The pressure for a new deep water port north of Geraldton has increased, with a major Chinese steel company taking a 50 per cent stake in Gindalbie Metals Ltd’s $1 billion Karara iron ore project in the Mid-West.
Anshan Iron and Steel (AnSteel) is China’s second biggest steelmaker and the country’s oldest iron ore miner, and operates a number of concentrate pellet plants.
Its half share in the Karara project, 200 kilometres east of Geraldton, will be 75 per cent of the project’s cost.
The deal is similar to that between Sinosteel Corp, China’s biggest iron ore importer, and Midwest Corp over the $1.5 billion development of Midwest’s Weld Range and Koolanooka projects, also in the Mid-West region.
Gindalbie has a resource of 737 million tonnes at Karara capable of producing six to seven million tonnes of pellets a year from 2010.
It is this second phase of the project that will require the deep water port capable of taking bigger ore carriers at Oakajee, 20km north of Geraldton.
The project envisages a slurry pipeline from Karara to Oakajee, where the pellet plant is expected to be built.
AnSteel has also signed off-take agreements for Karara’s entire iron ore products output – hematite ore, pellets and concentrate – totalling about 10mt/year.
Gindalbie managing director David McSweeney told WA Business News current drilling was aimed at lifting the resource to more than a billion tonnes, enough for a 20-year mine life.
He expected the bankable feasibility study to be completed by the middle of this year with hematite production at an initial 1.5mt/year from mid-2007, followed by pellet production from 2010.
Perth-based Territory Iron Ltd has also secured a deal with an undisclosed Chinese steel mill for most of the company’s first year production from its $10 million Frances Creek project, 190km south of Darwin.
Territory plans to produce 1mt of iron ore in 2007, before lifting output to1.5mt/year in 2008.
