The review was being conducted on test work by Tenova which demonstrated that under pilot plant conditions the Kogi iron ore was successfully able to be converted to a steel grade suitable to make quality steel billets.
FEC’s review has further provided confidence to the board to scope the terms for a full bankable feasibility study (BFS) for the Agbaja Project, with the aim to commence this work as soon as funding is secured.
Kogi’s chairman Don Carroll said: “The company welcomes the results of the FEC review as it seeks to further progress the Agbaja Cast Steel Project.
“Pleasingly the report builds on the work completed to date by Tenova regarding the proposed steel process configuration.
“The proposed opex and capex amounts continues to provide the company with the strong belief that the Agbaja Cast Steel project will play an integral role in the Nigerian steel industry.
“The company continues to progress the bankable feasibility study as well as negotiations with potential ECA financiers and looks forward to updating shareholders as further information comes to hand.”
Nigeria has substantial domestic demand for steel products
Kogi intends to build a cast steel plant at its 100% owned Agbaja Cast Steel Project in Kogi State, Nigeria.
The project will utilise company leased iron ore deposits and will supply a cast steel feedstock to steel manufacturing and product fabricators in Nigeria and overseas.
Kogi is progressing a definitive feasibility study (DFS) on the project.
Notes from the review
FEC’s review made the following points:
Tenova tested a proven process for reducing direct reduced iron, FEC suggested removing more impurities would lower operating costs;
FEC noted smelting and refining the DRI used a proven process which was a submerged arc furnace (SAF), FEC added a SAF is not proven at the proposed scale for this type of iron ore and consumables;
FEC noted sourcing steel making equipment from India lowered capex and that energy was the largest proposed contributor to opex; and
Costs do not account for Nigeria’s Economic Growth and Recovery Plan.