http://www.tbnewswatch.com/default.aspx
THUNDER BAY — Mining is an expensive industry. Just ask KWG Resources, which received good news from the U.S. Patent Office’s International Searching Authority earlier this month. The office found that KWG’s process for using natural gas and an accelerant, rather than a standard electric arc furnace, to process chromite is a novel one.
Vice-president of exploration and development Moe Lavigne said the idea could cut costs by more than half for its proposed operation. It could also have the potential to license the process to mines around the world but it hasn’t had the chance to get the process out of the lab yet.
“We haven’t tested it on chromites from around the world yet but we suspect that it’ll be applicable to any chromite deposit on the planet,” he said. Typically an electric furnace needs to burn at around 1,700 C in order to separate chromite, made of chromium, iron and oxygen. KWG’s process could do the same using natural gas at 1,200 C. That saves energy costs but also equipment costs by burning at a lower temperature.
“At 1,700 C just about everything melts,” Lavigne said. The footprint for the plant is also about a quarter of the size of an electric furnace like the one proposed by once KWG senior partner Cliffs Natural Resources. Electricity prices means a typical plant would likely be built in Quebec or Manitoba where prices are cheaper but natural gas is the same price across the country.
“Natural gas allows us to build the plant anywhere there is natural gas,” he said.
KWG wants to build a pilot plant, possibly near Nakina where its proposed facility would one day also be built, in order to test the idea with between 10 and 100 tonnes of chromite from its Black Horse deposit in the Ring of Fire.
That’s a $20 million test at a time when the stock market isn’t interested in mining. Lavigne said companies with good projects are looking to Europe for capital.
“Something needs to happen to spark the stock market back to life,” he said.
Money is needed for exploration. KWG thinks the Black Horse deposit could be the largest in the region but every deep drill hole can cost up to $500,000 to find out. That’s likely another $20 million.
KWG has plans to explore this winter but only if the funding is there. The company, along with Noront Resources, are the only ones active in the Ring of Fire and the last exploration was done by KWG last winter.
“There is nothing,” Lavigne said of exploration right now. “There’s nobody up there.”