Our client mined nickel from sulphide ore and therefore produced excess, untreated sulphur dioxide which was liberated into the atmosphere. When Core Consultants joined the team, the engineering consultants were considering converting the sulphur dioxide into sulphuric acid.
Core Consultants’ primary task was to establish whether producing sulphoric acid would be economically viable. As such, Core Consultants met with potential sulphuric acid offakers in order to gauge the appetite. In addition, Core Consultants met with existing and potential sulphuric acid suppliers and traders in order to establish the supply potential. Finally Core Consultants met with transport companies in order to ascertain whether it was viable to transport the product.
We established that there was no local market for sulphuric acid and the transport costs would render the project prohibitive and result in a negative NPV (Net Present Value). We therefore considered the production of elemental sulphur and whilst, it was more costly and technical to develop a sulphur plant, Core Consultants established that it would be earnings accretive within the first year and provided a diversification from the nickel market.
The company was concerned about the technicalities of running a Sulphur plant and instead requested from Core Consultants a prefeasibility study into the possibility of setting up a fertilizer business, using the sulphuric acid as a feedstock. Core Consultants completed these studies and established that whilst this could be viable, a full scale cost exercise would need to be conducted. The company is now seeking investment capital to conduct further studies.