CITIC achieves first shipment at Sino Iron

CITIC Pacific says it is working hard to bring its Sino Iron project up to full production, after completing the first shipment of magnetite concentrate from the trouble-plagued development.

The company held a ceremony today with guests including Premier Colin Barnett to mark the first shipment from the Pilbara mine, which has been hit by massive cost blow-outs and long delays.

Its first concentrator line at the project is now in operation, with commissioning of line two progressing.

CITIC Pacific president Zhang Jijing said the company was working to bring the additional four lines into operation as early as possible, acknowledging it could be some time before the project was operating profitably.

"The knowledge and experience gained from the first two concentrator lines will benefit in the installation of the remaining four lines," he said.

"Production cost per tonne will be high until the project is in full production, as interest can no longer be capitaised and depreciation begins.

"The economies of scale and the increased production from the additional lines are very significant."'

He claimed the most significant capital costs for the project had already been incurred with the completion of common facilities including a power plant, slurry pipeline, deslination plant and port facilities.

The Sino Iron project is the first magnetite mine to reach production in the Pilbara.

Mr Barnett said the project would bring significant benefits to the region, including 1,000 direct permanent jobs in full operation.

“This is the biggest magnetite mining and processing operation under construction in Australia and is a further sign of the potential of the industry to stimulate new investment and construction activity throughout the state," he said.

“Western Australia has significant magnetite resources and this type of premium, value-added ore is preferred by many Chinese steel mills."

CITIC earlier this year hired former Leighton Holdings chief executive Wal King as a senior adviser to help it deal with problems at the Sino Iron project.