03/12/2019 - 14:50

Agrimin, Mitchell form JV

03/12/2019 - 14:50

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Experienced trucking operator Craig Mitchell has formed a logistics joint venture with aspiring sulphate of potash producer Agrimin, seven months after he reached a similar agreement with budding iron ore miner Fenix Resources.

Craig Mitchell (left), who will be chief executive of Newhaul Bulk, and Agrimin CEO Mark Savich.

Experienced trucking operator Craig Mitchell has formed a logistics joint venture with aspiring sulphate of potash producer Agrimin, seven months after he reached a similar agreement with budding iron ore miner Fenix Resources.

Joint venture company Newhaul Bulk will be responsible for hauling Agrimin’s potash 940 kilometres from the mine site in the Kimberley to the port at Wyndham at the northern tip of Western Australia.

It will have a fleet of 25 road trains and employ about 60 drivers and 40 support staff.

The long distance to port is a major challenge facing Agrimin and other aspiring potash producers.

Chief executive Mark Savich believes the joint venture will help Agrimin’s Mackay project stack up.

“We are confident that the joint venture arrangement can deliver significant reductions in costs and risks over the life of our project, when compared to a traditional contracting model,” M Savich said.

“In addition, we believe partnering with an experienced trucking operator will ensure that our haulage will be undertaken in a safe, efficient and low-cost manner.”

He added both parties shared the same vision of working with regional communities to create local job opportunities for more than 100 people.

Mr Mitchell, who will be chief executive of Newhaul Bulk, said early engagement had provided a unique opportunity to maximise local training and job opportunities.

The JV plans to develop driver training centres and job readiness programs in regional towns including Halls Creek and Kununurra.

Mr Mitchell formerly owned and ran trucking contractor Mitchell Corp, which was acquired by Toll Group for approximately $110 million in 2011.

The Mackay potash project is budgeted to cost about $587 million to develop.

It is expected to yield 426,000 tonnes per year of SOP and is slated for first production in the final quarter of 2022.

Mr Savich said the project was viable using current unsealed roads but haulage would be cheaper and safer if the roads were sealed.

The haulage route uses the Great Northern Highway (390km), which is sealed, plus the Tanami Road (205km) and a southern section (346km).

The state and the federal governments have committed $118 million in funding to seal the Tanami Road, while Agrimin is hoping to secure backing from the Northern Australia Infrastructure Fund to seal the southern section.  

Agrimin plans to release a bankable feasibility study in the first half of 2020, including an updated cost estimate.

It has appointed several groups to assist with the feasibility study.

Primero Group is doing engineering work on the process plant, Kerman Contracting is planning the port development and Ian Junk’s Transhipment Australia has been contracted to work on barge loading at Wyndham.

Mr Mitchell’s agreement with Agrmin comes after he formed a logistics JV with Fenix to support its Iron Ridge project inland from Geraldton.

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