Zanaga Iron Ore Co Ltd (AIM:ZIOC) has reported a significant new valuation, helped by its premium ‘green’ steel product.
The Zanaga project has been upgraded with a new valuation, lifting 37% in terms of its post-tax NPV to US$5.21 billion, and the estimated IRR rises to 26.7%.
It follows the recent confirmation that the project is capable of producing high-grade Direct Reduced Iron (DRI) pellet feed.
An economic review of the project is based on a 30-year lifespan, with a planned output of 12 million tonnes per annum in Stage 1, and 18 million tonnes per annum in Stage 2; in other words, together, the Stage 1 and Stage 2 developments create a 30 million tonnes a year operation.
The project’s product, with higher iron content and low impurity, is expected to command a price premium.
Meanwhile, capital and operating costs are expected to remain close to the 2024 update to its Feasibility Study, Zanaga noted.
It added that updated estimates for the revised process design are due later this year, in the fourth quarter.
"Zanaga Project's ability to produce an enhanced specification to meet the growing sector of low-emission DRI, a key step in producing green steel, is a significant achievement and drives a considerable positive re-rating of the project's valuation,” said chief executive Martin Knauth.
“The global DRI market's supply from mine assets is expected to decline markedly in the coming years, forcing iron and steel makers to invest in downstream upgrading infrastructure; Zanaga project's ability to support this premium market from source is viewed as a lucrative opportunity."