BUSINESS
        Principal Activities

        The principal activity of the Group is to identify zinc projects where the knowledge and expertise built up over many years can be used to evaluate, and where applicable, develop projects or work with others in joint ventures or sell on such projects with a view to building cash reserves to return to shareholders. The Company acts as a recycling, processing, development and holding company.

        Business Model

        Steel is generally protected from corrosion by galvanising, a process whereby a thin coating of zinc is applied to the surface of the steel. This coating insulates the steel from reaction with air and so prevents corrosion. Steel, and therefore scrap, is becoming increasingly galvanised. Scrap iron and steel is mostly recycled in electric arc furnaces (EAF) where the volatile constituents (Zn, Pb, Cl, Na etc) are driven off as fine particles and gases, together with fine particles of rust. This Electric Arc Furnace Dust (‘EAFD’) needs to be filtered from the flue gases and since zinc is a volatile element, it constitutes part of the EAFD. The EAFD generally contains between 20% and 25% zinc, and 25% to 30% iron, both of which occur largely as oxides. In addition, the EAFD contains lead, cadmium and arsenic, all toxic elements which are, to some extent, soluble in water. EAFD is therefore a hazardous waste. There are estimated to be 7 million tonnes of EAFD generated annually from over 1,000 EAFs globally, probably making EAFD the world’s largest inorganic hazardous waste product.

        The steel mills need to dispose of the EAFD either in landfill or to processors which recover the zinc. Process plants based on existing technology have not been developed unless a significant disposal fee has been paid by the steel mills.

        The breakthrough technology used by ZincOx recovers the zinc using an RHF. The zinc forms a unique high quality zinc oxide concentrate (HZO), an iron intermediate product (ZHBI). This means that there will be no solid waste entering landfill.

        The ZHBI can be further processed into pig iron and a clean slag that can be used by the cement industry. It has recently been demonstrated that the exceptional quality of the HZO will enable it to be upgraded to a zinc oxide chemical. As zinc in the chemical form is worth about twice that of zinc in a concentrate feeding a smelter, the upgrading would greatly enhance revenue and profitability. When developed with the rotary hearth furnace as an integrated operation, together with ZHBI upgrading, the technology is referred to as the “Full Cycle” approach.

 

Korean Recycling Plant (‘KRP’)

The KRP has now been operating for five years and all the lessons that have been learned in Korea, to build and develop the RHF, can be incorporated into any new RHF projects, in particular the Vietnamese Recycling and Upgrading Plant (‘VRUP’).

The Company sold its remaining interest in KRP in January 2017 to Korea Zinc Company Limited.

Having demonstrated every aspect of the project in KRP, the Company intends rolling out this technology in other parts of the world, and considerable progress has been made in Vietnam and Thailand.

Technology

The Company has always reviewed new developments in technology that are being used to treat EAFD, to make comparison of these with our RHF and upgrading approach. We still feel that the best way of creating long term value is by using RHF technology and the upgrading of its zinc and iron bearing products. Definitive progress has been made with both these upgrades over the last few years.

Zinc Concentrate (‘HZO’)

Testwork on KRP’s zinc concentrate (HZO) has confirmed the best way to upgrade it to an industrial quality zinc oxide chemical. The ideal process was designed by ZincOx’s technical team and is called Consecutive Metal Leaching (“CML”). CML comprises a combination of existing technologies specifically configured to remove the halides, sulphates and deleterious base metals from the concentrate. The zinc oxide that remains after CML has a grade of about 99.7% zinc oxide, high enough to qualify for most industrial uses, including rubber and ceramics.

Laboratory scale CML testwork has provided samples of the zinc oxide. These samples have been used to make glazes for the ceramics industry and samples of rubber, by laboratories that specialize in the technical qualification of raw materials. In both cases the zinc oxide produced by upgrading the HZO was confirmed to be equally effective as leading market brands.

Iron Product (‘ZHBI’) Upgrading

ZHBI, the iron product of the RHF, can be melted to produce pig iron and saleable slag. Several melting techniques were investigated and the Submerged Arc Furnace (“SAF”) was found to be the most attractive. Representative ZHBI samples have been analysed and the results used to undertake sophisticated computer simulation of the SAF technology. The simulation was carried out by Mintek, an internationally recognised metallurgical laboratory. The computer modelling gives likely energy and reagent consumptions as well as iron, slag and fume compositions. This information has been used in developing a scoping study for the installation of a melter to work in combination with an RHF. The study was positive, but due to the high proportion of slag and energy required for its melting, development of such an installation would probably require a scrap price in excess of US$250 per tonne.