Asia Iron underlines Mid West emergence

Asia Iron has become the latest Mid West iron ore player to take a major step forward, with the appointment of WorleyParsons as its project management contractor for the first stage of the Extension Hill magnetite project.

WorleyParsons will be responsible for the delivery of a detailed implementation study for the $2.4 billion first stage of Extension Hill, including the completion of front-end engineering and the development of contract packages and project specific baselines for construction phase management.

The study is scheduled to be completed in January 2012, and construction is expected to commence immediately thereafter.

Extension Hill, which is located 260 kilometres south east of Geraldton, is expected to produce more than 10 million tonnes of magnetite concentrate per annum.

Terms of the deal were not disclosed.

Asia Iron said first shipments of magnetite concentrate through Geraldton Port should commence before the end of 2013.

"An early works program involving procurement of long lead equipment and services, along with completion of the site establishment works necessary to match this timetable will be initiated in the second half of this year," Asia Iron managing director Bill Mackenzie said.

"The Extension Hill magnetite project is now well on the development path and the engagement of WorleyParsons to complete the Implementation Study allows us to build on the solid foundations already laid.

"We have confidence that the project is well placed to meet our development timetable."

Asia Iron's progress at Extension Hill has the Mid West region primed to emerge as one of Australia's premier iron ore provinces, second only to the Pilbara.

Mt Gibson Iron recommenced construction and development of its Extension Hill magnetite iron ore mine in January.

Mount Gibson said construction was scheduled to be completed within 15 months of the announcement, at a cost of $80 million.

It also announced it had in place track access and haulage agreements to cater for at least 3Mtpa of magnetite production.

Mount Gibson said it expected ore shipments to commence after Westnet Rail completes a $90 million upgrade of rail lines in June 2011.

The company's Tallering Peak operation, 175 kilometres east of Geraldton, produceds 3Mtpa of hematite iron ore.

Gindalbie Metals is also well advanced in its construction of its $2 billion Karara magnetite iron ore mine.

Gindalbie is developing Karara in a 50:50 joint venture known as Karara Mining, with Chinese steel producer Ansteel.

Gindalbie announced the first export from Karara late last month.

The Karara project is one of three which supports the development of Murchison Metals and Mitsubishi's joint venture Oakajee port and rail infrastructure project.

Karara, Crosslands Resources and China's Sinosteel Midwest signed agreements in August last year to become foundation customers of the $5.2 billion port.

Sinosteel Midwest said signing the agreement was a critical step for the development of its $2 billion, 15Mtpa Weld Range magnetite iron ore project.

It is aiming to commence production in 2013 from Weld Range, with first ore shipped in early 2014.
Crossland Resources Jack Hills iron ore mine is currently producing around 2Mtpa of iron re each year.

Crossland began mining at Jack Hills in November 2006.

Its Jack Hills expansion project will boost production to more than 35Mtpa, with an extended mine life of 25 years.

The expansion hinges on the development of a 500 kilometre rail spur from the mine to the planned Oakajee port.