28/02/2013 - 14:59

IOH and MinRes agree to develop new mine

28/02/2013 - 14:59

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Mineral Resources managing director Chris Ellison

Iron Ore Holdings and Mineral Resources have struck an agreement that will result in the development this year of the Iron Valley mine in the Pilbara.

The key to the development is a mine gate sale agreement between IOH, which owns Iron Valley, and MinRes, which has a track record of building and operating mines.

The development of Iron Valley is expected to commence in the third quarter of 2013, after IOH secures final mining approvals.

It will take about six months to develop, with MinRes planning to ramp-up production over a three to four year period.

The key terms of the agreement, including pricing and production volumes, were not disclosed.

However IOH provided indicative figures, saying that with annual production of 4 to 6 million tonnes, the deal could add $20 million to $75 million to its underlying profit.

MinRes plans to transport the ore to Port Hedland by road, while investigating other transport options.

It already operates the Phil’s Creek and Poondano iron ore mines in the Pilbara and the Carina mine in the Yilgarm, and exported 2.7 million tonnes of iron ore and manganese in the half year to December 2012.

It also has large contract crushing, engineering and construction businesses.

IOH said its main focus in future would be the Buckland project.

 

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