Austpac’s technologies, collectively termed the “ERMS SR” process, were proven at a newly constructed 3,000 tpa Demonstration Plant during 2008. The showcasing of the relevant technologies at the Plant, including ilmenite roasting, synthetic rutile production, EARS acid regeneration, the continuous leach reactor (CLR) and the direct reduction of iron oxides to iron pellets (DRI), was a major achievement that has allowed the Company to move into commercialisation. Austpac has now proved the world’s only fully continuous synrutile process that produces ultra high grade synthetic rutile and an iron co-product. Operations at the plant also proved the ability of the EARS to regenerate acid from spent pickle liquor (a waste created in finishing some steel products), and of the DRI process to produce iron metal pellets from iron ore fines, thus widening the commercial applications for the Company’s technologies. The 3,000 tpa Demonstration Plant has proven the technologies under continuous commercial conditions.

Kooragang Island Plant 1998
In early 1998, Austpac Resources adapted a decommissioned hydrofluoric acid plant on Kooragang Island in Newcastle NSW to serve as the site of the Company’s 3,000 tonnes per annum ERMS SR Synthetic Rutile Demonstration Plant.  The removal of a variety of old equipment from the site provided an open six storey framework to begin the construction of pilot plant facilities for the development of the Company’s technologies.

In 2000, three roasters were installed in the plant. They could be operated individually or in a series, using solid, liquid or gaseous fuels, which provided more flexibility to the roasting operations.

The Kooragang Island pilot plant was run in various configurations on a campaign basis for internal test work and research as well as client based applications, commencing in 2000.

By 2004, Austpac recognised it would be necessary to build a more sophisticated plant capable of testing all the technologies that comprise the ERMS SR process. Such a plant was necessary to prove the technologies at a sufficient scale prior to committing to a commercial development, and funds were sought for a Demonstration Plant capable of producing synthetic rutile at a rate of 3,000 tpa.

BHP Billiton, the world’s largest resource company, recognised the potential of the ERMS SR technology by funding a research program in 2006. BHP Billiton subsequently supported Austpac’s capital raisings to fund the construction and operation of the ERMS SR Demonstration Plant. BHP Billiton contributed a total of $8 million (AUD) in two share placements in 2007 and 2008 to become Austpac’s largest shareholder with a total holding of 55 million shares (7.25% of the Company).

BHP Billiton was granted a licence in mid 2007 to use the ERMS SR technology in Africa, subject to payment of a royalty based on gross annual sales, and in June 2008, BHP Billiton acquired a non-exclusive licence to use Austpac’s Low Temperature Roasting technology in Africa. BHP Billiton has the right to mine the massive Corridor Sands heavy mineral deposit in southern Mozambique, which contains one third of the world’s ilmenite. Austpac’s test work for BHP Billiton has demonstrated that ERMS SR is the only process capable of treating Corridor Sands ilmenite to produce ultra high grade synthetic rutile and the iron pellet co-product.

In July 2007, Austpac commenced construction of the 3,000 tpa ERMS SR plant to demonstrate the Company’s synthetic rutile, acid regeneration and direct reduced iron processes. The Demonstration Plant was constructed and operated in two stages, as outlined below.

ERMS SR – Stage One
Stage 1, which was designed to roast, condition and separate ilmenite for leaching, comprises three interconnected fluid bed roasters for drying/preheating, oxidising and reducing the ilmenite. The roasted ilmenite is then cooled anaerobically, and passed over a rare earth drum magnet to remove unwanted minerals prior to leaching.

Stage 1 operations commenced in March 2008. A total of 720 tonnes of ilmenite concentrate was roasted; 150 tonnes from Consolidated Rutile’s operations on North Stradbroke Island, 500 tonnes from Bemax Resources’ Murray Basin operations, and BHP Billiton supplied 70 tonnes from the Corridor Sands deposit in Mozambique. Throughout the campaign, samples of the bulk-roasted ilmenite were bench-scale leached to evaluate the quality of the product. These tests consistently produced ultra high grade synthetic rutile (97% TiO2) with very low contaminants. Roasting operations were conducted on a 24 hours per day, 7 days per week basis and finished in July 2008.

During the campaign, Austpac upgraded the roasting train by installing a larger, refractory-lined oxidation roaster to increase throughput and to simulate a commercial roasting plant. This markedly improved the performance of the roasting section.

ERMS SR – Stage Two
Stage 2 is the ilmenite leaching and EARS acid regeneration section of the plant. Roasted ilmenite and hydrochloric acid (HCl) are mixed and pumped into Austpac’s patented continuous leach vessel, where the iron is leached from the ilmenite leaving a high TiO2 solid. The solid synthetic rutile is separated from the iron chloride solutions on a filter, then dried, heated (calcined) and finally passed over a magnetic separator to remove any remaining waste minerals. The finished synthetic rutile is stored in bags ready for shipping to selected consumers for market trials.

The iron chloride rich “spent leach liquor” is pumped to the adjacent EARS acid regeneration plant, where it is dried in a fluid bed evaporator to form a solid iron chloride pellet. The pellets are then heated in the fluid bed pyrohydrolysis reactor to form hydrogen chloride gas and iron oxide pellets. The gas is absorbed in water, forming strong HCl which is returned to the leaching section. The iron oxide is then passed to Austpac’s proprietary fluid bed “metalliser” where it is reduced to iron metal (DRI) in a single step.

The commissioning of the synthetic rutile and iron pellet production section commenced in July 2008, with hydrostatic testing of the ilmenite leaching section, including Austpac’s patented continuous leach vessel. The calcining section and the fluid bed roasters for the EARS acid regeneration section were installed in July 2008 and the piping and hot gas duct connections and instruments were then fitted.

In September 2008, iron ore fines from Pilbara region of WA were used for the initial testing of the EARS section to ensure proper transfer of solids throughout the system, to commission the fluid bed metallising section, and to successfully produce a Direct Reduced Iron (DRI) product. It is highly significant that Austpac’s DRI process has now been demonstrated as applicable for value-adding to iron ore. The DRI process is protected by a patent application.

Steel mill waste (spent pickle liquor) was then used to commission the EARS acid regeneration section of the plant. This had the benefits of regenerating the initial charge of hydrochloric acid required for ilmenite leaching, avoiding the need to purchase fresh acid, and demonstrating that the EARS system can process pickle liquor from steel mill waste.

A tank farm was installed next to the process tower to ensure the secure and safe storage of spent leach liquor, pickle liquor and fresh hydrochloric acid. Additional tanks were installed to recycle process water and to capture all storm water run off, both saving water and ensuring that the plant produces no liquid effluents.

A carbon dioxide (CO2) absorption system was installed in the EARS section to remove over half of the CO2 from the exit roaster gas. The CO2 is very pure and in a commercial plant would be stored for sale to other industries, thus creating revenue whilst also demonstrating environmental responsibility.

In October 2008, Austpac’s patented Continuous Leach Reactor (CLR) was used to leach ilmenite from the Murray Basin that had been roasted during Stage 1. The leached ilmenite was dried, calcined and passed over a rare earth roll magnet to ensure the purity of the synthetic rutile product. Analyses of samples confirmed that this bulk synthetic rutile contains over 97% TiO2. The production of such an ultra high grade product proved the leaching efficiency of the CLR equipment and exceeded expectations based on previous bench-scale leaching of the same ilmenite. The bulk synthetic rutile also contained very low levels of iron and other impurities, and negligible amounts uranium and thorium, confirming it is suitable for titanium metal manufacture.

Austpac’s technologies, collectively termed the “ERMS SR” process, were proven at the Demonstration Plant in the 4th quarter of 2008. The showcasing of the relevant technologies at the Plant, including ilmenite roasting, EARS acid regeneration, the continuous leach reactor, and the direct reduction of iron oxides to iron pellets, was a major achievement that has allowed the Company to move into commercialisation. Austpac has now proved the world’s only fully continuous synrutile process that produces ultra high grade synthetic rutile and an iron co-product. Operations at the plant also proved the ability of the EARS to regenerate acid from spent pickle liquor (a waste created in finishing some steel products), and of the DRI process to produce iron metal pellets from iron ore fines, thus widening the commercial applications for the Company’s technologies.

In 2009, work will begin on upgrading the site from a demonstration plant to a continuous EARS steel mill waste processing plant. Equipment that was originally installed for campaign based operations is being refurbished to ensure fully continuous commercial operations by late 2009.

Data from the operation of the Demonstration Plant will be used for detailed engineering design and for the bankable feasibility study into a 60,000 tpa commercial ERMS SR synthetic rutile plant.

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