Aim-listed Zanaga Iron Ore Company has reported a material improvement in the targeted economics at its flagship Zanaga project, in Congo-Brazzaville, driven by the ability to produce a high-grade direct reduced iron (DRI) pellet feed product following recent laboratory confirmation from the metallurgical testwork and process flow sheet optimisation.

This positive economic impact assessment follows the announcement on June 25 regarding test results confirming the ability to produce a high-grade product suitable for DRI pellet feed.

The in-house evaluation offers guidance on the project’s targeted economics, while also updating the company capital and operating cost estimates for the revised process plant configuration to achieve DRI-grade pellet feed specification from the Zanaga project.

Post-tax net-present value increased by 37% to $5.21-billion.

The internal rate of return increased to 26.7%, reflecting enhanced project returns.

Free-on-board operating costs (including royalty) are expected to remain competitive at about $27/t.

The proposed life of asset indicates 30 years of premium DRI-grade pellet feed, with a planned production of 12-million tonnes a year during Stage 1 and 18-million tonnes a year during Stage 2.

The company’s technical consultants have indicated that capital and operating costs are unlikely to differ significantly from those in the 2024 feasibility study cost update exercise and, therefore, the company has used the capital and operating costs from that cost update to produce the economic evaluation above.

Updated capital and operating costs for the revised process design are expected to be obtained by fourth quarter 2025, after which the company will announce the project’s enhanced development plan.

The high-grade DRI-grade pellet feed, confirmed through detailed metallurgical testing and processing flow sheet optimisation, is expected to command a significant price premium in global markets, especially from iron and steel makers focused on enhanced efficiency, lower operating costs and reduced emissions associated with electric arc furnace iron and steel production, the company posits.

“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,” CEO Martin Knauth says.