|Terry, I agree with you about alternative energy... as far as the short term goes. Because Orbite wants to build at least ten of these SGA plants, the demand justifies a capital investment into developing natural gas in the region. Something that won't happen by the time the first plant is built. Therefore, they will need an intermediate fix.|
I agree completely with the first paragraph of steelaway's comments:
"A preliminary report full of disclaimers, replete with revenue and cost scenarios, based upon the field work of a geologist who worked his entire career with LaFarge Cement...in other words, an expert on the scoping out of sedimentary deposits all over the world, which report outlined all the areas which would be expanded upon in the BFS is dismissed by the AMF."
While it should come as no-surprise that the AMF would scrutinize Orbite's PEA, the methods used and the action taken don't justify what we now know as the underlying cause for their interference.
The use of natural gas as an energy source in the PEA was justified in terms of calculating energy and mass balances between Orbite's pilot plant and the pilot plants in Europe operated by SMS-Siemag and Outotec. Also, in view of its "green" status among fossil fuels, that Orbite should want to develop their process based on natural gas is not surprising. The risk of there being no proven resources or access to natural gas near their plant site was clearly spelled out in the PEA several times. For the AMF to charge that an informed reader wouldn't be able to pick up on this is misleading.
There is another reason for using natural gas that wasn't brought up in the PEA but probably also factored in its use. And that is for the purposes of demonstrating ability to license and deploy Orbite's process around the world. For example, Alcoa is spending over $10 billion to build a massive alumina refining and aluminum smelting complex in Saudi Arabia all because of the cheap access to natural gas.
Alcoa has partnered with Ma’aden to develop a bauxite mine, refinery, smelter and rolling mill in Saudi Arabia. This joint venture offers unparalleled growth opportunity:Alcoa is building the lowest cost, most efficient aluminum complex in the worldUtilizing fully developed infrastructure, including low-cost natural gas powerEstablishing a strategic footprint in fast growing regionSmelter and rolling mill are scheduled to be on-line in 2013 and bauxite mine and refinery in 2014
And Rusal is needing to build an alumina refinery in Guinea or risk losing the largest bauxite reserve in the world. The Guinea government is attempting to impose stiff taxes and margins will be slim.
Both Russia and China currently have laterite deposits and high-silica bauxite deposits that would benefit immensely from the energy savings of Orbite's process.
Therefore, I think the use of natural gas in the PEA has also provided a basis for Orbite to open negotiations with these global companies and pave the way to licensing the technology.
In the meantime, Orbite can employ alternative fuel sources for the first SGA plant. Fuels such as bunker oil, or bio-mass, while more expensive than natural gas, will still be within the overall 30% OPEX margin of the PEA and will still allow for the realization of a healthy profit margin.