September 29, 2016
Yara has clinched a deal with Pyhäsalmi Mine Oy (First Quantum Minerals Ltd), ensuring an estimated 10-year supply of pyrite, which will be extracted from the tailings ponds at the nearby mining operation.
Pyrite mineral is an essential raw material for Yara Siilinjärvi, which mainly produces NPK fertilizers, sulphuric acid and phosphoric acid. The mineral is used due to its easy availability from the Pyhäsalmi copper mine, which has been supplying the plant with the raw material for the last 30 years.
But this reliable supply line came under threat when First Quantum Minerals announced it would close the mine in 2018. This meant the end of Yara Siilinjärvi’s pyrite supply. Or did it?
Although operations at the mine would end, there was still pyrite in the tailing ponds of the mine, so Yara approached the mining company to see if they would be willing to sell it.
They were, and the two parties struck a deal worth between 80 and 120 million dollars, depending on market variables.
The deal will allow Yara Siilinjärvi to maintain production using existing assets, and avoid the large investment in new assets it would have needed in order to produce sulphuric acid with other feedstock.
As well as being a good solution for both companies, it's also better for the environment. By buying a large amount of pyrite, Yara is reducing the environmental impact of the Pyhäsalmi mine closure.
This makes it an excellent example of circular economy, which is a key theme among policy makers in Europe and elsewhere.
The deal allows the mining company to meet its environmental obligations. In addition, both companies, which are joined by a 150km rail line, avoid the higher logistical costs involved in buying/selling on the global market.
According to Head of Raw Material Sourcing, Rolf Isberg, the contract supports the competitiveness of the Siilinjärvi plant with limited risks.
|1 – The Pyrite is extracted from the tailings pond of the Pyhäsalmi mine.|
|2 - The pyrite is then refined at the Pyhäsalmi mine enrichment plant.|
|3 - It is loaded onto train and transported 150km to the Yara Siilinjärvi plant.|
4 - At the Siilinjärvi plant the pyrite, which contains 50% Sulphur, is used as feedstock for sulphuric acid.