MTE hits Steelpoort – a mining hotspot in Limpopo

Compiled by Sharyn Macnamara

MTE will visit Steelpoort on 31 August this year and expects a bumper expo. Last year the mining town saw 78 exhibitors showcasing PGMs and chrome mining solutions to 325 mining professionals – and this year’s show promises more.

Located in the Sekhukhune District Municipality in the Limpopo province bordering Mpumalanga, the PGMs and chrome mining and smelting industry in the town packs a big punch in the region’s contribution of around 30% to the provinces GDP. Vanadium is yet another resource in the area that has attracted the MTE team’s interest.

The Mining and Technical Exhibition’s (MTE) visit over the past +20 years has annually answered the call of operations like Eastern Chrome Mines (ECM), Tubatse Ferrochrome, Lion Ferrochrome, Dwarsrivier Chrome Mine; Two Rivers Platinum; Thorncliffe Chrome Mine, Helena Chrome Mine; Magaren Chrome Mine; Mototolo Platinum Mines; Booysendal Platinum Mine; Mototolo Concentrator; Modikwa Platinum Mine; Marula Platinum Mine and TAS Samancor Smelter for new innovative solutions to assist in driving efficiency and productivity in an energy, logistics, and water constrained economy – with addition illegal mining and security woes in the region adding more complexity.

Resource focus in the area

While one of the team’s newest interests in the area is the Steelpoortdrift (SPD) vanadium project, which is an open-pit mining development by Vanadium Resources (formerly Tando Resources) and one of the biggest and highest-grade vanadium deposits in the world1, the importance of this area mainly lies in its rich chrome base.

The importance of chrome to SA

Chrome, known for its hardness and corrosion resistance, is essential in the production of stainless steel ­­­­and is a particular focus for miners in the area. The Minerals Council South Africa says that, nationally, the mining of chrome ore supplied almost 19 000 direct jobs in 2022, “From 2021 to 2022 production volumes of the resource were expected to have increased by 5.6%, while the value of total sales is expected to have soared by 50.3% on account of higher international commodity prices, while comparing 2019 to 2022, production would have increased by 9.9% to 19.4 million tonnes.”2

The automotive industry’s need for higher strength steel, specifically advanced high-strength steels (AHSS) and high-strength low-alloy steels (HSLA) has resulted in an increase in demand for vanadium.

Global significance of vanadium

The vanadium in the area is adding to the importance of this region, based on the fact that the automotive industry’s need for higher strength steel, specifically advanced high-strength steels (AHSS) and high-strength low-alloy steels (HSLA) has resulted in an increase in demand for vanadium.3 Vanadium contributes to the strength and economic efficiency demanded in materials for vehicles, offering the most economical and highest strength-to-weight ratio to minimise fuel consumption.

Around 90% of vanadium is used as an alloying element in steel and is the most used microalloying element in high strength air-cooled forgings for automotive components in the drivetrain and chassis of cars and trucks, such as crankshafts, connecting rods and steering knuckles. It is also used in automotive hot and cold rolled strips to increase strength and improve ductility.

The resource is added to a wide range of automotive steels, including dual phase, twinning-induced plasticity and transformation-induced plasticity, precipitation hardened ferrite pearlite, press hardened, hot formed, bainitic, ferritic and martensitic steels, to increase the strength of these steels and also to make these steels easier to cast and roll.

Although electrification is expected to lower the demand for automotive components used only in ICE vehicles such as conventional transmissions, engines and fuel injection systems, demand for certain chassis components, powertrain parts and thermal management components used in EVs are expected to increase as a result of electrification.

In addition to this, according to statistics from Vanitec, the global not-for-profit vanadium industry organisation, energy storage became the second-largest consumer of vanadium in 2022 for the first time, surpassing chemicals and catalysts, and titanium alloys. Steel continues to be the largest consumer of vanadium, however, this shift in the use of vanadium in energy storage highlights that the transition to a more sustainable and resilient energy future is well on its way.

The increased use of vanadium in energy storage is driven by increased consumption of vanadium in Vanadium Redox Flow Batteries (VRFBs) – a proven and rapidly growing large-scale energy storage technology that can store large amounts of energy produced from renewable sources to provide on-demand, round-the-clock, carbon-free power.

Though vanadium use in energy storage is small as a percentage of global vanadium consumption at 4.3%, its growth from 2021 to 2022 marks a 42% year-on-year increase.3

Global management consulting firm, McKinsey & Company, projected that worldwide demand for EVs, including battery electric vehicles, plug-in hybrid electric vehicles and fuel cell electric vehicles, will grow sixfold from 2021 through 2030. Unit sales are expected to increase from 6.5 million to roughly 40 million over that period.

Furthermore, McKinsey outlined that new regulatory targets in the European Union and the United States are seeing countries target an EV share of at least 50% by 2030, with several other countries also announcing accelerated timelines for ICE sales bans in 2030 or 2035. Moreover, some automotive OEMs have noted their intention to stop investing in new ICE platforms and models, with many declaring specific dates at which they planned to end ICE vehicle production.

While the global shift away from ICE vehicles to EVs would require fewer forged engine components, it would require high-strength steels for vehicle bodies. This is because customers worldwide are demanding safer cars and governments are more strictly regulating collision safety ratings.

On the other hand, despite the broad use of vanadium in automotive components, the growing demand for EVs means that the market for some vanadium-containing forging steels used for ICE vehicle components such as crankshafts and conrods will decline in the medium term.

Conversely, the demand for vanadium in AHSS for use in vehicle bodies is expected to grow on increased EV demand, possibly due to the high strength-to-weight ratio of stronger steels. Higher strength steels can also be used to improve the crash test safety standards of EVs, owing to the heavy weight of an EV battery.

Despite shifts in the use of vanadium in steel, Vanitec estimates that demand for vanadium in steel will increase at a CAGR of 2.7%, reaching 136 000 tonnes in 2030.

According to David Crowther, technical consultant at Vanitec, it is critical that steel companies employ the latest steel production technologies, to enable them to reduce production costs and produce the most technologically advanced steels demanded by customers. As steel production technologies continue to develop, it is vital that vanadium alloyed steels can be adapted for production using these latest technologies. This could be an area of continued future demand growth for vanadium as new developments are made in advanced high strength steels, says Crowther.

The MTE Steelpoort show is a highlight in the company’s calendar precisely because the mining and smelting in this area is intrinsically part of South Africa’s economy and the future solutions to global energy transition goals. If you are a supplier to this area, be sure to contact the MTE team to book your space at one of its most popular events in the year. If you are a visitor from a local operation, remember entrance to MTE expos are free of charge.

Contact Andrew Macnamara on +27 (82) 720 0083.

Industry chrome challenges currently:

Per the Minerals Council South Africa, the industry has seen an increase in the prevalence of crime on the chrome rail line which is adversely impacting on exports and resulting in increased expenditure in security by chrome producers. “In addition, an inadequate supply of locomotives is yet another challenge, which has prevented South African chrome producers from taking advantage of high international commodity prices. Inadequate port handling equipment at some of the ports is also negatively affecting export volumes.”

Furthermore, illegal mining at industrial scale is a problem that deprives the fiscus of tax revenue, says the Minerals Council South Africa. “Local chrome beneficiation is also constrained by inadequate electricity supply. Coupled with double-digit annual electricity tariff increases the local industry has been losing global competitiveness, especially in ferrochrome production and export.”

Industry outlook:

“Chrome export volumes have performed surprising well by largely switching logistics away from inefficient South African rail and port facilities to road via the Komatipoort border post to Maputo harbour. However, road transportation comes at a premium of roughly 40% compared to rail use,” notes the Minerals Council. Added to this complexity is the fact that the roads are slowly deteriorating and, due to high traffic, queues are slowing down delivery times. “From Mozambique the chrome is exported to China. Crime (cable theft and vandalism) continue to plague the chrome line and, while producers have pooled resources to try and secure the line, this is not sustainable for the industry,” concludes the Minerals Council South Africa.

Steelpoortdrift (SPD) vanadium project:

Vanadium Resources received mining authorisation for the SPD project from the Department of Mineral Resources, South Africa, in July 2018 and completed a pre-feasibility study in June 2021.1

The Steelpoortdrift Vanadium Project is host to one of the world’s largest undeveloped Vanadium deposits with a Mineral Resource of 680Mt at an average in situ grade of 0.70% V2O5 (4.74Mt contained metal). The project is expected to start producing vanadium concentrates in the fourth quarter of 2023, while the start of vanadium pentoxide (V2O5) flake production is expected in the first quarter of 2024.

In October 2022, the company released a Definitive Feasibility Study (DFS) confirming the project’s potential to be a world-class, large scale and low-cost vanadium producer with competitive OPEX and CAPEX metrics (refer ASX announcement 4th October 2022).5 The 25-year project comprises the open pit mining of titaniferous vanadium ore, primary treatment of the ore through an onsite concentrator (using magnetic separation), and secondary treatment of concentrate through a Salt Roast Leach (SRL) plant to produce a >98% V2O5 flake.

The DFS demonstrated a two-phase operation which will produce a total of 484 000t of V2O5 flake over a 25-year period, providing a post-tax NPV7.5% of USD1.21-billion (attributable share of USD0.9- billion) with an IRR of 42%. The project will generate annual free cashflows of USD152-million with a short payback period of less than two years due to the high-grade nature of the mineralisation and the low CAPEX requirement of USD211-million.

Location, geology and mineralisation5

The Steelpoortdrift (SPD) Vanadium Project is located approximately 30km south-west of the Steelpoort town in the Bushveld Igneous Complex (BIC) of South Africa in an analogous geological setting to the current mining operations of Rhovan (Glencore), Vametco (Bushveld Minerals) and previous mining operations Mapochs (International Resources Ltd) and Vantech (Xstrata). Vanadium mineralisation in the Bushveld Complex is higher grade than most of its global peers. Mineralisation is hosted in vanadiferous titanomagnetite layers which occur at the same stratigraphic level across the entire complex and can be traced for almost 400km.

The Bushveld Complex is a geologically unique igneous complex endowed with deposits of PGEs, chromium, vanadium and magnetite.

Vanadium mineralisation at the Steelpoortdrift Project is located close to the contact between the Upper Zone and Main Zone of the Bushveld Complex and adjacent to the Steelpoort Fault. Mineralisation is hosted in three zones, the Upper Magnetite Zone, Intermediate Magnetite Zone and Lower Magnetite Zone, which dip shallowly (10-12deg) to the west. The shallow dip and outcropping nature of mineralisation is favourable for mining as it can be mined by open pit techniques and requires less waste to be mined.

References:

1. https://www.nsenergybusiness.com/projects/steelpoortdrift-vanadium-project/#
2. Minerals Council South Africa, Facts & figures pocketbook 2022: https://www.mineralscouncil.org.za/downloads/send/18-facts-and-figures/1996-facts-and-figures-2022-pocketbook
3. Vanitec press release titled: Demand for vanadium in the automotive industry, a double-edged sword.
4. Vanitec press release titled: Energy storage now the second largest consumer of vanadium: Vanitec
5. https://vr8.global/project/steelpoortdrift-vanadium-project