One of The Key Stages of the Dashkasan Iron Ore Project Has Been Launched

On July 11, in the capital of the People's Republic of China, Beijing, a subsidiary of AzerGold CJSC, Dashkasan Iron Ore LLC, and China's Sinosteel Equipment & Engineering Co., Ltd concluded a contract for the implementation of one of the key stages in building a production chain at the Dashkasan iron ore deposits complex. Director General of Dashkasan Iron Ore LLC, Jeyhun Aliyev, and General Manager of Sinosteel Equipment & Engineering Co., Ltd, Hua Guanglin, signed a contract for the preparation of a bankable feasibility study.

        As is known, iron ore deposits are being studied, and this sector is developing in the country according to the Decree of the President of the Republic of Azerbaijan dated September 1, 2020. Dashkasan Iron Ore LLC, AzerGold’s subsidiary, established in 2020, is implementing the tasks arising from the Decree.

In general, mining operations at the Dashkasan iron ore deposits complex first started during the Soviet period. Between 1954 and 1994, extraction and iron concentrate production were conducted at the deposit determined as most favorable within the complex. In the following periods, mining at the site was performed partially and intermittently. However, due to factors such as the relatively low iron content in the ore, the location of the deposits at relatively deep layers resulting in a high stripping ratio, and the lack of direct access to international waters increasing logistics costs, attempts to restore operations at the deposit had not been successful.

Since 2020, Dashkasan Iron Ore LLC has performed extensive exploration to ensure the efficient and sustainable operation of the deposit. As a result of the reassessment of mineral resources according to international standards, an increase of 70 mln tons in ore mass was confirmed, bringing the total to 187.3 mln tons. It was also decided to build a three-stage production chain to ensure the economic viability of the deposit, including the construction of a Beneficiation Plant to produce iron ore concentrate, a Pellet Plant to process the enriched concentrate, and an HBI Plant to manufacture high-iron-content hot briquetted iron. Initial design documents have been prepared for these plants and a slurry pipeline to transport the concentrate between them. Metallurgical tests were successfully completed, and for the first time in the history of the Dashkasan deposit group, it managed to produce concentrate with up to 69% iron content and hot briquetted iron with up to 97% metallization under laboratory conditions. Based on the data obtained, with the involvement of a reputable international consulting company, an updated implementation strategy and corresponding roadmap covering both technical and economic aspects were developed and approved.

The comprehensive work performed and detailed analyses have formed the ground for the development of an in-depth bankable feasibility study according to the best international practices to ensure the commercial efficiency and sustainable operation of the Dashkasan deposit group. Thus, since mid-last year, Dashkasan Iron Ore LLC has performed negotiations with several global companies specializing in this field. As a result, China’s Sinosteel Equipment & Engineering Co., Ltd was selected.

Under the contract valued at USD 2,450,000, a document will be prepared within two years, covering the most optimal economic and environmental approaches for mining and serving as a primary reference document for respective institutions, potential investors, and banks to fund the project. The document will outline the volume of economically viable ore and appropriate process solutions, construction, and engineering, enabling the transition to the next stages for full-scale development of the deposit. Alongside the Chinese company, the services of respective local contractors will also be utilized for various local document preparation components.

It is worth noting that Sinosteel Equipment & Engineering Co., Ltd is one of the main subsidiaries of China’s state-owned industrial giant, Sinosteel Group Corporation Limited, specializing in the processing and supply of metallurgical raw materials and technologies. The company with extensive experience in mining and processing iron ore has implemented various industrial projects both domestically and abroad, including the integration of equipment, application of advanced technologies, and provision of scientific approaches for the construction and management of iron ore processing facilities. The company ensures efficient resource utilization through technologically and environmentally safe extraction and processing methods and has implemented similar projects in Turkey, Australia, the Republic of South Africa, Algeria, and India.