Iron ore junior looks to salt for export hopes

A junior Pilbara iron ore company is casting its net wide - including to prospective salt miners – in the search for port space to boost its exports.

Red Hawk Mining has signed a deal with MGM Bulk which could see the haulage company truck three million-tonnes-per-year of ore from Red Hawk's proposed mine near Tom Price 445km to Utah Point in Port Hedland.

The 12-hour return trip to Port Hedland means Red Hawk and MGM Bulk are looking at establishing a layover point at the closed Ngarluma Aboriginal Corporation-owned Whim Creek Hotel halfway between Karratha and Port Hedland.

Red Hawk managing director Steven Michael said the company would be able to export up to 10mpta and bring down operating costs if it could find somewhere to ship more ore from.

“Utah point is up and running, it is available, and there is most likely going to be capacity for us initially,” he said.

“But it is our longest haulage compared to the other ports, so while we will continue to work with Utah… it may be something where we end up with a different port option for the future for the longer term.

“By year three to five there are a couple of greenfield ports, and brownfield port expansions that may take bulk product and be common user.

“An alternative port may also enable us to increase our production level and, with a (direct shipping ore) resource over 200 million tonnes, we have the ability to take this project to seven to 10 million tonnes and still maintain a very healthy and long mine life.”

Mr Michael said trucking ore meant Red Hawk could export through multiple ports if needed, but that each 100km added about $US10 to the company’s operating cost.

Pilbara Ports Authority’s 28mtpa common-user Utah Point facility at the Port of Port Hedland was built “predominantly” for junior miners and small bulk mineral exports.

The facility is largely tied up with Hancock Prospecting and Mineral Resources. The two firms are mulling a new shared facility named South West Creek.

BHP and Fortescue dominate the rest of Port Hedland’s berths, and Rio Tinto has complete coverage of berths surrounding Karratha.

Salt companies with plans in the region closer to Red Hawk’s mine include Kerry Stokes’ BCI Minerals, and Leichhardt’s Eramurra project.

Red Hawk is progressing the 174 million tonne Blacksmith iron ore mine with a view to hauling its first ore in 2025.

Speaking at Informa’s Global Iron Ore and Steel Forecasts conference last week, Mr Michael said production could ramp up to 5mpta pending results of soon-to-be-released studies.

“The caveat being is we don't yet have an agreement in place with Pilbara Ports Authority to export five million tonnes though Utah point, but we are hopeful over the next 18 months we can get to an agreement,” he said.

“We are different with, let's call it a 200-million-tonne, 60 per cent resource, and if we can get our cost base down into the mid to low $US40s, we should be very resilient.

“I think we can offer something different to an existing port operator, or a future port developer in that we could underpin five to seven million tonnes for 20 years.”

Mr Michael said he expected the project to come in closer to $200 million due to inflation.

The miner’s major shareholder is private New Zealand industrials firm Todd Corporation which was behind a failed bid to build a new port and rail operation at Balla Balla, near Whim Creek.

Former attorney-general Cheryl Edwardes and former WA Nationals leader Brendon Grylls are tied to the company, Ms Edwardes as chairwoman and Mr Grylls as an advisor in the Pilbara.