Swedish iron ore concentrate producer Kaunis Iron has dispatched its first shipment to Japan, after hitting its maximum production rate on 14 March.
The Capesize vessel left the Norwegian port of Narvik on 23 March, bound for a Japanese steelmaker. This is the first shipment sold to Asia, as Kaunis has so far focused on exports to the Middle East and Europe since starting production in July 2018.
Kaunis is largely selling under index-linked term contracts and is fully committed for the rest of the year. An executive at the mine said that the ramp up of the production is running better than expected and that they might have some flexibility to sell additional spot supplies for later in the year, noting that global demand for their product is strong and they have the logistics in place to export to any region.
Kaunis hit its peak production rate of 6,000 t/d on 14 March, putting it on track to achieve its annual concentrate output target of 2mn t. The company requires run-of-mine output of 6mn t/yr in order to achieve concentrate production of 2mn t/yr.
Kaunis has so far been focused on developing the Tapuli deposit, from which it produces iron ore concentrate with 68.5pc Fe content and phosphorous almost below detection at 0.018pc.
Kaunis plans to start development of its Sahavaara deposit in the coming years, subject to obtaining the necessary permits, potentially more than doubling its annual output.
The Sahavaara pit — which is at the same Kaunisvaara site as Tapuli — produces ore similar in quality to Tapuli but with slightly higher sulphur content, meaning Kaunis would need to install flotation equipment in the Kaunisvaara processing plant.
Much of the infrastructure and equipment needed at the mine site and plant for the development of the Sahavaara deposit is already in place, having been bought by the site's previous owner Northland Resources prior to bankruptcy.
Kaunis will need to complete the equipment's installation and finish the construction of an unfinished second conveyor belt, but it will not need to shoulder the full costs typically involved in developing a new deposit.
