Designing the Iron Production Chain Has Been Successfully Continued

A subsidiary of AzerGold CJSC, Dashkasan Iron Ore LLC is successfully continuing preparations for operating the Dashkasan iron ore deposit.

It should be noted that in the South Caucasus’ largest complex of ferrous metal ore deposits, discovered in the 1860-70s, mining started during the USSR. For this purpose, the Dashkasan Ore Department was established in 1945. According to the project, since 1954, the manufactured iron concentrate has been delivered by rail to the steel production facility in Rustavi, Georgia. After our country regained its independence, the iron ore manufacture was interrupted since the production chain between the union republics was broken. From 1994 to 2017, the deposit operation was partial.

A New Dashkasan Iron Ore Deposit Operation Stage

In 2020, by appropriate orders of the President of the Republic of Azerbaijan, AzerGold CJSC was charged with the commissioning of the Dashkasan iron ore deposit. Established as a subsidiary in connection with the project, Dashkasan Iron Ore LLC has started preparations for operation. To do this, at the initial stage, mineral resources of the Northwest and Southeast deposits have been assessed. As a result, the underground reserves of both deposits were increased by 69.7 mln tons. Thereby, the total mass of ore reserves of all deposits in the Dashkasan iron ore field has reached 309.16 mln tons. According to the 21-year Operation Plan prepared for these deposits, mining and extraction started in June 2022 in the Southeast mine. Over the past period, the Southeast deposit gave 6.5 mln tons of overburden and 1.8 mln tons of ore reserves.

However, appropriate analyses are being performed, aimed at further increasing mineral resources feasibly extractable in the Southeast and Northwest deposits and extending the property life to 23-27 years. For this purpose, a geochemical analysis of the samples obtained by drilling was performed. As the next stage, to achieve growth, it is planned to engage an international consulting company to reassess the volume of mineral resources and prepare a new operation plan for the deposits.

Building a New Production Chain

To ensure the feasible and sustainable operation of the said deposits, the world-famous and reputable consultant Boston Consulting Group developed the project implementation strategy. Analyses have shown that implementing a phased production process under the project will be the optimal solution. As part of that solution, it was decided to manufacture high-quality HBI (Hot Briquetted Iron) with 95% iron content as a final product used in the steel industry from iron ore.

It should be noted that the relatively low iron content in ore rocks of Dashkasan iron ore deposits (40% on average) necessitates enriching them to at least 67%. To do this, the construction of the processing plant for the manufacture of iron concentrate is planned as the initial stage of the production chain. In the next stage, a pellet production infrastructure - a DRI Plant - will be built to ensure the mechanical and chemical suitability of the enriched concentrate as a raw material. The intermediate product pellet will then be directed to the HBI Plant to produce HBI with 95% iron content.

As part of the project, the construction of a processing plant in Dashkasan is planned in the territory of the Ore Refinement Combine, built near the mine during the USSR and currently unsuitable for production. The lack of a suitable site for the DRI/HBI plants in the mountainous region and energy sources (electricity, gas) required for the enterprise operation outside residential areas and the limited logistical opportunities for delivering the final product to steel manufacturers necessitated constructing these 2 plants in the surrounding areas. As a result, it was decided to build DRI/HBI plants in the Goygol region.

In the past, the concentrate produced in the Dashkasan deposits was transported to the next destination by cable and railway, but currently, this way is not considered feasible and ecologically sound. Therefore, it is planned to arrange a connection between the Processing and DRI Plants through a 45 km Slag Pipeline.

Thus, according to the project, in the coming years, with creating the production chain, annual manufacture of 3-3.2 mln tons of ore, 1.3 mln tons of concentrate and DRI from this ore, and eventually, manufacture and sale of ~0.9 mln tons of HBI raw materials as the final product are planned.

Currently, as part of the project, the manufacture of high-quality iron raw materials has been successfully tested under laboratory conditions. Based on the test results, it became possible to manufacture a concentrate containing 67% iron with subsequent manufacture of DRI from that concentrate, and the next-stage testing is underway.

Implementing a Technology Meeting Latest Environmental Requirements

Global trends have been considered to ensure compliance of plants with the latest environmental requirements starting from the design stage. HBI technology allows for reducing carbon dioxide emissions by up to 60% compared to the conventional approach. This technology will also allow for switching the production process to hydrogen in the future, thus expanding the implementation of ‘green’ technologies. This will ensure the strengthening of the environmental status of plants as part of the Dashkasan Iron Ore project.

Involving Foreign Investors in the Project

It should be noted that according to Boston Consulting Group, the project’s investment value is estimated at AZN 1.7 billion. It is forecasted that by 2047, the commissioning of iron ore deposits will contribute AZN 7.5 billion to the GDP. Also, considering the direct and indirect effect of the project serving the development of the non-oil and gas sector of our country, it is expected to significantly contribute to the employment index of the Ganja-Dashkasan economic region by opening thousands of permanent jobs.

Along with its positive economic and social impacts, the relatively low average iron content in the ore rocks produced here, the lack of direct access of our country to the ocean water, and other factors complicate the project to some extent, but foreign investors express sufficient interest in it. In this regard, considering the high investment value of the project, AzerGold CJSC is currently negotiating investments in the process with some large potential partners to avoid the additional burden on the state budget. Upon assessing the proposals and conditions of all interested parties, the project will be implemented in the most favorable way for our country and people.