Focusing On The Futurehttps://www.criticalstrategicmetals.com/focusing-on-the-future/
Why Molycor Gold Corp’s plans to build a World Class magnesium facility in the U.S. should be on your radar
Anthony David: How did an exploration company exploring for gold end up with a magnesium project?
Ed Lee: In 2007, the Company began drilling to test gold anomalies between the shale formations and intersected a large dolomite block. The results for the precious metals didn’t amount to much but there were consistent grades of magnesium listed in the assay sheets.
Anthony: Well dolomite is a common rock and can be found most anywhere. What differentiates the Tami – Mosi dolomite from others?
Ed: The Company sent samples to Teck Global Laboratories for assays and composition testing and the results returned a high purity form of dolomite almost identical to the national standards.
Anthony: So how did the Company identify the process?
Ed: We engaged Hazen research to provide a Phase 1 study identifying the different processes for producing magnesium. Molycor’s Consulting Team later confirmed the process path.
Anthony: How did a junior Company like Molycor manage to assemble such an impressive career magnesium Team?
Ed: We received a magnesium consultant to contact from Hazen and a relationship was established. From there contact was made to the various individuals describing the project and what it has to offer. Needless to say the project sold itself as the people involved now see the upside potential the project possesses.
Anthony: How was the process defined regarding the parameters and specifics agreed upon?
Ed: The project requirements were laid out and the Team collectively defined the design criteria to reflect the potentials for zero waste, reduced emissions, reduced footprint, steady cost controls, low capital risk and higher efficiencies.
Anthony: So what are the uses for magnesium?
James C. Sever: Magnesium is used to make high strength light weight castings in aerospace and automotive applications. The growth in consumption has developed as structural components for electronic cameras, computers and mobile phones. Without magnesium as the alloying agent to strengthen aluminum, structural applications ranging from I beams to extrusions would not be possible. Magnesium as an alloying element provides the strength for aluminum beverage containers. Magnesium is used in the steel industry to remove sulfur from the molten metal. Without this treatment, steel would be subject to brittle failure at low temperatures. Most of the things we take for granted in our modern world would not be possible without magnesium.
Anthony: Has the magnesium market changed over the years?
James: The world wide sale of magnesium has steadily increased from 170,000 metric tons in the late 1990’s to almost 700,000 metric tonnes today. If sufficient suppliers come on line over the next 10 years to meet the demand without driving the price up, the market is expected to continue to grow. One of the driving forces is the new CAFÉ standards for automobiles to meet by 2025.
Anthony: What sort of impact do you expect your project will have on the market?
James: Our predicted startup is 2016. At that time the automotive industry will be looking to increase the content of magnesium in cars in an effort to meet the new CAFÉ standards. All of our supply could easily be used for this purpose. In addition, it is our hope that we will be able to implement some of the predicted areas for improvement which would make our product competitive on the world market.
Anthony: How large is your proposed magnesium project?
James: We just completed a NI 43-101 Preliminary Economic Assessment study and by using a cost versus capacity model we determined that a facility producing 30,000 metric tons of 99.9% magnesium ingots per year would give us optimum productivity for scale of operation.
Anthony: Is your ore deposit capable of sustaining that level of production over an extended period of time – say 30 years?
James: We have inferred resources in excess of 412 million tonnes of high quality dolomite. The consumption of dolomite to satisfy the plants needs for 30 years continuous operation is approx-imately 9 million tons. This means we potentially have over 97% of the dolomite still be available for longevity and possible expansion.
Anthony: I noticed that your reduction facility is separated from your ore body by 120 miles. Isn’t it unusual to transport raw ore that far?
James: While performing the economic assessment it became evident that the quantity of raw materials needed to process the ore was much greater than the mass of ore itself. To reduce transportation costs it was necessary to locate the reduction facility on the I-80 corridor. This not only provides highway access but also main line rail access.
Anthony: Does your processing facility only produce magnesium ingot?
James: No this facility is actually three separate units that would normally stand alone. By generating our power through clean coal technology and making our primary raw material, 75% ferrosilicon, we are able to supply electric power at approximately half the cost of that available commercially. In addition we will have syn-gas (synthetic natural gas) and steam also available for use in the plant. Our reductant cost will also be significantly lower in cost and will be under our control to ensure the quality standards are met. By locating all three facilities adjacent to one another, we will be able to realize an increase in productivity. For example, in a conventional structure each plant would have a control room operator on duty 24 hours per day. That would actually require 12 people to do the job. By having a consolidated control room we should be able to operate with one operator reducing the man power requirement to 4 people. This concept applies to many other positions.
Anthony: We all know the market for commodity metals such as magnesium is subject to fluctuation and raising large capital can be a challenge. Do you have a strategic plan for operating the plant?
Ed: In the unlikely event that our production costs prevent or reduce the sale of the magnesium ingot under declining market conditions, the process used for making magnesium allows production to be cut back or even curtailed without incurring rebuild and restart costs when the market turns favorable. The interesting aspect is that we would have an economically viable ferrosilicon plant and a power plant. So in theory, if the magnesium price were to decline, the magnesium plant would be shut down and both the power and the ferrosilicon products could be sold into the market on a short term basis and the income used to cover our capital and fixed costs.
Anthony: Why are you using coal as a power source when there’s currently there an increasing supply of natural gas?
James: In the course of our economic assessment we made an analysis of utilization of natural gas. Yes the basic cost of the gas is favorable but the infrastructure necessary to deliver the gas to the plant is over subscribed. The resulting high transportation costs combined with the need for construction of a pipeline into the plant resulted in clean coal gasification being the most economic alternative.
Anthony: Are there other methods of producing magnesium?
James: Yes, historically two other approaches have been used:
1. The electrolytic method extracts the magnesium from the rock by leaching and conversion to magnesium chloride which is then electrolyzed, yielding molten magnesium and chlorine. This process is better suited to brucite or magnesite rather than dolomite and the issue of dealing with chlorine and chlorine compounds raise serious environmental issues.
2. Carbon can be used as a reductant of magnesium oxide but is very difficult to recover the magnesium from this process as the metal vapor generated in the reduction furnace has to be immediately quenched to a solid. If the magnesium is cooled during the liquid phase, the carbon monoxide present as a product of the reaction will immediately react with the magnesium producing magnesium oxide and soot. No commercial application of this approach exists today.
Anthony: Does your approach use new technology to produce magnesium?
James: On the contrary, to reduce risk we have designed our plant around a process that has been used since the late 1930’s. It is this process that was used to produce the magnesium formed into the engine block used in the VW beetle. Currently the process is in use in Brazil. Other than increasing the scale of the furnace and utilizing modern handling methods, the Brazilian plant is the same as the original Italian facility.
Anthony: So what are the next steps for Molycor?
Ed: Well, we are currently identifying manufacturers and vendors and drafting a detailed schedule for all the tasks needed to take the project through to complete the pre-feasibility report. This will assist us in keeping control of costs and timelines.
Anthony: How long will it take for you to complete the pre-feasibility report?
Ed: We are expecting approximately 14 months and it will begin as soon as the company raises the monies. Remember that we are building a vertically integrated facility. So we want to try and under-promise and over-deliver.
You can learn more about Molycor Gold Corp. and their Tami-Mosi project at: www.Molycor.com