinc oxide concentrate and for zinc hot briquetted iron (ZHBI), which could also be sold into the scrap spot market.
The KRP site covers 9.26 hectares within the Cheonbuk General Industrial Complex, which is already environmentally permitted.
The project is conveniently located just 10 kilometres (km) west of Pohang, which is one of South Korea's major steel producing centres, and will supply approximately 20 percent of KRP's feed requirements.
In addition to that, Pohang will host potential customers for KRP's ZHBI.
The KRP Site is also located close to the main Seoul-Busan motorway providing excellent road access for the transport of electric arc furnace dust from steel mills elsewhere in South Korea.
ZincOx has 10 year supply contracts for 400,000 tonnes of electric arc furnace dust (EAFD) per annum.
ZincOx's phased development plan foresees the treatment of 200,000 tonnes of EAFD in Phase 1 to produce approximately 60,000tpa zinc oxide concentrate at 73 percent zinc and approximately 95,000 tonnes per annum of ZHBI.
In Phase 2 ZincOx plans to treat a further 200,000 tonnes of EAFD and produce annually a total of approximately 120,000 tonnes of zinc oxide concentrate and approximately 190,000 tonnes of ZHBI.
ZincOx expects the first production of zinc concentrate from the KRP in Q1 2012.