The Mid West region has established itself as Western Australia’s second iron ore province after the Pilbara, with three companies now exporting ore through Geraldton and a fourth planning to start exports next year.
The Mid West region has established itself as Western Australia’s second iron ore province after the Pilbara, with three companies now exporting ore through Geraldton and a fourth planning to start exports next year.
However, its growth has been slower than most companies had predicted and the giant projects that could transform the region are yet to proceed.
The hurdles standing in the way of these projects include objections by the Environmental Protection Authority, and the limited infrastructure in the region.
Mount Gibson Iron is the region’s biggest miner, producing about three million tonnes a year at its Tallering Peak mine.
It is currently finalising the development of a second 3mt/year mine at Extension Hill, likely to cost about $73 million.
It had been aiming to commence exports from Extension Hill in January 2008 but expects that will be delayed by about 12 months due to delays in gaining environmental approval and the lack of infrastructure at the port.
Midwest Corporation became the region’s second iron ore exporter last year when it started shipping stockpiled ore from its Koolanooka mine. It is currently shipping at the rate of 1mt/year and plans to double output at the mine.
Midwest’s ore is currently trucked to port and the company was recently granted an extension of time, to September, to complete the transition to rail transport.
Murchison Metals’ first export shipment left the port of Geraldton last week, making it the region’s third exporter. It is planning to increase output from its Jack Hills mine to 2mt/year.
The region’s next iron ore miner is expected to be Gindalbie Metals, which has a joint venture with China’s AnSteel.
Gindalbie is targeting the start of mining at its Karara deposit by the end of the year and aims to start exporting by the second quarter of 2008.
The project will initially produce 3mt of haematite ore per year.
The mining companies in the region believe their initial projects are just a start, and aim to develop much larger projects in the next few years.
That will only occur if objections raised by the EPA can be addressed.
In a report released in November, the EPA granted conditional approval for Mt Gibson’s Extension Hill project but expressed concern about the impact of mining projects on the region’s flora and fauna.
The state government responded quickly by setting up a strategic review of the iron ore industry in the Mid West.
The aim of the review was to provide certainty to the industry, while also protecting the special biodiversity of the region.
The review is being undertaken by the Department of Industry and Resources and the Department of Environment and Conservation.
If the industry achieves its ambitious growth plans, Murchison Metals will become the region’s biggest producer with annual output of 25mt at its Jack Hills project, while Midwest is aiming to produce up to 20mt/year at its Weld Range project.
While all of the existing projects mine haematite ore, the region is also home to several magnetite projects, which involve further processing of the ore before it can be fed into steel mills.
Midwest has been studying a 6mt magnetite project at Koolanooka while Gindalbie is planning an 8mt magnetite project at Karara.
Its project involves processing the magnetite ore into concentrate at the mine site and transporting it to Geraldton port via a 225-kilometre slurry pipeline.
Gindalbie aims to start construction in January next year and commence exports in the first half of 2010.
Another possible project is the Extension Hill magnetite project, which Mt Gibson sold last year to China’s Sinom Investments.
Mt Gibson said it would have needed to raise a large amount of equity and take on “unacceptably high levels of debt” if it wanted to pursue the project.
Other companies active in the region but with less advanced projects include Ferrowest and Golden West Resources.
Ferrowest is conducting a pre-feasibility study on its Yalgoo iron project, which would involve production of 500,000t/year of pig iron at the mine site.
Golden West is assessing its Wiluna West mining project, and may send its ore to Esperance rather than Oakajee.
