Ognevka
Introduction
TOO Ognevka, owner of the Ognevka processing facility was acquired in January 2007. The facility has two main production lines. The first is a 350,000 tonnes per year crushing, grinding and flotation circuit which has been adapted for the treatment of residues from zinc smelters, known as “clinkers”, which contain high values of copper, gold, silver, iron and carbon. The second production line is a 200,000 tonnes per year gravity concentrator formerly used to treat tantalum ore from a now-closed mine which used to operate at the site. Several options for the development of Ognevka have been studied including the expansion of the clinker treatment facility and the re-treatment of existing tailings which still contain commercial quantities of feldspar, lithium, and beryllium.
Location
Ognevka is approximately 50 km by sealed road from the East Kazakhstan regional capital, Ust-Kamenogorsk. It is situated on the banks of the Irtysh river which can be navigated by cargo vessels downstream to Russia and upstream to China. Ognevka is also served by a railway line on which the facility has its own sidings.
History of Ognevka Facility
The factory was originally built in 1966 to concentrate pegmatitic ores containing feldspar, tantalum, beryllium, niobium, lithium and tin. The East Kazakhstan region produced around 40 per cent. of the tantalum and beryllium that was produced by the Soviet Union. The mines that produced this ore are located in the central part of the Kalbinsky Ridge, one of which is the now closed mine at Ognevka.
Despite a good average grade, lithium was not recovered from the ore and was pumped into the tailings dam. The low level of output of feldspar concentrate and mica concentrate was determined by demand. The tailings dam contains approximately 9.7 million tonnes of tailings of which approximately 1.5 million tonnes are owned by Ognevka and the remaining 8.2 million tonnes by the State.
In 1995 the pegmatite operation was closed following the collapse of the downstream processing operations in Russia following the break-up of the Soviet Union. In 2002 the plant was converted to treat clinkers, but closed two years later through lack of finance and shortage of supplies and is now in a process of court supervised protection from creditors. Under the terms of that protection the Company has agreed a rehabilitation plan under which the plant will be put back into operation and the creditors, amounting in total to approximately £2 million will be paid out over three years out of the company’s earnings.
Current plans
The Ognevka processing facility restarted in early December 2007 and operated through to the middle of 2008. During this time, copper / gold and silver concentrate and a separate carbon concentrate were produced but at a lower grade than is acceptable in current market conditions. With the collapse in the copper price in late 2008, following a review of the economics of the operation, management halted operations. In light of this suspension, it was decided to make an impairment provision in the consolidated financial statements of £1.7 million against the assets of the business.
The Company undertook metallurgical testwork to determine the viability of reprocessing the tailings of the pegmatite material which were produced from previous operations at Ognevka until the late 1990’s. There currently exists approximately 9.7 million tonnes of tailings in the storage facility containing potentially economic quantities of lithium, beryllium and feldspar. The testwork demonstrated that it is technically feasible to extract a feldspar concentrate as well as a concentrate containing lithium and beryllium. However, in the current recessionary conditions prices would be inadequate.
There are a number of other potential uses of the Ognevka facility in treating many types of primary base and precious metal ores, and these are currently being examined.