Estimating Magnetite Processing Costs
July 2017
AME’s innovative EVO methodology captures the major segments of each site’s process flowsheet and allows detailed analysis of crushing, milling, gangue rejection and consumable costs and energy consumption. We have compared processing costs by region and segment within a set of 107 magnetite projects globally.

This involved taking into consideration geological characteristics, and percentage of size reduction processes across beneficiation circuits, in order to compare operational costs and energy consumption across regions. Magnetite deposits contribute to about one-third of the world’s primary iron ore feed. They have naturally lower iron grades than haematite DSO deposits and require more intensive processing and higher processing costs to upgrade the ore to a saleable concentrate.

Beneficiation circuits in magnetite operations involve upgrading of ore with iron content of 10-35% Fe to a concentrate with grades between 60-70% Fe and involves stages of mineral liberation (crushing, grinding, accounting for approximately 69% of processing costs), gangue mineral rejection (screening, magnetic separation, flotation) and stockpile management (conveying). Processing costs for magnetite and taconite sites account for 20% to 70% of site operating costs globally, compared to 15-20% for the simpler haematite beneficiation circuits for which ore grades are much closer to final product grades. We find that operating costs for magnetite circuits are dependent on factors including power intensity, size reduction in the milling process and the age of processing plant infrastructure.

Data Collection

EVO process flow sheet data is collected from reported flow sheets and interpreted from company reports, government documents and websites. Satellite images are reviewed to indicate the layout of each plant. This data is evaluated to model mineral processing circuits, equipment and process volume flows to construct an EVO engineering model for each of the iron ore operations in AME’s database. An example of a detailed flowsheet, used in developing an EVO ore processing model is shown below. EVO includes an extensive equipment data base so that specific equipment parameters can be incorporated in the flow sheet model – for example, the Nordberg 8.84 x 3.96 m ball mills used at Grange Resources Savage River Operations, in Tasmania. This level of detail provides granularity and insight into the cost contribution of each processing segment. 




Cost Components Analysis

EVO engineering models from the AME database were analysed for the contribution of each processing segment in magnetite beneficiation within a set of 107 magnetite projects globally. The regions covered are shown in the chart below.

Global processing costs range from around US$5/dmt to US$16/dmt or 20-70% of the total on site operating costs, which are dependent on volume of throughput through a beneficiation circuit, degree of size reduction required and age of processing infrastructure.

As expected, the highly energy intensive size reduction segments of crushing and milling account for 60% of the average global cost. Crushing comprise around 10% and milling or grinding 50%. Typical size reduction for magnetite operations is from a ROM feed size of 0.4 meters to a final product size of 45 micron. The energy consumption rate required to achieve a size reduction can be compared using the Bond Work Index (BWI). Bond Work Indices were used in the EVO model to calculate the energy consumed in the circuits. Bond Work Index for magnetite ores typically range from 10kWh/t to 16kWh/t globally.

Subsequent separation processes including sizing, screening, classification, and magnetic separation account for around 20% and dewatering and filtration to produce a saleable the final product and tails was found to represent on average 10% of total operating costs. Material handling in the form of conveyors, stackers and reclaimers accounted for approximately 10%.

Energy consumption was determined to be the largest contributor to cost variation between beneficiation circuits globally. Two main factors drive energy consumption, the final grind size to achieve adequate liberation and the input material grade controlling the quantity of material that must be processed in order the final product volumes. Finally, the age and technological levels of processing plants across particular regions, influenced costs with older beneficiation plants commonly found across China and the United States were estimated to have considerable higher maintenance costs as opposed to more modern plants typically found across Australia and Brazil.



Regional Variations

Some notable regional variations were observed from the analysis. Chinese and Russian/Ukrainian beneficiation circuits average milling costs are approximately US$3.60/t. Site typically grind magnetite particles from a crushed size of 6000 micron (6mm) down to 75 micron.

The milling costs associated with United States operations are typically higher at approximately US$6.01/t, 53% higher. These milling circuits are typically configured as 3 stage grinding circuits; such as Cliff Resources’ Hibbing Taconite Operations in Minnesota United States. These circuits consume more energy to produce an ultra-fine product of sub 50 micron. As opposed to the coarser 75 micron product produced from two stage milling circuits commonly found across China Russia and the Ukraine. Total milling costs associated with this region are also higher, as most taconite orebodies typically have a higher BWI of 16kWh/t. This results in milling circuits across the region consuming approximately 7% more electricity at each milling stage to produce an ultra-fine product.

By contrast however Brazilian beneficiation circuits utilise greater size reducing in the crushing circuit prior to milling. Crushing circuits at these mines generally reduce feed grade particle size down from 5,000mm to 3mm as opposed to 5,000mm to 6mm reduction common in China. Milling within these process plants typically reduces the particle size of material from 3,000 micron down to approximately 85 micron. Beneficiation circuits across Brazil typically have Fe ROM grades of 40% as opposed to a global average of 20-30%. This has allowed then to undertake greater size reduction crushing rather than milling to liberate magnetite ore. This results in average milling costs of US$1.8/t. While Brazilian operations benefit from reduced size reduction costs these circuits typically have multiple stage classification to increase the final iron content in the concentrate and reduce the silica and alumina content by removing clay slimes. The additional classification process increases the cost to US$1.09/t as opposed to the global average of US$0.50/t.


Further Development

The new EVO costing models are continually being refined across the iron ore industry. Complete EVO models will include assessment of onsite equipment type, units and utilisation. The final models will cover the entire onsite mining and processing segments and will provide significant granularity and insight into the cost contribution of each piece of equipment on site and their cost position in the global market.