Firering Strategic Minerals Plc (LON:FRG) Non-Executive Director Vassilios Carellas caught up with DirectorsTalk to discuss the operational update on its Zambian quicklime operation, Limeco.
Q1: Vassilios, Kiln 1 now stabilised at 45 to 50 tonnes per day, what are the next steps that are being taken to increase production to 80 tonnes per day?
A1: Both our engineers on site and third-party consultants are in agreement on what needs to be done to get production up to what the kiln is designed to do. These modifications are currently being carried out on Kiln 2 and will be rolled out on the other kilns as they come online.
The main change is the removal of two internal arches called bridges in the kiln, which although designed to assist in getting the heat to the centre of the kiln from the burners, are at the moment also causing what is called by engineers a channelling effect, whereby within the kiln one gets a preferential flow of heat and air to certain parts of the kiln, resulting in an uneven distribution of heat within the kiln.
In doing this, there will also be further modifications to the burners to take into account the removal of these bridges and also access ports to the outer shell of the kilns, known as poke holes, are being inserted. It will enable easy access to monitor the internal workings of the calcination process at the various levels in the kiln and assist with the continuous and even flow of material through the kiln.
Q2: Do you now have a firmer timeline for starting up Kiln 2?
A2: The container for Kiln 2 has been shipped; it is on a ship as of over the weekend. The ship was in the port of Mombasa, which is just up the coast from Dar es Salaam, so we expect it to get to Dar es Salaam during the course of this week, following which it roughly takes only about two to three weeks to get to site in Zambia. Once there, we’re looking at roughly four weeks to turn on Kiln 2.
So, based on those approximate timelines, Kiln 2 should be started around about mid-November.
Q3: How does the introduction of new product grades affect Firering Strategic Minerals’ pricing strategy and margin expectations?
A3: The recent interest in sale of a lower grade product has shown us that material previously that we thought was of no value can in fact generate significant revenue, really. This broadens our product line that we’re able to offer, catering now to a wider customer base. Some clients prefer a higher purity quicklime, whilst others are happy with lower grades at a different price point.
So, from a margin perspective, the key is that additional grades can be sold without actually significant incremental costs or no incremental costs, because it’s coming out of the kiln anyway. So, margins remain quite attractive.
Q4: Now, in the announcement, reference was made to an additional product line. Are you able to shed any light on what that might be?
A4: At the moment, we’re selling quicklime in its natural form straight off the calcination. Some clients then have the ability to handle and store it in this form and are more comfortable in handling and storing a hydrated lime product. So, you basically add water to it.
We’re currently looking at a hydration circuit, which at the moment does not look like it’s going to be such an expensive add-on, probably somewhere between $100,000 to $200,000. That does enable a further product line to be added and more importantly can be sold at a much higher price.
Q5: Now, given the current reliance on the $150,000 stockpile, are there any risks to maintaining supply continuity before mining starts in Q4 2026?
A5: No. Obviously we were very comfortable with the stockpile, obviously managing it so we know how much material is there and how much we’re using. It’s more than sufficient to support our current and planned production levels up until mining begins.
We’ve also built in a buffer to ensure continuity of supply even as the kiln capacity increases. The mining license just provides a seamless transition once the stockpile approaches depletion to switch over to mining.
So, from an operational and customer perspective, there’s no concern around supply security.
