Toronto-listed Macarthur Minerals is moving forward with a proposed magnetite project in the Yilgarn, after announcing yesterday that it had chosen Aurizon as its rail haulage operator.
Toronto-listed Macarthur Minerals is moving forward with a proposed magnetite project in the Yilgarn, after announcing yesterday that it had chosen Aurizon as its rail haulage operator.
Aurizon and Macarthur will undertake negotiations exclusively to finalise the deal, with the ore to be exported through Esperance.
Business News understands the Moonshine Magnetite mine will produce about the same amount of iron ore as the Koolyanobbing mine, also in the Yilgarn, and now operated by Mineral Resources.
A pre-feasibility study on the project reportedly calculated a cost of $226 million, although that was in 2012, at the peak of the boom.
The company has spent $61 million on exploration and development at Moonshine so far.
Moonshine is about 175 kilometres north-west of Kalgoorlie, and Macarthur has two neighbouring iron ore projects – Ularring hematite and Treppo Grande hematite.
Last month, Brisbane-based Macarthur raised $US6 million through a convertible note to finance a bankable feasibility study on the project, and signed an offtake agreement with Glencore.
Glencore will buy 4 million tonnes of iron ore per annum for 10 years.
It comes after the Koolyanobbing iron ore mine was nearly closed last year, when US-based owner Cliffs Natural Resources opted to exit the project.
Perth-based Mineral Resources stepped in with a government-backed deal to continue operation.
Macarthur executive chairman Cameron McCall said Aurizon already had rolling stock available, with about 325 wagons previously used by other operators in the region.
“Rail transport is an integral component in our supply chain and Macarthur and Aurizon have a common goal in expanding iron ore production in the Yilgarn region,” he said.
“This partnership has the potential to significantly benefit the economies of the local mining communities surrounding the Moonshine magnetite project along with the Esperance community.
“These areas have recently suffered from a significant decline in iron ore export.
“The development of the project will be a vital boost to these local communities and the highly skilled workforce available in the region.”
Aurizon general manager iron ore Anna Dartnell said the company had previously worked with Cliffs and Portman moving iron ore in the Yilgarn.