WORK ON TETE IRON ORE SMELTER TO BEGIN IN 2015

The Mozambican company Capitol Resources, which is a wholly owned subsidiary of the Australian Baobab Resources, has guaranteed that the construction of an iron ore smelter in Moatize district, in the western Mozambican province of Tete, will begin next year.According to a report in the Beira daily paper “Diario de Mocambique”, the Boabab exploration manager, Iain Plews, during a visit to the iron ore project by the Tete provincial governor, Paulo Auade, said that the company hopes that the smelter will be in production by the end of 2016.Exploration undertaken by Baobab has shown the existence of reserves of 750 million tonnes of iron. The company is investing a billion US dollars in the smelter, which will have the initial capacity to produce one million tonnes of pig iron per year. At a later stage, the company may also produce steel n Tete.Currently Capitol Resources employs 66 workers, 64 of whom are Mozambicans. Plews says that as the plans for the smelter advance, the number of people directly employed will rise to around 500.“We believe that this large scale industrial project will contribute significantly to the development of Mozambique”, he said.The Baobab licence area is immediately north of the open cast coal mines operated by Vale of Brazil and the Anglo-Australian company Rio Tinto.Previously, Baobab had claimed that its operations could see Mozambique hosting the largest pig iron operation in the world. By-products of the Moatize iron ore include vanadium and titanium slag. Further refining of the vanadium slag results in the production of ferro-vanadium alloy, which currently has a world marked price of around 25,000 dollars a tonne The Tete pig iron, vanadium and titanium project is 85 per cent owned by Baobab, with a 15 per cent share held by the International Finance Corporation (IFC), the member of the World Bank Group that focuses on the private sector in developing countries.