01/05/2012 - 15:59

Grange says Southdown to cost $2.9 billion

01/05/2012 - 15:59

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Grange Resources has put a $2.9 billion price tag on its Southdown magnetite project near Albany and says it expects to make a final investment decision by the end of this year.

Grange released a definitive feasibility study for Southdown today, which managing director Russell Clark said confirmed it as one of the country’s foremost magnetite projects.

Southdown is a robust, practical and financially attractive project with all the necessary infrastructure and port access that large projects like this need,” Mr Clark said in a statement.

“The project will employ an estimate 2,000 people during construction and provide ongoing work for 600 once fully operational.”

Mr Clark said most of the project’s workforce would be recruited locally.

He said the company had firmed up many aspects of the project during the feasibility phase.

“Environmental permitting is all but finalised, land purchases have been advanced, native title and community consultation is progressing well, mineral resources and ore reserves have been significantly increased, metallurgical test work has been completed and commercial agreements with the Port of Albany and Western Power are reaching a positive conclusion,” Mr Clark said.

“the capital costs estimates are in line with expectations and the operating cost forecast remains very attractive.”

Japan’s Kobe Steel bought into Southdown in March, purchasing a 10 per cent stake.

Grange is targeting production of 10 million tonnes per annum of high-grade magnetite concentrate.

At close of trade today, Grange stocks had slipped by 3.3 per cent, trading at 58 cents.

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