MIL Magnesium Smelter Technology

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MIL Magnesium Smelter Technology

• July 2008

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Low cost production of Magnesium requires

• Robust electrolysis process
• (Dow produced 3.5 million tonnes Mg)
• Low cost High Voltage power
• Access to Mg ions
• Low cost labour

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Process Flowsheetfor magnesite
HCl Leach
Magnesite
Solids removal
Brine
CaSO4 Gypsum
Mg ions
HCl
Acid Plant
Brine purification
Markets
BaSO4 Barytes
Cl2 Gas
HQMA
MgCl2
Dryer
Casting
Electrolytic Smelter
Mg Metal
MgCl2 Prill
Alloying metals
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MIL Magnesium Smelter Technology

• Based on Dow process knowledge
• MIL engineered technology to design, construct
  and operate
• Included Dow improvements
• MIL Technology encapsulated in Principals
  Project Requirements (PPR)
• Marketing studies
• Demand increasing
• (Mg price now gt6,000 per tonne)

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Dow Process

• Electrolysis of magnesium chloride developed 1916
• Seven smelters built and operated
• Produced 3.5 million tonnes magnesium metal and
  alloys
• Last two smelters in Texas USA closed 1998 after
  hurricane damage
• Licensed process knowledge to MIL

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Dow Continuous Improvement
2.5 per annum sustained productivity improvement
over last 40 years
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Dow Process Knowledge

• MIL has exclusive global license to
• 600 Technical reports, specifications, procedures
  and patents
• 10,000 drawings
• Operating data for two smelters
• Dow approval to use ex-Dow engineers

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Technology Engineered by MIL from Dow Knowledge

• Principals Project Requirements (PPR)
• Developed from Dow knowledge with ex-Dow
  Engineers
• Conceptual Engineering
• 5 volumes describe smelter
• For magnesite, design data derived from pilot
  plant
• Feasibility Study

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MIL Adaptation from Dow

• Maintain integrity of Dow Process
• Latest designs and improvements from Dow
• Dryer - Cells - Acid furnace
• Eliminate Dow limitations
• Dryer fan capacity
• Cell current
• Metal removal and handling
• Latest environmental and safety technology

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Principals Project Requirements (PPR)

• Basis for Engineering Design and Construction
• Series of 5 volumes, one for each process area
• Process description
• Mass balances
• Design criteria
• Equipment lists
• Process Flow Diagrams
• Piping and Instrumentation Diagrams

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Capacity 100,000 tpy magnesium metal

• Optimised to suit
• - Power, Labour and Construction Costs
• 100,000 tpy Mg metal (108,000 tpy alloy)
• Basis Dow operating data
• Construct in 2 stages (50,000 tpy Mg metal)
• - 72 electrolytic cells per stage

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Smelter Layout
Administration, Maintenance, Warehousing
Dryer
Casting
Leach and Purification
Acid plant
Cell House
HV Sub station
Magnesite Stockpile
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Smelter Perspective
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Capital Estimate 2006

• Consultants estimated civil, structural,
  electrical, fabrication and erection
• Vendor pricing for process equipment
• Package pricing for Dryer, Acid Plant and HV
  Substation
• Reviewed by Independent Engineer

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Estimates Updated in 2008 for Middle East

• 100,000 tpy Mg metal in two stages
• Capex stage 1 USD 500 million
• Capex stage 2 USD 300 million
• Capex stages 1 and 2 USD 800 m ( 25)
• Opex ltUSD 0.80 per pound Mg

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Major Consumables (per year)

• Electricity
• (2,200,000 MWh)
• MgO (15,000 t)
• H2SO4 (12,000 t)
• BaCl2 (12,000 t)
• HCl acid (6,000 t)

• Natural Gas (4 PJ)
• Magnesite (400,000 t)
• NaCl (2,000 t)
• Graphite anodes (5,600 t)
• Aluminium (7,200 t)
• Zinc (400 t)

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Opportunities

• By product recovery and sale
• Carbon Dioxide
• Residue (high gypsum, CaSO4)
• Barytes (BaSO4)

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Financials 2008for 100,000 tpy Magnesium

• Revenue gtUSD 580 million per year
• Direct costs ltUSD 180 million per year
• Surplus gtUSD 400 million per year
• Service capital investment
• Profit

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Independent Engineer

• Technology Low risk
• Capacity Medium risk
• Opex Low risk
• Capex To claimed 25
• Implementation Plan Appropriate

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Magnesium Ions

• Magnesite MgCO3 contains 25 Mg
• Lower capital and operating costs
• Studied by Dow
• Sea water and dolomite
• Used by Dow
• Carnallite KMgCl3.6(H2O)
• Serpentine magnesium silicate rock

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Magnesite Supply

• Quality
• 90 cryptocrystalline magnesite
• Reactive in hot hydrochloric acid
• Resource
• Require reserve for 25 years operation, i.e 10
  million tonnes

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Smelter Location- Selection
Criteria

• 220 kV electric power grid
• Magnesite
• Natural Gas
• Process and Cooling Water
• Residue disposal
• Skilled low cost labour
• Land
• 500,000 square metres for smelter
• 1,000,000 square metres for residue storage
• Infrastructure for support services

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Environmental Impact Assessment

• Design to international standards
• Equator Principles
• Pollution control
• Solids inert
• Liquids low volume and natural salts
• Gas (Cl2 and HCl) easily scrubbed
• EIA approved for Egypt and Australia

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Environmental Performance

• Key aspect of EIA is emissions
• Gaseous emissions CO2, Chlorine and HCl
• CO2 produced in leach tanks
• Solid and liquid wastes are minimal and inert
• Engineered to decrease emissions to meet Equator
  Principles
• World best practice project

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Risk Assessment

• Low technical and commercial risk
• Technology
• Dow process proven robust
• Dow knowledge effectively transferred and
  understood by MIL
• Capex
• 25 accuracy
• Packages well defined

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Risk ..

• Opex
• Based on Dow consumptions
• Wet plant based on pilot plant
• Market
• Demand for Mg continues to grow

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Way Forward

• Reactivation Plan includes
• Smelter location power and magnesite
• Engineering for Definitive Cost Estimate ( 15)
• Prepare and approve EIA
• Bankable Feasibility Study
• Financial Close
• Construct and commission

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Conclusion

• MIL Magnesium Smelter Technology
• Low risk, commercially ready package to complete
  engineering
• Environmental impact not detectable
• Develop long term profitable venture