Key Facts
- CoTec ownership in MagIron
- Approximately 17% fully diluted equity interest
- Study completion
- Completed by Primetals Technologies
- Production capacity
- Approximately 2 million tonnes per annum of granulated pig iron
- Infrastructure replacement value
- Approximately US$1.3 billion
- Potential U.S. merchant pig iron demand coverage
- Up to half of current requirements
- Facilities location
- Minnesota (iron ore resources and concentrator) and Indiana (pelletizing facilities)
Background
CoTec Holdings Corp. (TSXV:CTH)(OTCQX:CTHCF) announced that MagIron LLC, a US-based company in which CoTec owns an approximately 17% fully diluted equity interest, has completed a positive pig iron concept and economic study. The study covers MagIron's iron ore resources and concentrator in Minnesota and pelletizing facilities in Indiana.
The study was conducted by Primetals Technologies, a global leader in metallurgical plant solutions and iron and steelmaking technologies. It evaluated the development of large-scale granulated pig iron production integrated with MagIron's existing facilities.
Current Situation
The study confirms three technically credible pathways to produce approximately two million tonnes per annum of granulated pig iron at MagIron's facilities. This supports MagIron's strategy to become a key supplier of high-quality iron units into the United States.
MagIron intends to advance domestic pig iron production, subject to more detailed technical and feasibility studies, while retaining flexibility to produce and sell DR-grade pellets. This allows MagIron to respond to customer requirements and market conditions using the same resource base and existing infrastructure.
The indicative economics are described as compelling, with MagIron able to leverage existing infrastructure with an aggregate replacement value of approximately US$1.3 billion.
| Parameter | Value |
|---|---|
| Production capacity | 2 million tonnes per annum |
| Infrastructure replacement value | US$1.3 billion |
| CoTec ownership | 17% |
| Potential U.S. merchant pig iron demand coverage | Up to half |
Impacts
CoTec CEO and MagIron Executive Chairman Julian Treger stated that the positive result highlights advantages difficult to replicate: a very large domestic iron ore resource, substantial existing processing and pelletizing infrastructure, access to established logistics, and the ability to produce high-quality, low-phosphorus iron units.
At an initial production level of approximately two million tonnes per annum, MagIron believes it could meet up to half of current U.S. merchant pig iron requirements. This could potentially affect U.S. steel industry supply chains by providing a domestic source of pig iron and DR-grade pellets.
The study's outcomes may influence MagIron's operational decisions and CoTec's investment value, though CoTec notes the information has not been independently verified.
Future Outlook
Scenario analysis: The possibilities below are not certain predictions.
If further technical and feasibility studies confirm the study's findings, MagIron could be uniquely positioned to supply both DR-grade pellets and pig iron, providing flexibility to respond to customer demand and market changes.
Over time, MagIron's resource base could provide optionality to expand production beyond the initial two million tonnes per annum, potentially increasing its share of the U.S. merchant pig iron market.
However, actual results could differ materially due to risks such as resource and reserve risks, environmental costs, labor shortages, supply and price fluctuations, project delays, and extreme weather conditions. The company assumes no responsibility to update forward-looking statements except as required by law.
Source: californiatelegraph.com
