24/08/2004 - 22:00

Iron ore tally hits $10b

24/08/2004 - 22:00

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THE potential investment in Western Australia’s iron ore industry could top $10 billion, with at least three aspiring producers seeking to break the domination of Rio Tinto and BHP Billiton Iron Ore.

Iron ore tally hits $10b

THE potential investment in Western Australia’s iron ore industry could top $10 billion, with at least three aspiring producers seeking to break the domination of Rio Tinto and BHP Billiton Iron Ore.

Andrew Forrest’s Fortescue Metals Group has attracted all of the headlines recently as it pursues plans for the $1.8 billion development of a new iron ore mine plus rail and port infrastructure at Port Hedland.

This week’s announcement of a rail construction and financing deal with Chinese company China Railway Engineering Corporation was the latest step in Mr Forrest’s progress.

Mr Forrest defied the odds to develop Anaconda Nickel’s Murrin Murrin nickel project, and could do the same thing in the Pilbara.

Another aspiring iron ore magnate is Brisbane-based Clive Palmer, chairman of unlisted company Austeel.

Mr Palmer is now back in Perth and focused on developing an integrated mining, processing and port project at Cape Preston, south of Karratha.

Gina Rinehart’s Hancock Prospecting is continuing to pursue the dream of her father, the late Lang Hancock, to develop its own iron ore mine. Hancock Prospecting has been working with South Africa’s Kumba Resources to try to kick-start the $1 billion Hope Downs project.

In the meantime, Rio Tinto and BHP Billiton have been roaring ahead with their own expansion plans.

About $1.6 billion is being invested in Rio Tinto’s mining, rail and port operations (see table, page 13) to lift the group’s production capacity to 170 million tonnes a year.

Rio Tinto is expected to pursue further expansion projects once its current work is completed.

Nearly $900 million was invested in BHP Billiton’s mining, rail and shipping operations last year and a further $160 million is currently being spent to lift output to 110mt annually.

Looking ahead, the company is conducting a feasibility study into spending $2.5 billion to lift production to 145mt.

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