Gindlabie Metals and Sinosteel Midwest Corporation have signed an agreement that paves the way for the Mid West iron ore developers to share key infrastructure for their operations.
Gindlabie Metals and Sinosteel Midwest Corporation have signed an agreement that paves the way for the Mid West iron ore developers to share key infrastructure for their operations.
Both companies say the cooperation agreement will unlock synergies between Gindalbie's Karara iron ore project, a joint venture with AnSteel, and Sinosteel's nearby Koolanooka/Blue Hills project.
The agreement includes key items such as spur line rail access, use of on-site accommodation facilities, shared access to the new Karara airstrip, water infrastructure and sharing of environmental data.
The companies said the agreement is one of the first of its kind in the Mid West region and sets a benchmark for collaboration between resource groups in the region with strategically located assets and aligned infrastructure development strategies, helping to facilitate the growth of the region as a major new mining hub.
Both groups will gain mutual benefits from the arrangement, which will reduce capital costs and lead to lower operating costs through economies of scale, especially in relation to ore transport.
Avoiding the duplication of infrastructure will also reduce the size of the combined projects' overall environmental footprint and the level of vegetation clearing required.
Gindalbie recently started construction of the Karara project and is targeting first production in 2011. Clearing of the Karara concentrator site has been completed, preliminary earthworks for the processing plant are underway and the 300-person Lochada Camp is being commissioned and will be occupied early this month, allowing for the rapid build-up of the Karara workforce.
Sinosteel Midwest Corporation received final approval for its Koolanooka/Blue Hills Project in January 2010 and is targeting the commencement of mining before the end of February at a rate of up to 1.5Mtpa of hematite ore. It also has advanced production opportunities for iron ore at its Weld Range, Jack Hills and Robinson Range Projects, also located in the Mid West region.
The agreements are contingent on the successful construction of each of the infrastructure items, and are subject to attaining the necessary government permits and licences. They are also subject to terms and conditions agreed between the two parties.
Gindalbie's managing director Garret Dixon and Sinosteel Midwest's chief operating officer Giulio Casello said the cooperation agreement represented a significant achievement for the development of a mining industry in the Mid West region and set a new benchmark for strategic cooperation and infrastructure-sharing between mining companies in Australia.
"We are very pleased to have signed this Infrastructure Sharing Agreement between our two organisations, which we believe represents a genuine win-win for both groups given the close proximity of our iron ore operations and the significant synergies that can be realised by taking a sensible and pragmatic view of some of the important new infrastructure that will be developed in the region over the next 12 months," they said.
"I look forward to building a mutually beneficial long term relationship with Sinosteel Midwest in the years ahead, and working closely with them as our neighbours to implement the key terms of this agreement," Mr Dixon added.
"We hope that this agreement will prove to be an example for other companies in the Mid West region - and maybe even other iron ore provinces - as to how effective and constructive infrastructure-sharing arrangements can deliver genuine benefits and help to unlock investment, growth and new opportunities," Mr Casello concluded.
