14/04/2009 - 12:24

Atlas seeks partners for $3bn iron mine

14/04/2009 - 12:24

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Atlas Iron says it will focus on attracting a suitable joint venture partner for its Ridley magnetite iron ore project in the Pilbara after a preliminary study estimated a capital cost of nearly $3 billion.

Atlas seeks partners for $3bn iron mine

Atlas Iron says it will focus on attracting a suitable joint venture partner for its Ridley magnetite iron ore project in the Pilbara after a preliminary study estimated a capital cost of nearly $3 billion.

The prefeasibility study found the bulk of the $2.97 billion capital cost, which includes $250 million in contingency, is for the processing plant which is estimated to cost around $986 million.

The operation would produce 15 million tonnes of concentrate per annum over a mine life in excess of 30 years, with the average operation cost estimated at $A36.22 per tonne.

The energy intensive project will require 330 megawatts of power for the port, mine site and 773-room accommodation camp, and a water supply rate of 15.5 gigalitres each year to be sourced from the West Canning basin.

Atlas said around 960 workers will be required for the construction phase of the project while 744 workers will be needed to operate the mine, located 75 kilometres east of Port Hedland.

In comparison, CITIC Pacific is investing more than $5 billion into its Sino magnetite iron ore project which is expected to produce around 27.6 million tonnes per annum of concentrate and pellets.

CITIC recently announced it will need around 4,000 people to help construct the Pilbara project, which is expected to start operating next year.

Atlas today said the study examined "offshore" options for loading the concentrate onto ships due to restricted availability of existing ship loading facilities in Port Hedland.

"A concentrate line from the mine site to a trans-shipment vessel, which would be located approximately 20 kilometres off shore, was selected as the preferred option," Atlas said.

The company added this option would not impede loading rates of 8,000 tonnes per hour and there would be sufficient storage with a modified mini Cape-sized bulk carrier.

Dewatering of the concentrate slurry will be undertaken on the vessel.

"The company continues to receive expressions of interest from potential strategic partners to assist in the development of the Ridley project," Atlas said.

"The Company will now focus on attracting a suitable joint venture partner to take the project through to development."

Shares in Atlas were up 5.5 cents to $1.225 at 14:04 AET.

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