Jinzhao Mining Peru to Advance Pampa De Pongo Iron-Ore Mine Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--Jinzhao Mining Peru S.A. (Lima, Peru), a subsidiary company of China's Zibo Hongda Mining Company Limited (Zibo, Shandong), is moving forward with Pampa de Pongo, a flagship mining project, in Peru. The project is in the city of Bella Union, in the state of Arequipa, approximately 400 kilometers south of the capital Lima.

The company is performing an aggressive drilling campaign to define resources, aiming at the completion of a feasibility study that has been awarded to consultant SNC-Lavalin Minerconsult Engenharia Limitada (Belo Horizonte, Brazil).

In 2008, a preliminary economic assessment performed by SRK Consulting Incorporated (Vancouver, British Columbia), when the project was owned by Cardero Resources Corporation (TSX:CDU) (Vancouver), showed a pre-production capital investment of $3.3 billion. By that time, Pampa de Pongo was expected to be a 75,000-ton-per-day underground block caving mine operation that would produce iron-ore concentrate through wet magnetic separation and a copper-gold by-product concentrate, which itself would be produced through flotation. The project was acquired by the Chinese company in 2008 for $200 million.

The feasibility study will evaluate the development of Pampa de Pongo as an open-pit mining operation, with the construction of a 10 million-ton-per-year processing plant, a 4.5-kilometer pipeline and a 10.5-kilometer conveyor belt system, as well as a new port to be in Lomas, Arequipa. The feasibility study is expected to be complete by the end of 2012.

Following the environmental license approval, construction is expected to begin in the second half of 2013, coming into production late 2015. At the moment, the only operational iron-ore mine in Peru is the Marcona mine, which is in the Ica region. The Marcona mine is operated by Shougang Hierro Peru S.A. (Lima, Peru), a Peruvian subsidiary of Shougang Company Limited (Beijing).

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