Thanks, Irish.

We need the good doctor to climb down from his airship and show us his academic prowess.

Economics 101

The Tetra Tech WEI Inc. study estimated the capital costs for a roadway at $1.052 billion and a railroad at $1.561 billion. If 3 million tonnes per year were shipped, operating costs are estimated at $10.50 per tonne for the railroad and $60.78 per tonne for trucking on the road.

But let's not split hairs.

Hauling the chromite concentrate out by truck costs $60/t, by train, $10/t, a difference of $50. Chromite concentrate is only worth about $200/t, while ferro-chrome is about $2,370 CAD/t this month. Refining chromite concentrate into ferro-chrome using natural gas costs less than 50 percent of the cost of using electricity in the refining process.

Long gone are the mismanaged days of Cliffs life-of-mine realized price assumptions:





Cliffs assumed the ROM chromite ore divided into 33.2Mt/y waste rock (mine strip ratio 8:1) [ROF] + 4.15Mt/y crushed & filtered chromite-bearing unprocessed ore [ROF] = 2.3Mt/y reduced & concentrated or Direct Shipping Ore (42% standard grade) (DSO) [ROF] which then would have gone down the north/south transport corridor to (1.1Mt/y DSO [World] X .459 or 505Kt/y FeCr) + (1.22Mt/y DSO X .459 = 560Kt/y FeCr (58% standard grade) [Sudbury smelter]) = 1.065Mt/y FeCr X 4 ≐ 4.26Mt/y milled stainless steel.

As long as we are fantasizing, implementing KWG's rail solution might of affected 3/4 of the 65% concentrate transport cost. In other words, 1/4 of the 65% 1,100 ktpa concentrate transport cost would be attributed to 'Anaconda Base Terminal to Asia' and some from ground to mine concentrator. [$200 X 65% X75% = $97.5 X ($10.5/$60.78) = $16.84 then, $200 - $97.5 = $102.50 + $16.84 = $119.34 ]. Then gas over electricity, [5% X 50% = 2.5% X $200 = $5] would see a [$119.34 - $5 = $114.34 Total Delivered Cost per Ton Concentrate]. Thus $200 price - $114.34 cost = $85.66/t EBIT?

Then suppose KWG's new ferrochrome refining method applies to all of the 22% (heavily subsidized by the Ontario ratepayer) electricity FeCr costs or [$.70 X 22% X 50% = $.077 - $.70 = $.623 total delivered cost per lb FeCr].

At this point, one has to step back and re-calculate the equation.

KWG's new natural gas chromite reduction method, I coined as 'Gas Super Reducer', (GSR), directly produces reduced iron (DRI) and chromium (Cr) into a new alloy using natural gas. (It reduces the oxides of both chromium and iron contained within the chromite ore.)

This means there are not two processes, rather only one. The GSR must directly reduce ROM chromite ore to a 58% standard grade. Therefore, the GSR chromium/iron alloy pellets can form part of the charge of a conventional SAF furnace producing ferro chrome, as batch or continuously charged components of the steel making and pellets can be preheated.

The new GSR facilitates the progress of the reduction reactions to such an extent as replacing the entire need for an electric concentrator. Reactions commence at 900°C when the suitable accelerant is used to enhance the reactions - substantially lower than is usual for chromite ores. The GSR can produce metalized levels of chromium and iron of 80% or more. Time required for the reductants to convert the oxide ore to alloy was substantially less than one hour - much faster than established direct reduction methods have produced.

For our next lesson, perhaps professor Robinson can correct our calculations when both processes are synergized?