VRX Silica agrees to explore renewable hydrogen options for silica sand projects, EPA application advances
VRX managing director Bruce Maluish says WA’s mid west is becoming increasingly recognised as potential renewable energy hub.
While reaching another milestone in its Environmental Protection Authority application, emerging silica sand mining company VRX Silica (ASX: VRX) has teamed up with global energy consulting firm Xodus Group to explore the future supply of renewable hydrogen to its Western Australian projects.
The deal with Xodus covers supply of green hydrogen to VRX’s Arrowsmith North and Muchea silica sand projects.
It aims to meet forecast future offtake of between 9,000 tonnes and 11,000t of hydrogen per annum and may be extended by mutual consent for a further 12 months from the June 2023 expiry.
The agreement will also explore the potential for energy-hungry glass-manufacturing facilities to take advantage of surplus power supplies.
Silica sand is the main ingredient in all types of glassmaking, including specialty solar panels and high-tech glass.
Around 47% of the world’s glass is made in Asia, with global industry demand increasing at a rate of between 5% and 6% (or up to 10 million tonnes) per year.
Glass manufacturing requires considerable energy inputs and the supply of renewable hydrogen to power these facilities could potentially lead to the production of net-zero glass.
European market
VRX managing director Bruce Maluish said WA could eventually follow in the footsteps of the European market where there has been significant research and development to incorporate renewable power and substitute natural gas with hydrogen in glass-making furnaces.
“WA’s mid-west is increasingly being recognised for its potential to become a substantial hub to supply renewable energy and the production of hydrogen for local consumption and export,” he said.
“Our Muchea project is ideally positioned to take advantage of the high-grade silica sand resource to supply a glass manufacturing facility powered by hydrogen energy for net-zero production of ultra-clear glass for solar panels.”
Muchea’s high quality silica sand has already attracted interest from the WA Government and international glass manufacturers, and could potentially deliver billions of dollars in foreign investment to the state.
“We are continuing our consultation with the state government to attract foreign and local investment into the development of world-class glass manufacturing and downstream processing industries in WA,” Mr Maluish said.
Heritage surveys
Earlier this year, VRX completed Aboriginal heritage surveys – including comprehensive archaeological and ethnographic work – at the Arrowsmith North and Arrowsmith Central projects.
The Yamatji Southern Regional Corporation confirmed that all proposed long-term mining and associated infrastructure areas had been cleared for works to proceed, citing no isolated artefacts or previously unrecorded Aboriginal archaeological sites.
Areas include the 3.6 square kilometre Arrowsmith North mine disturbance envelope to allow for 30 years of mining, and 4.85sq km of the Arrowsmith Central mine disturbance envelope for 20 years of mining.
“Finalising Aboriginal heritage clearance for our proposed works on Arrowsmith North and Arrowsmith Central is an important step forward in the development of our silica sand projects,” Mr Maluish said.
“It also continues our relationship with the local Yamatji Nation … we appreciate their efforts in progressing the conduct of the surveys and reports and look forward to working closely with them as we advance the projects’ development.”
Arrowsmith North will lead a staggered development program with first production expected in 2022, followed by Muchea and Arrowsmith Central.
EPA approval for environmental scoping document
This was followed up with WA’s EPA granting approval to VRX’s environmental scoping document for Arrowsmith North today.
The environmental scoping document covers VRX’s proposed mining activities at Arrowsmith North and requires no amendments.
It is a precursor to the environmental review document with the final report to be submitted to the government for approval in December this year.
Offtake term sheet
During the December quarter, VRX secured an initial offtake term sheet for the supply of foundry sand products from Arrowsmith North to South Korea’s Dong A Heung Eop Mining Co and Dong Nam Corporation, which supply casting and silica sand to car makers Kia, Hyundai, Daewoo and Samsung Renault.
The sheet sets out the terms for a free-on-board silica sand supply contract from Geraldton Port, with the final purchase price to be determined once delivery dates are confirmed.
Mr Maluish said there had been strong interest from other potential customers in south-east Asia at a time of diminishing global supply and increasing demand.
Arrowsmith North has an ore reserve of 223Mt grading 99.7% silicon dioxide.
A revised capital estimate is currently underway on a tailored 2Mtpa plant utilising a unique and patented processing circuit.