Namibia’s world-class mineral resources, compounded by its immense potential to become a leading producer of green hydrogen, has positioned the southern African nation as a potential hub for sustainable minerals development. Operating the country’s only significant, developed and proven iron ore resource, Lodestone carries the long-term goal of becoming a sustainable producer of green steel.
Energy Capital & Power spoke with COO Daniel Castelyn and CFO Emmeric Angermund about the company’s plans to scale iron ore production and participate in the decarbonization of the metals industry.
Could you provide an overview of the Dordabis iron ore project?
Lodestone is a privately-owned mining company – it’s not stock-listed like most of the mining companies in the junior mining space. Our first deposit is roughly 70 km southeast of Windhoek at Dordabis, which was discovered in 1950 by Bethlehem Steel. In 2010, the current principal investor, Carsten Mosch, and the shareholders with him, decided to go the more traditional route of declaring a resource.
Our pre-feasibility study was done up until 2014, and up until 2018, the company was focused on conserving cash and looking at other markets for iron ore. From then until now, we have done two further feasibility studies for the export of two million tons per year of high-grade concentrate – and we have also shipped about one-and-a-half shipments to China via Walvis Bay of a lower grade product.
We are currently raising the remaining funds required for the project, which will be $250 million in total.
What plans are in place to scale up iron ore production and steel development in Namibia?
The next steps are to raise the CapEx to expand our current operation. For that, we have closed out 70% of the funding requirements with large international development finance institutions, together with our offtaker. We still need to close out 30% primary equity that is still out in the market raising. From there, we will start the actual iron ore production. From Lodestone’s long-term perspective, the idea is to ultimately produce green HPI, and then eventually green steel, using either green hydrogen or natural gas that’s available in Namibia. Our long-term goal is to be a sustainable producer of green steel in Namibia.
As Namibia’s first iron ore producer, how will Lodestone retain its competitive advantage in the sector going forward?
We have shipped more than 75,000 tons from Walvis Bay in the past two years. We have a lot of credibility with local logistics suppliers and the government as well. Given that we are far ahead of everyone else, that remains a key deciding factor for us to remain in the front. Our competitors are staying three to five years behind us at any given point in time.
What role will hydrogen play in the decarbonization of the metals industry?
We believe hydrogen can play a significant role in the decarbonization of the direct reduction portion of the iron steel sector. A reasonable source of iron ore and the supply of cheap green hydrogen near the iron ore source is required to sustainably produce green steel. Both are possible in Namibia. One of the current limitations for developing green steel sectors is the cost of green hydrogen production at scale. This is coupled with a relative infant market and difficulty in pricing those green premiums, and then knowing how your consumers of green steel are going to pass this onto their customers. New entrants to the market have to compete at very low-cost levels when compared to established market participants.
Energy Capital & Power is a strategic partner of the Namibia International Energy Conference (NIEC) – taking place in Windhoek on April 23-25, 2024. The 6th annual conference unites industry leaders, business executives and policymakers to engage in dialogue, exchange ideas, create new partnerships and identify strategies to foster a prosperous energy industry in Namibia and beyond. For more information, please visit https://www.nieconference.com/
