Bound for glory
With Africa emerging as the new iron ore frontier, Bellzone is blessed with not only access to globally significant resources, but also a path to market of which others can only dream.
The figures for Bellzone’s (AIM: BZM) flagship site Kalia are nothing if not impressive. Located in south central Guinea, the 100 per cent owned Kalia, scheduled to start production in 2015, boasts 1.46 billion tonnes of contained iron JORC resource and has the potential for a full production rate of 46Mtpa. With more than five years of in-country work already devoted to it, more than 200,000m drilled and 80,000 assays carried out, the estimated operating expense (opex) comes in at approximately US$42 per tonne.
However, before Kalia is bought into production, there’s the shorter-term “proving ground” of the Forécariah mine. Forécariah, both smaller and closer to the ocean than the Kalia project, is already in production with plans to ramp up to 4Mtpa in 2013.
A 50:50 joint venture with CIF (China International Fund), Forécariah already has a signed off-take agreement with Glencore and will thus represent Bellzone’s first cash flow in Guinea.
However, more important perhaps than even the deposits themselves is the access to infrastructure, which gives Bellzone a bright future. The normally thorny matter of getting the product to market is one that has worked out very much to Bellzone’s advantage in Guinea: not only does the company have an agreement in place with the CIF to fund and develop the rail and port infrastructure required to export the product of Kalia, but both the company’s sites lie on the only practical alignment for road or rail infrastructure in the area.
In a territory well known for a scarcity of infrastructure, access to a transportation corridor, particularly one that culminates in a deep-water port (Matakan Port, near the border with Sierra Leone) lends Bellzone a competitive advantage of which others can only dream.
Forécariah is first cab off the rank. Commissioning at the site commenced on schedule in Q1 of 2012.
Production commenced on the day immediately following government authorisation in May of 2012, with stockpiling at port and trans-shipping commissioning currently in progress. Forécariah is being fast-tracked, with the first shipment of ore from the deposit due as soon as Q4 2012. As Baldwin points out, this will be the first tonne of shipped ore since the country gained its independence – quite a milestone for a developing nation – but more important from Bellzone’s side is Forécariah’s status as a test case for the infrastructure build required by the larger project. The 76km of purpose-built haul road required to get product to market from Forécariah proves Bellzone’s ability to create the logistical means necessary for building future roads and railway lines in Guinea.
The result of a strategic relationship with CIF to fund and develop the rail and port infrastructure required for export of Kalia’s product, the transportation corridor to run from Forécariah to the port at Matakan will be a product of the joint venture partnership.
Bellzone retains exclusive development rights to the corridor, so the success of the first stage of what could ultimately be a 300Mtpa capacity rail system will demonstrate Bellzone’s ability to deliver such infrastructure. It will thus function as a “taste sampler,” says chief executive officer Glenn Baldwin, for the transportation corridor to run, eventually, to the larger and further distant Kalia project.
“Forécariah is about de-risking Kalia,” says Baldwin. “What underwrites Kalia is the amount of confidence you have in being able to deliver to market. You need road, rail and port. By doing the smaller program, we’ve proven we can successfully construct a mine and related infrastructure in Guinea. Forécariah is the taste sampler. While the two projects are fundamentally different in scale, they’re not different when you consider the component parts.
“While Forécariah is smaller, the nature of the infrastructure is the same. More to the point, the rail line to the smaller deposit is also the final portion of what will one day be the rail line to the larger Kalia deposit.”
An optimisation feasibility study expected by mid-2013 will give a clearer idea of the likely schedule for Kalia, while Forécariah is on the verge of securing a JORC as early as the end of 2012.