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  • Charter Pacific Corporation To Meet With Major Steel Manufacturers In India 0 comments
    Aug 2, 2013 1:53 AM

    Charter Pacific Corporation (ASX:CHF) is understood to be fielding interest from Indian groups for its Kaoua El Khadra iron ore project in Mauritania, which has an iron ore Exploration Target of 2.6-4.4 billion tonnes.

    So much so Charter Pacific has sent one of its key advisers, Darshak Mehta, to meet with major steel manufacturers and other interested parties in India right now.

    India's Jindal Steel and Power is busy exploring next door to the Kaoua El Khadra iron ore project, conducting a program right up against Charter Pacific's Kaoua El Khadra tenement border.

    Kaoua El Khadra has similarities with the Lebtheinia iron ore deposit owned by Sphere Minerals in Mauritania, which was acquired in a corporate takeover by Xstrata, now GlencoreXstrata. The latter is developing the project.

    The 2.6-4.4 billion tonne exploration target at Kaoua El Khadra Permit, is likely to be just the start, and we wouldn't be surprised based on early work to see the iron ore endowment grow significantly, which would explain the corporate interest in Charter Pacific.

    Which is all very interesting as Charter Pacific is currently undertaking a 2 for 3 renounceable rights issue to raise up to $3.29 million which opens on 6 August for their current program to commence a drill program at the Kaoua El Khadra iron ore project.

    India needs iron ore

    With the Indian government closing down many of the domestic iron ore mines in India last year and expansion plans for some the major steel manufacturers requiring increased supplies of iron ore to meet future targets, Darshak's trip to India is well timed.

    With India moving from the world's 3rd largest exporter of iron ore to a net importer to ensure supply to its steel makers there would appear to be a need for India's steel makers to secure long term access to substantial high quality iron ore supplies to meet their future steel manufacturing targets.

    This places Charter Pacific in a good position to deal with the Indian steel makers to either secure a J/V partner, off take agreement for iron ore, development funder or even an outright purchaser of its Kaoua El Khadra iron ore project.

    Results to date from Kaoua El Khadra iron ore project - promising

    Davis Tube Recovery (DTR) concentrate analysis showed low levels of deleterious components SiO2, Al2O3, P and S assays and a high of 69.76% Fe concentrates, which is consistent with the previous rock chip sampling undertaken.

    Early-stage iron ore exploration has revealed high grade results that show potential for a marketable concentrate to be produced at relatively low cost.

    Therein holds the key to why GlencoreXstrata is spending $40 million to develop Sphere Minerals' Lebtheinia iron ore deposit.

    There are geological similarities between GlencoreXstrata / Sphere's Mauritania Lebtheinia iron ore deposit and Charter Pacific's Kaoua prospect surface expression, in that the project areas are largely flat. This would ease the development of necessary infrastructure.

    Research has shown that production costs in Mauritania using a dry sinter process are approximately $32 per tonne
    (GlencoreXstrata), which are lower than operating costs for Pilbara FOB iron ore.

    The sinter feed route favoured by other iron ore developers in West Africa (dry grinding as compared to wet grinding and pelletisation) has the advantage of lower pre-production capital expenditure.

    Mauritania - a large producer of iron ore

    Mauritania already hosts one large iron ore producer, the Societe' Nationale Industielle et Miniere' (SNIM) which mines at Zoueratte, north-northeast of Charter Pacific's Kaoua prospect.

    It produces around 15 million tonnes of iron ore per year. Interestingly, it operates the longest iron ore train in the world between Zouerate and Nouadhibou in Mauritania.

    Other large iron ore discoveries include the 2.5 billion Lebtheinia Iron Deposit, belonging to GlencoreXstrata after its acquisition of Sphere Investments.

    TransAfrika Resources has an estimated 1.2 billion tonnes of iron formation identified on the Kaouat Iron Ore Project, south of Charter Pacific's Kaoua's project.

    Interest from Europe

    Interest in Charter Pacific's Kaoua project has also been expressed from parts of Europe, which is not surprising given these are traditional markets for African mineral producers.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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