Iron miner eyes North American steel producers: Rockex Mining updates study for open-pit mine, briquetted iron mill.

• Author: Ross, Ian
• Position: MINING

Sioux Lookout could get a huge economic jumpstart if a proposed $3.77-biliion open-pit iron mine and mill operation in northwestern Ontario comes to fruition.

While North American steel demand has been sluggish and iron ore prices have reached historic lows, Armando Plastino, CEO of Rockex Mining, insists his company is better able to ride the troughs of the cyclical steel industry with its hot briquetted iron (HBI) operation.

"Every iron ore product is tied to steel pricing. We think HBI will be a lot more insulated and we'll be able to market it to electric steelmakers. They do better through the cycle than the integrated producers."

Thunder Bay-based Rockex recendy updated its plans for a proposed $3.77-billion mine and mill project, centred on its Lake St. Joseph project and the Eagle Island iron deposit, located 100 kilometres northeast of Sioux Lookout.

The company has unveiled a new preliminary economic assessment (PEA) with an updated resource estimate identifying almost 1.3 billion tonnes of indicated ore at a grade of 28.38 per cent, enough for a 30-year mine life.

Other satellite deposits nearby could potentially offer up 400,000 to 500,000 more tonnes.

Algoma Steel (now Essar Steel Algoma) in Sault Ste. Marie, Plastino's former employer of 39 years, staked all the claims and once had plans to advance it in the early 1960s in partnership with Dofasco.

"This PEA suggests we have a very financially viable project," said Plastino, with a three to four-year investment payback of 19.5 to 22.5 per cent.

The company, with the Town of Sioux Lookout, was planning a major media event and webcast in the community on Nov. 3.

To raise the project's international profile, Rockex brought aboard Danieli of Italy last summer, a global leader in supplying steel mill technology, to help Rockex market the project toward securing a deep-pocketed development partner to advance the mine and mill.

That could come in the form of a major international steel producer seeking to secure a supply of raw material through an off-take agreement.

Plastino is well acquainted with Danieli, which designed and built Essar's direct strip production complex in Sault Ste. Marie during the late 1990s.

"They (Danieli) have extensive contacts in steel," said Plastino.

In exchange, Danieli would be the chief supplier for the HBI plant at a processing location to...